There has been a surge in the number of debanking complaints that are unrelated to suspected fraud or money laundering, according to figures from a watchdog.
Abby Thomas, chief ombudsman of the Financial Ombudsman Service (FOS), said in a letter to Treasury Committee Chair Harriett Baldwin that the service received a total of 1,613 new complaints about account closures in less than six months between April 1 and Sept. 27.
It’s almost 60 percent of the number of complaints received in the last entire financial year, which stood at 2,708.
The figure has increased consistently over the past three years, driven by more “restricted” cases, or cases where there are “financial crime concerns, money laundering concerns, or where the complaint involves a politically exposed person,” Ms. Thomas said.
The chief ombudsman said the trend suggests “banks might have been closing more accounts due to financial crime” over the past few years.
However, the surge this year was solely driven by “general” cases, which do not involve sensitive information as “restricted” cases do.
From April 1 to Sept. 27, the FOS opened 1,351 new general debanking cases, compared to 2,083 cases in the year 2022/23.
That’s 7.5 complaints a day on average, almost a third up from last year, analysis by The Epoch Times shows.
Ms. Thomas said the apparent increase suggests “banks might have been closing more accounts for reasons such as account inactivity, their own commercial reasons (e.g. exiting parts of the market), or due to incomplete information from customers in response to standard processes (e.g. Know Your Customer checks).”
In a statement to The Epoch Times, a spokesperson for the FOS said: “Account closures should always be carried out in line with the bank’s terms and conditions. If consumers are concerned that they haven’t been treated fairly, they should contact the Financial Ombudsman Service and we'll see if we can help. We are a free, independent service set up to resolve financial disputes informally and fairly. Each case is investigated on its own merits.”
Meanwhile, NatWest has scrapped about £7.6 million in potential payouts to former boss Dame Alison Rose amid the debanking saga between the bank, its subsidiary Coutts, and former Brexit Party leader Nigel Farage.
Coutts, a high-end private bank, dropped Mr. Farage earlier this year without specifying the reasons for doing so at the time.
Dame Alison stepped down in July after a conversation between her and the BBC’s Business Editor Simon Jack led to an inaccurate BBC story about why Coutts had closed Mr. Farage’s accounts.
The former CEO said she didn’t reveal any personal financial information about Mr. Farage but made a “serious error of judgment” when she confirmed Mr. Farage was a Coutts customer, which she thought was public knowledge, and left the impression that the decision to close Mr. Farage’s accounts was “solely a commercial one.”
NatWest on Friday said Dame Alison has not been considered a “good leaver” following her departure and will therefore not receive most of the discretionary parts of her pay package.
The former boss will nevertheless get £2.4 million for 12 months’ worth of pay and benefits plus around £800,000 for former bonus shares due to vest in March next year.
She could have been eligible for a further £4.7 million worth of shares and almost £2.9 million in variable pay awards.
NatWest stressed that there was “no finding of misconduct” against the former boss.
Dame Alison said that she had accepted the decision of the NatWest board, and said she was “pleased” that the bank had cleared her of misconduct.
“I am pleased that NatWest Group has confirmed that no findings of misconduct have been made against me,” she said.
“I can also confirm acceptance of the terms of the settlement agreement, which is in line with NatWest Group’s remuneration policy, bringing the matter to a close.”
Mr. Farage hailed the bank’s decision as being “correct,” saying it’s “right for the taxpayers and nobody should be rewarded for failure,” in a video published on X, formerly known as Twitter.
NatWest is partly owned by taxpayers as a result of an emergency bailout in 2008.
