Bank must follow process before closing an account

Closing accounts,
Sonya’s accounts were closed because of her conduct towards staff over an international funds transfer. Sonya considered the bank had given her wrong or inadequate information about the transfer and wanted it to retrieve the funds immediately. Sonya was frustrated when she asked the bank for information and did not get the correct answer. When she received no satisfaction at her local branch, she went to another branch, which fixed the problem. Four days later, the bank sent her a letter saying it was closing her accounts because of her “abusive and threatening” conduct.
March 2019

Our investigation

Sonya said staff at her local branch had been rude and refused to help her. The staff there said she had been extremely rude and aggressive. In fact, they said, the bank had been on the point of calling the police due to the conduct of Sonya and her support person.

Sonya was very upset with this characterisation of her conduct. She considered the bank had been at fault in giving her incorrect or insufficient information in the first place and in declining to assist her when she raised the problem with it. 

She also learned that the bank had not looked at CCTV footage of the interaction before closing her accounts, suggesting the bank had unquestioningly accepted staff members’ version of events.

In this case there was a significant conflict of evidence.  Sonya was adamant she had not acted inappropriately, while the staff were equally adamant that she had. 

We carefully reviewed Sonya’s account, the CCTV footage and the staff members’ accounts. While the parties’ recollections of the content of the conversations were similar, the perceptions of manner, tone, language used, and volume were conflicting. Unfortunately there was no sound with the CCTV footage so we could not make a finding about the reasonableness of conduct but we could see that the discussion was animated.  

Regardless of conduct on the day, we considered the bank had failed to follow an appropriate process in closing her account because it had not properly considered the points Sonya raised in response to the closure. 

A decision to exit a customer on conduct grounds should be handled with care. The Code of Banking Practice requires banks to act fairly, reasonably and in good faith. We consider this means the bank should, when considering closing a customer’s account:

  • ensure the assessment is made by someone independent, who has not been directly involved in interactions with the customer
  • examine all available information, including, if possible, CCTV footage
  • keep an open mind to the possibility that staff may have acted inappropriately
  • consider whether another course of action besides closure would suit everyone’s interests, such as a warning to the customer or offering remote banking services only

Although we were not sure the bank would have kept her accounts open if it had considered the points Sonya made, we were satisfied she had suffered inconvenience and recommended $250 and an apology. The bank accepted our view, but Sonya did not. She said she had suffered considerable inconvenience and more compensation was warranted. We acknowledged the whole episode had caused her considerable stress, but we could consider compensation only in respect of that aspect of the case where we found the bank had failed. 


Sonya accepted our view, and the case was settled on the basis of the bank apology and payment of $250. Sonya moved her accounts to another bank.


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