Account Closure

Compensation for distress and inconvenience should reflect the actual impact on the individual, measured from when they became aware of the error rather than the full duration of the administrative failure.

A bank is liable for losses directly caused by its error in closing an account, but not for losses that the consumer could reasonably have mitigated through their own actions.

A bank may close a credit card account in accordance with its terms and conditions, but must provide customers with clear and correct information about the closure and any potential reconsideration.

An insurer must handle claims promptly and fairly with appropriate progress updates, even when liability is disputed and recorded as open/fault.

A business that incorrectly closes an account should compensate the customer for distress, inconvenience, and loss of access to funds through simple interest, rather than reimbursing ancillary borrowing costs.

A creditor must take reasonable steps to contact a borrower and give them an opportunity to remedy missed payments before applying a default to their credit file.

Complaint handling is not a regulated activity and therefore falls outside the Financial Ombudsman Service's jurisdiction; only regulated activities can be considered.

A firm must handle complaints substantively within the FCA's eight-week timeframe and must not unreasonably restrict access to funds or income without clear explanation.

A firm must not unfairly threaten account closure, and compensation for distress should be distinguished from compensation for alleged financial losses that were adequately mitigated by the firm's subsequent remedial offer.

A lender can fairly decide its credit criteria and refuse accounts for people in insolvency, but must handle account closure and credit reporting fairly and transparently.

A borrower remains obligated to repay a loan despite a lender's poor communication about account closure, and the borrower must take reasonable steps to mitigate the situation.

A firm may restrict or suspend trading on an account when a customer fails to provide information required to fulfil regulatory obligations, particularly where the customer has expressly agreed to such restrictions in the account agreement.

A firm must make appropriate arrangements to enable a banking customer to trace and access deposits held or formerly held, but this is limited by what is reasonably possible given the age of historical records.

A bank may close an account and report details to SIRA if the customer uses the account to handle third-party funds without prior agreement, particularly where suspicious activity is evident.

A bank is not required to prevent closure of a credit card account with an outstanding balance, and must report accurate payment history to credit reference agencies if the customer fails to pay.

A payment service provider is expected to process authorised payments but may be liable if it fails to act on information that should reasonably alert it to potential fraud.

Banks have broad legal and regulatory obligations to protect against financial crime and sanctions breaches, and may block or close accounts where concerns arise, even for existing customers.

A bank has the commercial right to close accounts and set criteria for who it offers accounts to, provided it gives appropriate contractual notice.

Financial institutions have broad commercial discretion to decide where and how they operate, which is not subject to FOS intervention.

A financial institution is not required to retain indefinite records, and the absence of records does not support a conclusion that funds remain held.

Banks must follow FCA guidance on branch closures and provide adequate alternative banking arrangements, but are not required to notify all customers of closures if transaction history does not meet notification criteria.

Banks have legal and regulatory obligations to monitor accounts for financial harm risks and may close accounts in accordance with their terms, provided they follow procedural requirements for notice.

Banks are entitled to set their own account policies and security requirements, and customers should review terms and conditions before opening accounts.

A bank must provide service within a reasonable timeframe, with reasonable waiting times acceptable when customers are queuing in branch.

A bank is not liable for authorised payments unless it can be demonstrated that the customer was the victim of an APP scam involving dishonest deception, rather than a civil dispute over a legitimate business arrangement.

Banks are entitled to conduct periodic due diligence reviews and place account restrictions when customers fail to respond to information requests, provided they make reasonable contact attempts beforehand.

A firm's restriction of an account to closing positions only does not constitute unfair treatment if the consumer can still execute closures through the required method, even if it requires additional steps.

Banks have a regulatory right to review and close accounts to meet their legal and regulatory obligations, and they are not required to disclose specific reasons for closure decisions.

Banks have broad commercial discretion to close accounts and monitor for financial crime, provided closure is in line with account terms.

Promotional terms and conditions must be met as stated; fairness does not require waiving clear eligibility criteria based on individual circumstances.

A credit agreement can include terms allowing variation with reasonable notice and requiring continuous payment authority, provided consumers have the right to refuse and end the agreement.

A lender acts fairly when they communicate arrears and default notices using contact details they hold for the consumer and follow industry expectations regarding default registration timelines.

Banks are entitled to conduct Safeguard reviews and suspend accounts for non-compliance with information requests in accordance with regulatory obligations and terms and conditions.