Customer given sufficient time and explanation before accounts closed

Categories:

Bank accounts, Closing/Freezing accounts,

Summary:

In August 2025, the bank reviewed Ethan’s accounts as part of its obligations under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. It asked Ethan for information about the purpose of his accounts, his source of income, and specific transactions. Ethan gave some explanations but did not supply the requested documentation. On 14 October, the bank notified him it would close his accounts on 13 November because it could not complete its review. Ethan complained that he had acted in good faith, responded promptly, and sought to resolve the matter. He said the bank acted unfairly, did not provide a clear justification for its action, and its decision was premature and disproportionate. He said the bank’s actions had harmed his finances and reputation.

Published:

March 2026

Our investigation

The bank had asked Ethan for information to verify the source of his money and to clarify various transactions, including 69 cash deposits totalling more than $20,000 and 128 credits totalling more than $30,000, between January 2024 and September 2025. It told him what evidence would be accepted, such as tax returns or messages confirming financial arrangements. Ethan replied that he received money for items he had bought for others, and loans from family members and friends. However, he did not provide evidence to support this explanation. Instead, he questioned the bank’s authority to request the information.

The bank had extended deadlines for him to supply the evidence it requested. It had also explained its anti-money laundering obligations and the consequences of not providing the evidence. When Ethan failed to supply this evidence, the bank gave him 30 days’ notice of its intention to close his accounts. It also explained the reason for taking this step.

We found the bank clearly explained what information it needed and why, and also that it gave Ethan reasonable time to respond. Its actions complied with its legal obligations under the Act, and were consistent with its terms and conditions. We also found the bank gave the required notice before closing the accounts.