Bank account closures

Customers may complain that you’ve closed their bank account unfairly. This might be because you:

• made a factual or administrative mistake
• gave them conflicting information or advice
• discriminated against them
• didn’t follow your own procedures properly
• didn’t give them enough notice

You don’t have to explain to a customer why you’ve closed their account, but it can be helpful to do so.

We’ll look at:

• what’s fair and reasonable
• any relevant rules, guidance and good practice, including:
  • the Banking Conduct of Business Sourcebook (BCOBS) in the Financial Conduct Authority Handbook
  • the Standards of Lending Practice, where an account is overdrawn
• what you’ve done to support your customer if:
  • their account is overdrawn
  • they’re in financial difficulty
• the account’s terms and any specified notice period
• the type of account

Notice periods for personal bank accounts

If you intend to close a personal bank account, you should usually give your customer reasonable notice so they can make alternative arrangements. We’d usually expect you to give them at least 30 days’ notice.

We’d only expect you to give a customer less than 30 days’ notice in exceptional circumstances. This might be where:

• you suspect them of fraud
• they were threatening or abusive to your staff

We’ll check whether the terms of the customer’s account specify a notice period and what the terms say about the circumstances in which you can close an account. If an account’s notice period is less than 30 days, we’d still usually expect you to have allowed the customer at least 30 days’ notice before closing the account.

Notice periods for business bank accounts

A longer period than 30 days might be appropriate for business customers. They’re likely to need more time than personal customers to make alternative arrangements, particularly if there’s an agreed overdraft on the account.

Notice periods for basic bank accounts

Different rules apply about when you can close a basic bank account and how much notice you should give a customer. See regulation 26 of the Payment Accounts Regulations 2015.

When you’re looking at a complaint about the unfair closure of a bank account, think about your overall treatment of the customer. Take an objective view of what caused you to close their account, and consider whether that decision was reasonable.  

You should give your final response to complaints about payment services within 15 days. Find out more about time limits for businesses.

We only look at complaints that you’ve had a chance to look at first. If a customer complains and you don’t respond within the time limits or they disagree with your response, then they can come to us.

Find out more about how to resolve a complaint.