Bank account closures
Do you deal with customer complaints about bank account closures?
This page will give you an overview of the complaints we see and how we approach them.
On this page
Do you have a complaint about your bank account being closed?
Complaints we deal with
As a business offering banking, you have the right to close a customer’s account, just as your customer has. But it’s important:
- not to close an account because of bias or discrimination
- to treat your customer fairly, and
- give reasonable notice.
Your customers may complain if they feel you:
- made a factual or administrative mistake
- gave them the wrong information or advice
- were unfair or discriminated against them
- didn't follow your own rules and 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.
Rules on bank account closures
When we look at complaints about bank account closures, we use the regulatory and legal standards that applied at the time of the event the consumer is complaining about.
You’ll find rules, guidance and good practice on closing bank accounts in the:
- Financial Conduct Authority’s (FCA’s) Banking Conduct of Business Sourcebook (BCOBS)
- Payment Services Regulations
- Payment Accounts Regulations, and
- Standards of Lending Practice for guidance on situations where an account is overdrawn.
You may also find it useful to look at the FCA's 2024 update on UK payment accounts access and closures (pdf)
Notice periods for bank account closures
Banks should usually give at least two months' notice before closing an account. In special cases like suspected fraud or if the customer is or has been abusive, banks can give less notice.
Some business accounts have different rules. The notice period is usually in the account terms. Different rules apply for basic accounts – see Regulation 26 of the Payment Accounts Regulations 2015.
How we resolve complaints about account closures
We only look at complaints you've had an opportunity to look into first. If the consumer is unhappy with your decision, or you don't respond to them within the time limits, they can come to us. For complaints about:
- account closures, you have eight weeks to respond
- charges or notice, you have 15 days.
Each case is different, so what we require will vary. But we’ll look at the facts and evidence from both you and your customer. What we consider will usually include:
- the relevant laws, regulations and rules in place when the event happened, including guidance, standards and codes of practice, and the Consumer Duty
- a clear explanation of why an account was closed and any evidence that supports it, including how the account closure relates to statutory, regulatory and legal obligations – if relevant
- a copy of any internal policies relevant to the account closure
- what type of account was closed – for example, basic, current or savings – and, if it was a basic account, the term you have relied on to close it
- the terms and conditions on the account, including any specified notice period
- a copy of the ‘notice to close’ letter and details of how much notice you gave the customer
- customer contact notes
- account statements
- evidence to show whether the customer had access to the account during the notice period
- whether any funds have been held or released to the customer, including any benefits or salary payments.
We may ask for more documents or information, depending on the case. We’ll also look at what you’ve done to support your customer if:
- their account is overdrawn
- they’re in financial difficulty
We follow the FCA’s dispute resolution rules (DISP) and will take into account how you’ve tried to put things right.
If we uphold a consumer's complaint, we'll tell you what you need to do to put things right. We may also ask you to compensate them for any distress or inconvenience they’ve experienced as a result of the problem.
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If you didn’t give your customer enough notice before closing their account, you might have caused them financial loss.
They may have missed standing order or direct debit payments, or couldn’t honour a cheque, because of the closure. That might cause them to lose interest payments or have to pay late-payment fees.
If we believe you were wrong to close a customer’s account – or you didn’t give them enough notice – we’re likely to tell you to reimburse them for any financial loss. We may also direct you to do something else to put things right, such as reopening an account, if appropriate.
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Your customer may have suffered distress and inconvenience because they:
- couldn’t access banking facilities and had to find a new account
- couldn’t make or receive payments, which has affected their – or their business’s – reputation
- have negative information on their credit file as a result of the bank account closure or its consequences.
If these losses were foreseeable, we may expect you to pay your customer compensation.
Case study
An early bank account closure disrupts Huy and Chiyo’s business
Banking
Business Support Hub
Businesses and consumer advisers can contact our Business Support Hub on 020 7964 1400 for information on how we might look at a particular complaint, or for guidance on our rules and how we work.
We also work with businesses and other organisations to help prevent complaints.
