Barclays closes series of business accounts, leaving struggling small businesses without access to funds
- An influx of readers told This Is Money their accounts had been closed
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A number of Barclays business customers have been told their accounts have been frozen or closed entirely, leaving them without access to funds, This Is Money understands.
An influx of Barclays business customers wrote to This Is Money to claim their accounts were closed without warning.
It comes after The Times reported that the bank had struggled to open new business accounts for more than four months.
Shut out: An influx of This Is Money readers told us their Barclays business accounts had been frozen or closed
It is understood that Barclays is writing to customers three times by post, via online and mobile banking alert banners, as well as SMS and email reminders.
If a customer does not respond after this, they have 50 days before Barclays closes their account.
However, one reader told us that her local branch staff told her that the first and last letters were not sent at all and she did not receive the second.
The postal strikes probably had an impact on the timely delivery of these letters, but our reader also claims that she received no notification through online banking.
She also claimed that branch staff told her that Barclays phone lines had been blocked because the bank had been inundated with calls.
“We lost a week of work, which in the current economic climate is terrible for us, I can’t tell you how stressful it is, and we still haven’t made it out of it.” she declared.
A Barclays spokesperson said: “As part of our ongoing responsibility to help prevent financial crime and meet our regulatory obligations, we are required to keep our customers’ account information up to date.”
“We are writing to customers asking them to provide us with important information regarding their Barclays Business account.
“In cases where we do not receive a response with up-to-date account information, we are required to proceed with account closure, so it is very important that account holders respond to such requests from their bank.”
It is understood that this only affects business customers and not personal accounts.
Why do banks close accounts?
To prevent fraud and protect against the loss of money, banks have the right to freeze and forcibly close accounts, often without warning.
This is part of the standard fine print that customers sign up for when they open an account.
There are several reasons why an account suspension or termination may occur.
A company may have been deemed to have breached a credit agreement with the bank, for example, or a restraint order may have been obtained by one of the company’s creditors.
In more serious cases, the bank may have obtained evidence of fraud or money laundering.
The bank is generally not required to give a detailed explanation when closing an account.
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