NatWest shut my son's
accounts, but refuses to give
him any reason
By TONY HETHERINGTON
PUBLISHED: 22:04, 1 September 2012 | UPDATED: 22:04, 1 September 2012
Mrs C.M. writes: My son has received a letter
from NatWest saying: ‘After reviewing the
accounts that we offer you, we have decided
that we will no longer provide you with banking
We are astounded that the bank can close
accounts without giving a clue as to how it has
come to its decision. On the date the letter was
written, my son had £8,000 in his accounts.
He has a permanent job and has never been
NatWest's letter is blunt. It tells your son to find
a new bank because in 60 days it will close his
accounts, cancel his cards and stop his direct
debits and standing orders.
Why has NatWest done this? It says: ‘We can’t
provide you with any further information on our
decision and we will not provide a banking reference for you.’
This last part is the killer punch. How can your son ask another
bank to take him on, when his existing bank refuses a reference?
Can he really tell Lloyds, Barclays, HSBC and the rest that he
wants an account but he cannot explain why NatWest has dumped
In principle, NatWest says it can close an account if the customer
has given false information, used the account illegally, threatened
staff, or was never entitled to an account in the first place.
The only part of these rules you think might apply is that you feel
your son might be suspected of money laundering. He opened
several savings accounts for different purposes. But NatWest has
told me: ‘This alone is not why his accounts were closed.’
Perhaps, then, this is part of the reason. If a bank suspects a
customer of money laundering, it cannot legally say so. This is
called ‘tipping off’ and it is an offence. On the other hand, if money
laundering suspicions were not behind the bank’s decision, there is
nothing to stop it revealing its reasons.
I do wonder whether NatWest has filed information about your son
with Cifas, the fraud prevention service. If so, he is entitled to pay
£10 for a copy of any information held. He can start the ball rolling
via the website at cifas.org.uk.
He can also appeal to the Financial Ombudsman, though this may
not help. Legally, businesses are not obliged to deal with any
customer as long as they do not base their decision on unlawful
The issue of account closures is a problem that has attracted the
attention of the Consumer Panel, which advises the Financial
Services Authority watchdog.
Panel chairman Adam Phillips told me: ‘It is very worrying that
banks can close accounts and effectively blacklist consumers
without giving any reasons. Banks should not be allowed to ignore
the principle of natural justice that enables those accused of
wrongdoing to be informed of the case against them and have the
right to a fair hearing.
‘These apparently unaccountable institutions are acting as judge,
jury and executioner. There appears to be no way to appeal their
A few years ago the FSA ordered the financial sector to make sure
it was treating customers fairly. NatWest’s decision may be legal,
but it is certainly not fair.
Time for the FSA to take action.
I told Barclays I was on a cruise, but my card
was rejected by a cash machine in Malaysia
K.J. writes: I gave Barclays the itinerary of a cruise we were taking
and explained that I would be using my debit card to draw money
at cash machines in Dubai, India, Malaysia and Singapore.
I was told the appropriate marker had been placed on my account.
However, a cash machine in Malaysia rejected my card and it
never worked again.
Luckily I had a Capital One credit card. I had also notified Capital
One in advance and this card worked perfectly.
When you returned home, you found a message asking you to
contact the bank’s fraud department.
You have told me that Barclays explained that after a card is used
in two different countries, it blocks further use until the cardholder
Barclays has given me a different explanation though. It says there
is no automatic block on debit cards after they are used in two
There was another reason why your attempt to draw cash in
Malaysia looked suspicious, and if you contact the bank again, it
will go into details.
The weak link in the chain of events is that you do not seem to
have been told that Barclays has a 24-hour phone number that
accepts reverse charge calls from anywhere in the world. A call
confirming your identity would have seen your card speedily
Any cardholder about to go on a similar cruise would do well to
demand the number or risk being left without cash.
Blunder over transferred Isa was a joint effort
Mrs A.W. writes: As my Halifax Isa neared maturity, I decided to
move it to Santander, which seemed a better investment.
Santander told me to do the paperwork in advance, so the Isa
would be transferred once it matured. I specifically stated that
nothing was to be done until then.
To my horror, I found the transfer went through immediately and I
have been penalised for closing my Halifax Isa early.
Both Halifax and Santander accept a share of the responsibility.
When you complained to Halifax, you were told the instruction from
Santander was clear, and that Halifax had slipped up and would
give you £25 to make up for the stress and inconvenience.
Confusingly though, Halifax has since told both of us that
Santander requested the transfer immediately, leaving you to bear
the early withdrawal penalty.
Santander has told me: ‘Unfortunately, there was an error on the
Isa transfer form which meant that Halifax actioned the transfer
immediately, rather than after maturity.’
Santander has now sent you a written apology. It is repaying the
£84 penalty you suffered, and adding a further £50 as a gesture of
Disabled man told benefit is tax-free still gets
A. B. writes: I am representing my brother-in-law, who in his own
words is ‘too thick’ to understand all the information sent by
Revenue & Customs.
In December last year he received a tax demand for nearly £3,000.
This arose because the Department for Work and Pensions gave
him incorrect advice, and now neither the Revenue nor the DWP
will accept responsibility.
The Revenue says he should have known his tax was wrong.
Your brother-in-law is disabled and has a letter from an official in
the Department for Work and Pensions advising him: ‘I can confirm
you are in receipt of non-taxable Incapacity Benefit.’
Despite this, he received a demand from the Revenue for £2,762,
said to be tax owed since 2008. His benefit income was taxable
after all, the Revenue insisted. The DWP then changed its mind
and agreed with the taxman. It offered an apology, but that was all.
You helped your brother-in-law to lodge an appeal, asking the
Revenue to scrap the tax under the extra statutory concession that
allows this when there has been some official error.
However, the tax inspector ruled that your brother-in-law should
have realised he was not paying enough tax, even though he had
been told his benefit income was not taxable.
I took this up with officials at the Revenue’s head office and it has
emerged that the Revenue has known about the benefit income
since at least 2003, but has failed to tax it.
In short, your brother-in-law declared the income, the taxman
ignored it, the DWP wrongly said it was tax-free, yet your brother-
in-law has been told he should have known better than both lots of
professionals and he must foot the bill.
Or at least, that was the situation. The Revenue has now told me it
will cancel the tax and write off the £2,762. A spokesman admitted:
‘We failed to make use of information provided to us about
incapacity benefit and he had a reasonable expectation that his tax
affairs were in order.’
If you believe you are the victim of financial wrongdoing, write
to Tony Hetherington at Financial Mail, 2 Derry Street, London
W8 5TS. Because of the high volume of enquiries, personal
replies cannot be given. Please send only copies of original
documents, which we regret cannot be returned.