## Barclays Tops Complaints for Small Business Account Closures
Barclays has become the most complained-about bank for small business account closures, according to a report by the Financial Ombudsman Service. Between April 2022 and September 2023, the ombudsman received 413 complaints regarding small business banking, with Barclays accounting for nearly half (205).
HSBC followed with 67 complaints, while Lloyds received 57, NatWest 53, and Santander 31. This data highlights the top five banks facing complaints about business account closures.
The report also emphasizes the significant impact of unexpected account closures on small businesses. Legal expert Jean-Martin Louw from Collyer Bristow notes that such closures can disrupt financial operations, hindering payment of invoices and staff salaries, and impeding access to necessary funds.
The Financial Ombudsman Service offers recourse to businesses with an annual turnover of less than £6.5 million facing difficulties with financial services firms. Of the 85 complaints made against Barclays between April 2023 and September 2023, 26% were upheld, compared to 9% of the 76 resolved cases in 2022-23.
Consumer rights expert Martyn James stresses the importance of monitoring banks to ensure fair treatment of customers, particularly in instances of account closures without explanation. The closure of customer accounts has attracted heightened scrutiny, exemplified by Nigel Farage’s account closure with Coutts last June.
Martin McTague from the Federation of Small Businesses highlights the devastating impact of such closures on small businesses, underscoring the power disparity between small firms and large banks.
While banks are not legally obligated to provide reasons for account closures, they must issue a two-month notice. The government is exploring measures to strengthen regulations, including mandating a 90-day notice period before closure and requiring explanations except in exceptional circumstances.
Barclays attributed most closures to the need for updated customer information to combat financial crime and comply with regulatory requirements. The bank reiterated efforts to minimize account closures and urged customers to maintain updated information. HSBC, Lloyds Bank, and Santander stated that account closures align with legal and regulatory obligations, while NatWest was unavailable for comment.