Natwest forced to payout up to £500 in compensation to customers who had accounts closed
NATWEST has been forced to payout up to £500 in compensation to a number of customers after the way it handled closing down their accounts.
Some customers fell into financial difficulties after Natwest closed their accounts, with some forced to use foodbanks or borrow cash to get by.
Natwest has been forced to cough up a number of payouts following complaints made to the Financial Ombudsman Service recently.
This is a body that settles complaints between consumers and businesses providing financial services.
Although the Financial Ombudsman said that Natwest was within its rights to close the accounts, it ordered the bank to pay out compensation to a string of customers because of the way they had been treated.
This means the money was awarded because of Natwest's customer service, not because it closed the accounts.
One customer received a £500 payout after Natwest closed their account stating that a £5,000 cheque deposited by the customer into their account was fraudulent or a counterfeit.
The bank placed a black mark against her credit file, and the customer said she has been unable to open a savings account and remortgage her buy-to-let properties.
But the Financial Ombudsman said that Natwest didn't have "sufficient evidence" to put this on her credit file.
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Another customer won a payout of £200 after Natwest closed his account but did not set up a payment plan for them to clear their £5,000 overdraft.
Natwest refused to allow the customer to repay his debt in phases, and instead passed his account to debt collectors.
But the Financial Ombudsman said this was not "fair and reasonable" and ordered Natwest to cough up £200.
While one customer said they turned to foodbanks and borrowing cash from family and friends after Natwest closed their account.
The customer was not able to access the money in their closed account for three months after a series of delays meant the funds were not released.
They said the delays caused them "severe distress" and he lost a house he was in the process of buying because he couldn't access his cash.
The Financial Ombudsman ordered Natwest to dish out £250 because the delays were "unnecessary" and put the customer in a "difficult decision".
A NatWest spokesperson said: “We have clear legal and regulatory responsibilities to protect our customers and accounts from fraud and the proceeds of crime.
"We take these responsibilities very seriously and will act if we detect any activity that falls outside those controls. A decision to close a customer’s account is only reached after very careful consideration.”
It comes following recent rises in complaints about bank account closures.
In 2019, complaints to the Financial Ombudsman service jumped by 20% from Brits who couldn't access their cash.
How to complain
Banks are allowed to close accounts without notice if they suspect fraud.
But if you think your account has been closed unfairly, you can complain to the provider involved.
If you don't get a response within eight weeks or you're not happy with the response you do get, you can take your complaint to the free .
The Ombudsman says most of the complaints it sees about bank account closures or freezes involve:
- the bank not giving enough notice - the Ombudsman suggests that between 30 and 60 days’ notice is a reasonable unless there are suspicions fraud is involved
- maladministration
- the bank giving conflicting information or advice
- the bank showing unlawful discrimination
- the bank failing to follow procedures properly
If your account is closed, you should also remember to rearrange any direct debit or standing orders as these will have to be paid manually until you can get a new account.
You have until Monday to close your M&S Bank current account - here's what you need to know.
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