The likelihood of your bank account being closed without any warning is generally low. However, the rate of account closures is rising. Your bank account might be closed without notice if the bank suspects fraudulent activities, if you repeatedly overdraw your account, or if you don’t use the account for a long time.
It’s becoming increasingly common for banks to block accounts without notice. In fact, according to a report by The Guardian, UK bank accounts are closing more than 1,000 accounts every single working day.
There are a number of reasons why a bank might block your bank account, including:
- Suspected fraudulent activities
- Significant breach of account terms and conditions
- Consistent overdrafts beyond agreed limits
- Prolonged inactivity in the account
- Negative impact on the bank’s reputation
Let’s take a closer look at each of these reasons, the best action you can take to protect yourself, and which provider you should consider switching to.
But before that, if you’re worried that your bank account may be closed without notice then consider switching to a Suits Me Premium Account. We will never close your account without warning and our unrivalled customer service team will always work with you to find the right solution.
1. Suspected Fraudulent Activities
Banks can and often do block accounts when payments are made into your account or out of your account that is different to your ‘normal’ transactions. This can trigger an alert to the bank to block your account until the payment is checked and verified it is legitimate. Many of these ‘triggers’ are automated by the internal monitoring banking systems which will automatically block an account if a rule is triggered.
2. Significant breach of account terms and conditions
Banks put several policies in place to protect themselves and their customers. A significant breach of account terms and conditions refers to actions by the account holder that go against the rules set by the bank.
For example, if someone uses their personal account for business purposes when it’s specifically meant for personal use only, this could be considered a breach.
Another example is not maintaining the minimum required balance if this is a stipulated condition of the account.
And of course any illegal activity relating to your bank account is going to breach any terms and conditions laid out by your banking provider.
3. Consistent Overdrafts Beyond Agreed Limits
Most banks charge overdraft fees if you regularly spend more money than you have in your account. If you rack up too many fees, the bank could block your account to avoid further losses.
4. Prolonged Inactivity In The Account
Prolonged inactivity in an account can lead a bank to close it without notice. Banks often consider inactive or dormant accounts as a risk or an administrative burden. If there are no transactions over a significant period, the bank might close the account to streamline its operations. It’s advisable to make occasional transactions to keep an account active and avoid closure due to inactivity.
5. Negative Impact On The Bank’s Reputation
If an account holder’s actions negatively impact the bank’s reputation, the bank might close their account without notice. This can happen if the account holder is involved in activities that attract negative media attention or public criticism, potentially harming the bank’s image.
In a notable instance, Nigel Farage, a British broadcaster and former politician, faced such a situation when Coutts, a prestigious private bank, closed his account in June 2023. Initially, NatWest, the owner of Coutts, cited Farage’s failure to meet their eligibility criteria, specifically not holding £1,000,000 or more in his account, as the reason for the closure.
However, the story took a dramatic turn when Farage revealed documents obtained through a subject access request. These documents indicated that the closure was not due to financial reasons but rather because his views and values did not align with those of the bank. Coutts internally described Farage as ‘at best seen as xenophobic and pandering to racists,’ a stance that they deemed incompatible with their values. This revelation led to significant media attention and the eventual resignation of NatWest’s CEO, Dame Alison Rose, as reported by Wikipedia.
Farage’s struggle to find banking facilities continued as he was reportedly refused personal and business accounts by seven other UK banks. The entire episode sparked a review by the Financial Conduct Authority, with initial findings suggesting no evidence of his accounts being closed due to political beliefs, as detailed in The Independent.
The controversy surrounding Farage’s account closure underscores the complex interplay between an individual’s public persona and a financial institution’s concern for its reputation.
What To Do If You’re Worried About Your Bank Account Being Closed
For peace of mind over your accounts, join Suits Me. Suits Me is an online solution that takes compliance seriously, doesn’t close your account without warning and offers excellent customer service.
There are several reasons to open a Suits Me® account. First and foremost, it is a legal requirement to have an account with a provider that monitors and reports suspicious activity. Suits Me® takes this obligation seriously and will work with you to flag any unusual activity in your account.
Secondly, Suits Me® offers a more personal touch than some larger, high-street banks. For example, if you notify them of unusual payments, they won’t simply block your account – they’ll work with you to understand the situation and ensure everything is above board.
Finally, Suits Me® understands that pattern monitoring can be intrusive and disruptive, so they take care to only contact you if they identify highly suspicious patterns. In other words, they won’t close your account on a whim; they value their customers and want to keep you as a long-term user.
As discussed, there are multiple occasions where a bank may need to close your account. If you’re worried about this, you can switch to an online-only bank like Suit Me. With Suit Me, you’ll enjoy greater flexibility, convenience, and competitive interest rates on savings products. So if you’re looking for a new bank that won’t close your account without notice, check out Suits Me® today!