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UK government to clamp down on “unfair” bank account closures

Banks and fintechs will not be able to refuse service owing to political reasons under new rules.

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The UK government has stepped into a row over bank inclosures vowing to clamp down on firms refusing to serve customers over apparent political links.

This week Nigel Farage, a former politician who was leader of the UK Independence Party and a key figure during the Brexit referendum, claimed he had been targeted by his bank Coutts.

Farage claimed Coutts, part of the NatWest Group - which is half owned by the UK tax payer, had deactivated his account owing to his political beliefs. 

Coutts remained silent on the issue until yesterday when NatWest’s boss Dame Alison Rose labelled an internal report to contain “deeply inappropriate comments”.

Rose’s apologies came hot on the heels by a statement by the government that it would update requirements on banks to ”protect freedom of expression”.

“Banks will be forced to explain and delay any decision to close an account under new rules, protecting freedom of expression. The Government has stepped in to address fears that banks are terminating accounts because they disagree with someone’s political beliefs,” it said in as statement.

The changes will increase the notice period to 90 days,  giving customers more time to challenge a decision through the Financial Ombudsman Service, or find a replacement bank.

“Banks will also be required to spell out why they are terminating a bank account – boosting transparency for customers and aiding their efforts to overturn decisions.”

Economic Secretary to the Treasury, Andrew Griffith, said freedom of speech was a cornerstone of UK democracy, and that “it must be respected by all institutions”.

“Banks occupy a privileged place in society, and it is right that we fairly balance the rights of banks to act in their commercial interest, with the right for everyone to express themselves freely,” he said.

“These changes will boost the rights of customers - providing real transparency, time to appeal and making it a much fairer playing field,” he added.

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