FCA responds to Treasury on frozen bank accounts

Nikhil Rathi has responded to Rt. Hon. Mel Stride MP’s questions following press reports that NatWest might have frozen the accounts of some customers on low incomes without good reason. Highlights of the FCA’s response include:

• the FCA is not aware of a substantive cross-sector issue of banks freezing accounts for no reason;
• if a firm considers that it is necessary to freeze an account, the FCA expects any investigation to be carried out in a reasonable time and for customers not to be denied access to their money unnecessarily;
• banks should, where possible, communicate with customers, acknowledging that they may need to take care to avoid alerting individuals in a manner that could undermine further action taken in the future (under POCA 2002);
• where a bank has decided to withdraw banking services, the FCA encourages banks to communicate any exit decision with the customer, where possible, including setting out their reasoning clearly; and
• if a customer believes their account has been frozen unreasonably, they can refer the matter to the FOS.