The Financial Conduct Authority (FCA) has taken a significant step in investigating account closures by sending an information request to major banks and building societies. The purpose of this move is to gain a comprehensive understanding of the frequency and circumstances surrounding account closures, seeking data to construct an in-depth view of the issue’s scope.
In recent years, there has been a notable rise in the number of bank accounts being closed, prompting the FCA’s interest. However, the extent to which these closures are justified remains uncertain. To address this, the FCA is actively engaged in this initiative to shed light on the reasons behind account closures and their overall scale. The FCA intends to share its findings with the Chancellor to facilitate a more comprehensive analysis.
Firms are required to provide comprehensive data by 25th August, encompassing the number of personal and business accounts held by banks, as well as the tally of accounts opened during the specified period. Additionally, the FCA will inquire about accounts denied, suspended, or terminated, seeking insight into the motives behind these actions. Notably, the inquiry will also delve into whether account closures have been influenced by expressions of political or other opinions.
The investigation covers both personal and business customers, including entities such as pawnbrokers, charities, and political parties. The FCA will also seek detailed information on complaints, customer groups, policies, and procedures. The data collected will span from 1st January 2022 to 30th June 30 2023, and will be analysed in segments: H1 2022, H2 2022, and H1 2023.
By mid-September, an initial assessment of the collected data will be presented. This recent development follows the FCA’s response to Chancellor Jeremy Hunt’s queries, wherein the FCA announced its intention to undertake a comprehensive data exercise targeting banks and building societies that offer payment accounts to both consumers and businesses.
To see the FCA’s information request, click here.