Question to the HM Treasury:

To ask the Chancellor of the Exchequer, on what basis are banks permitted to close customers’ bank accounts.

In most circumstances, the provision of a bank’s services is a commercial decision for the bank and the Government does not intervene in these decisions. The terms and conditions of the contract between the two parties govern the termination of that contract, and although the Treasury sets the legal framework for the regulation of financial services it does not have investigative or prosecuting powers of its own and is not able to intervene in account closures.

HM Treasury sometimes receives representations from consumers with questions or concerns about their banking. However, any dispute arising between a bank and its customers is usually best resolved by the parties involved. The Financial Conduct Authority (FCA) rules require the banks to properly investigate all complaints and, through ongoing supervision, it continues to monitor the banks’ complaint handling processes. If customers are unable to resolve the issue with their bank, they will be eligible for further review by the Financial Ombudsman Service (FOS). The FOS provides a free, independent dispute resolution service for bank customers.

Customers who are experiencing financial difficulty following a bank account closure may wish to contact the Money and Pensions Service (MaPS), an arms-length body of the Department for Work and Pensions. MaPS was established to support consumers with comprehensive, consistent, guidance for every stage of their financial lives. It offers free and impartial information on money matters, available to all online, face-to-face or via telephone. This includes an impartial Debt Advice Locator Tool for those needing debt advice immediately.