## Barclays Tops Complaints for Small Business Account Closures
Barclays has come under fire for its high rate of small business account closures, attracting nearly half of all complaints lodged with the Financial Ombudsman Service (FOS) between April 2022 and September 2023. This concerning trend has raised questions about the bank's treatment of small businesses and the potential impact of such closures on their operations.
The FOS data reveals that Barclays received 205 complaints related to small business account closures, significantly exceeding its competitors. HSBC followed with 67 complaints, while Lloyds, NatWest, and Santander received 57, 53, and 31 complaints respectively.
Experts warn that unexpected account closures can have severe consequences for small businesses, disrupting financial operations, hindering payments, and impeding access to crucial funds. Jean-Martin Louw from Collyer Bristow emphasizes the significant repercussions of such closures, highlighting their potential to cripple business operations.
The FOS serves as a vital resource for businesses facing difficulties with financial services firms. It offers recourse to businesses with an annual turnover below £6.5 million, upholding 26% of the 85 complaints against Barclays between April 2023 and September 2023. This figure stands in stark contrast to the 9% upheld rate for the previous year, raising concerns about the bank's practices.
Consumer rights expert Martyn James stresses the importance of monitoring banks to ensure fair treatment of customers, particularly in cases of unexplained account closures. The recent closure of Nigel Farage's account with Coutts has further amplified scrutiny surrounding this issue. Martin McTague from the Federation of Small Businesses underscores the devastating impact of such closures on small businesses, highlighting the power imbalance between small firms and large banks.
While banks are not legally obligated to provide reasons for account closures, they are required to issue a two-month notice. The government is currently exploring measures to strengthen regulations, including extending the notice period to 90 days and mandating explanations for closures except in exceptional circumstances.
Barclays attributes most closures to the need for updated customer information to combat financial crime and comply with regulatory requirements. The bank emphasizes its efforts to minimize closures and urges customers to maintain updated information. HSBC, Lloyds Bank, and Santander have also stated that their account closures align with legal and regulatory obligations. NatWest was unavailable for comment.
The high volume of complaints against Barclays and the potential consequences for small businesses necessitate further investigation and potential regulatory intervention. Ensuring fair and transparent treatment of small businesses by financial institutions is crucial for their survival and growth.