A mother who was left unable to access any money after Barclays closed her bank account without explanation claims she was advised to borrow cash from family or use a food bank.
Kerry Maloney, a 30-year-old NHS worker, discovered her personal account with Barclays had been cancelled when she was unable to pay for petrol while taking her young children to school.
The incident happened a few days before Ms Maloney was due to be paid her salary at the end of April, and she claimed this meant she was left virtually penniless for around three weeks.
Barclays said it sent a letter giving Ms Maloney notice of its decision in the post in February which simply said it was taking the decision as per its ‘terms and conditions’.
It comes amid increasing concerns around the scale of ‘debanking’. The Chancellor Jeremy Hunt has written to the Financial Conduct Authority (FCA) asking for an investigation following the furore surrounding Nigel Farage.
Elite bank Coutts, which is owned by Natwest, closed his account without explanation. The former Ukip and Brexit party leader was able to obtain internal documents that showed staff believed his political views did not align with the firm’s “values” while making the decision.
Ms Maloney said she has no idea why Barclays decided to close her account. She said she never received the letter sent in the post and claimed that Barclays made no effort to try and contact her by any other method such as a phone call, text message or email.
Being ‘debanked’ caused her a huge amount of distress including having to cancel her daughter’s birthday party because she was unable to pay for caterers or entertainment in time, she said.
Barclays response was to suggest she borrow cash from friends or family and direct her to food bank charities for help.
“They left me in a situation where I didn’t have access to any money,” Ms Maloney said. “I just went into panic mode. They were emailing me about food banks and saying ‘can’t you borrow money off family?’
“Eventually they gave me £50 as a gesture of good will – I said ‘how is that going to feed my children?’
“My daughter’s birthday party didn’t go ahead.
“It was so embarrassing as a mum and they just didn’t want to help.”
Ms Maloney complained to the Financial Ombudsman about her treatment by Barclays and an investigator has agreed the bank did not make enough effort to inform her about its decision and should give her £300 in compensation.
But an investigator said Barclays did not have to offer an explanation as to why her account was closed, as long as the bank abided by its terms and conditions. “They didn’t do anything wrong here,” the investigator wrote in correspondence dated 2 August.
“Barclays have the ability to choose who they offer accounts to in the same way Miss M can choose who to apply to for financial services, nor are they required to share the reasons why they make these decisions.
“Although I can’t share the reasons, I hope Miss M take comfort (sic) in knowing that someone impartial has reviewed them and concluded they were reasonable.”
However, Ms Maloney remains worried that she doesn’t have an explanation, particularly as the letter said she can never bank with Barclays again in future.
“I’ve been blacklisted by Barclays and for what? Why can’t they tell me?” Why can the Ombudsman know [the reason] but I don’t know?
“What’s the big secret?”
Ms Maloney said Barclays staff were “useless” when she tried to get help on the phone and she ended up going into her local branch in person.
“The manager said ‘I’m really sorry, this isn’t the first time this happened’,” said Ms Maloney.
A Barclays spokesperson said: “Whilst we cannot comment on individual accounts, we comply with our legal and regulatory obligations.
“We would only withdraw banking services from an individual or business in exceptional circumstances.”
The Chancellor has said he wants new rules that mean banks have to explain why they have closed accounts and give customers 90 days’ notice.
In a reply last month, chief executive of the FCA Nikhil Rathi said it was unclear how widespread a practice it was for banks to terminate accounts for ‘unlawful reasons’ but said the regulator had been looking at the data.
He said the FCA was asking banks to provide details of the number of accounts closed and reasons for them, as well as information on new account applications that have been refused. The FCA said it would provide an update by mid-September.
“As the regulator, it is important that we understand the scale of the issue and the drivers behind a reported increase in account terminations,” Mr Rathi said.
A spokesperson for the Financial Ombudsman Service said: “Account closures should always be carried out in line with the bank’s terms and conditions.
“If consumers are concerned that they haven’t been treated fairly, they should contact the Financial Ombudsman Service and we’ll see if we can help.
“We are a free, independent service set up to resolve financial disputes informally and fairly. Each case is investigated on its own merits.”
