Debanking scandal explodes with surge in complaints of people losing account access

Watchdogs have seen an explosion in complaints about ‘debanking’ after Nigel Farage turned a spotlight on the scandal.

The total number of complaints about unfair bank account closures rose 44 per cent in the past year.

This includes an 81 percent year-on-year surge in the volume of complaints made by businesses.

Separately, the number of official complaints where people were refused a bank account because they are a ‘politically exposed person’ was also up sharply.

Nigel Farage triggered a major inquiry last year after he accused Coutts, part of NatWest, of effectively taking his bank account away.

Mr Farage suggested the banking giant had made the decision because they did not agree with his political stance on Brexit and other issues.

This has been denied by the bank, however the revelations saw thousands of others to come forward to say they had also been denied bank accounts.

Mr Farage revealed in June last year that Coutts had told him they no longer wanted him as a customer.

He subsequently obtained a report from the bank which indicated his political views were considered as a factor in his account closure.

The resulting row led to the resignation of two bank bosses – the boss of Coutts, Peter Flavel, and chief executive of the NatWest group, Dame Alison Rose.

Dame Alison left after admitting making a "serious error of judgment" in speaking to a BBC journalist about Mr Farage's account.

Subsequently, he launched a website to stand up for people who have been denied bank accounts after the row over his Coutts account closure.

He said on social media he will "fight back against the big banks who have let us down", calling it a "scandal".

Documents published by the House of Commons Treasury Select Committee today (Sunday) reveal that complaints about debanking reached 3,858 in 2023-24 – up 44 percent on the year before.

The complaints about business account closures was up 81 percent from 367 to 666.

These figures, which relate to the number of complaints that reached the Financial Ombudsman Service (FOS), will be just the tip of the iceberg.

Separate to the ombudsman figures, MPs on the Treasury Committee revealed in February that more than 140,000 business accounts had been closed in recent years by major banks.

The latest FOS figures are revealed in a letter sent to the Treasury Committee by the chief ombudsman, Abby Thomas.

The documents also identify a massive increase in complaints about customers being refused a bank account because they are deemed a "politically exposed person".

These fall under the heading "restricted account closures" and also include accounts where there are concerns about financial crime and money laundering or a politically exposed person.

The figures show there 111 complaints about account closures under this heading in 2020-21 rising to 448 in 2022-23 and 556 in 2023-24.

Data included in the correspondence also reveals an increase in the proportion of complaints which were upheld against the banks on behalf of wronged customers.

It ruled in favour of the complainant in 36 percent of complaints in 2023-24, which compares to 27 percent or below in each of the previous three years.

Chair of the Treasury Committee, Dame Harriett Baldwin, said there is clear evidence that businesses and individuals are having their bank accounts taken away unfairly.

She said: "When we set out on our inquiry into financing for small and medium-sized businesses, we weren’t necessarily expecting de-banking to emerge as a key issue.

"But as they say, you must go where the evidence takes you - and it’s clear there is evidence that some legally operating businesses are being unfairly de-banked.

"Banks should be doing all they can to support small business in this country, not pulling the rug out from beneath them with little warning.”

If you have been a victim of debanking please get in touch with me at rory.poulter@reachplc.com