Barclays closed this customer’s accounts and will not tell him why.Herman Potgieter, with his girlfriend Marianne Brennan, is mystified by Barclays’ decision: ‘I just want to know what it is I did wrong’.
When Herman Potgieter checked his bank balance one morning, he was horrified to discover that every penny in his Barclays current account — about £1,700 — had gone. A note on the account simply said: “Payment: to reconcile.”
A frantic phone call to the bank shed little light on what had happened; he was simply told it was “a back-office decision”. Seven days later, the funds were mysteriously recredited to his account — again without explanation.
Unfortunately, that was not the end of it, as Potgieter fell victim to the bank’s right to “close any account” without giving an explanation.
A few weeks later, he received a letter from Barclays stating: “We regret to inform you that, following a review of your account(s) with us and after careful consideration, we are unable to continue to act as your bankers.”
Potgieter, 29, a South African who has lived and worked in the UK for the past 11 years — and banked with Barclays throughout — was confused and angry.
The decision applied to all three accounts he held with Barclays — a current and savings account and cash Isa, with a total balance of about £25,000 — as well as his Barclaycard. Potgieter, a project engineer for London Underground, said: “I am happy to accept the decision but I just want to know what it is I did wrong, so I can make sure I don’t do it again. This has really annoyed me.” He has since switched to HSBC.
When Money asked Barclays why the accounts had been shut down, the bank remained tight-lipped. It said: “Due to customer confidentiality, we do not discuss individual customer accounts.
“Barclays has the right to close any account and such decisions are made after much consideration and are not taken lightly.”
Breaking terms and conditions
There are reasons a bank might decide to close your account. In the case of Barclays, it can do so without explanation if a customer does any of the following:
• Behaves in a threatening or abusive manner to staff
• Places the bank in a position where it might break a law, regulation, code or other duty
• Gives the bank false information
• Uses or allows another person to use the bank illegally or for criminal activity (including receiving proceeds of crime)
• Lets someone else use the account inappropriately
Potgieter never behaved in a threatening or abusive way, Barclays said, but it refused to provide any further explanation. He remains mystified.
After he showed us his bank statements, Money saw nothing to suggest he had committed any of the other offences listed above, either.
Yet the term “to reconcile” suggests Barclays was looking at payments into and out of his account. The British Bankers’ Association (BBA) said that if a bank is concerned about the source or destination of any payments it will try to “reconcile” them to work out what they are for. If an investigation is not conclusive, the bank is not allowed to reveal details about why it was concerned. This does not mean a customer is guilty of wrongdoing.
‘Politically exposed’ persons
Another reason a bank might sever relations with a customer is if they are considered a “politically exposed” person — an ambassador or army officer, say, or an MP or judge. Strict new legislation has placed a much greater onus on companies and financial organisations to prevent illegal acts by their customers or staff. This has led to some deeming certain customers too risky to do business with, although many object to being labelled as such.
The BBA does not keep records of the number of people who lose banking services due to being classified as politically exposed. However, the Financial Ombudsman Service said complaints from customers about accounts being closed without explanation have risen in the past year.
That banks are not obliged to give a reason for severing a relationship with a customer can be frustrating. If you feel a bank has acted outside its own rules in shutting your account, or if you have not been given adequate time to make alternative arrangements, or if you have incurred costs as a result of the error, you have the right to make a complaint.
What the banks say
None of the big five banks — Barclays, Lloyds, HSBC, Royal Bank of Scotland and Santander — approached by Money last week was willing to share data about the number of customers losing their banking services, blaming the “commercially sensitive” nature of such information.
‘Suspicious activity reports’ on the increase
A record number of “suspicious activity reports” (SARs) have been submitted to the police by banks and other financial institutions in order to tackle fraud, money laundering and the financing of terrorism, exclusive figures obtained by Money reveal, writes Ali Hussain.
Between October 2015 and September 2016, the National Crime Agency (NCA) received 420,000 SARs, about 90% of which were submitted by banks and building societies. Financial institutions are legally obliged to report suspicious activity to the police under the Proceeds of Crime Act 2002.
A bank cannot inform a customer that it has made a SAR submission, or provide a reason for why an account has been suspended or closed, as this may constitute a “tipping off” offence.
A bank can choose to close an account even if it gets the all-clear from the police. The bank is not obliged to provide a reason.
In its guidance, the NCA says organisations should consider how the relationship with a customer will be handled once an SAR has been submitted.