Bank entitled to close accounts over way personal account used

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Bank entitled to close accounts over way personal account used

Categories:

Closing accounts,

Summary:

Jasper's bank wrote to him in November 2021 asking for more information about transactions on his account, as well as about cash he was routinely withdrawing and depositing in the account. After reviewing this information, the bank wrote to him in January 2022 saying he appeared to be using the account for business purposes and asked him to ensure he operated it for personal use only. The bank warned it might exercise its right to close all his accounts if he continued to use his personal account for business purposes.

Published:

January 2024

Jasper said he spoke to branch staff about his practice of withdrawing and immediately depositing large amounts of cash, and that staff told him he could continue to do this. In October 2022, the bank wrote to Jasper giving him 14 days’ notice of its decision to close his accounts. Jasper complained the decision was based on incorrect information and at odds with assurances from branch staff.

Our investigation

We told Jasper a bank could end its relationship with a customer at any time, just as a customer could move to another bank at any time. A bank is, however, obliged to act fairly and communicate its decision in a fair and reasonable manner. It was clear the bank had real concerns about the way Jasper operated his account, and made the decision to close his accounts on this basis. The bank gave Jasper adequate notice of its intention to close his accounts.