Watchdog begins probe into number of customers ‘debanked’ by big banks

The Financial Conduct Authority sent a questionnaire on account closures to the UK’s biggest banks and building societies on Wednesday.

FCA begins probe into debanking with questionnaire on account closures (Alamy/PA)

The UK’s financial watchdog is set to find out how many customers have been “debanked” by the UK’s largest banks as part of a probe into account closures and freedom of expression.

The move by the Financial Conduct Authority (FCA) follows the scandal sparked by politician Nigel Farage after he revealed that Coutts decided to shut down his bank account.

It resulted in the Government bringing in new rules to clamp down on unexplained bank closures, and culminated in the resignations of the bosses of Coutts and its owner, NatWest Group.

The FCA issued a questionnaire for the largest banks and building societies on Wednesday after saying it had launched a review into account terminations across the sector.

It will ask for information on the number of customers who have had their accounts terminated or suspended, or been denied banking services, and the reasons why.

Banks will also be asked about issues relating to freedom of expression, and how many complaints they have received from barred customers.

Chancellor Jeremy Hunt said last week that debanking poses a “threat” to free speech, adding: “You can agree or disagree with Nigel Farage but everyone wants to be able to express their opinions.”

Mr Farage had publicised internal Coutts documents which raised concerns the former Ukip leader was “xenophobic and racist” and that he held views which do not align with the bank.

NatWest Group has since launched an independent review into how it handled the Farage case, including Coutts’ policies in relation to customer account closures.

Banks have about two weeks to answer the FCA’s questionnaire. The watchdog is expected to publish its analysis in mid-September.