Some banks wrongly closing customer accounts in more than three in 10 disputed cases

Some banks are wrongly closing customers accounts in more than three in 10 cases referred to the Financial Ombudsman Service (FOS), data given exclusively to Which? reveals.  

The ability for banks to close customers’ accounts quickly and without reason can be an important tool in the crackdown on fraud, especially when it comes to anti-money laundering rules.

However, previously unpublished data from the FOS suggests banks are not taking sufficient care to avoid closing down accounts of innocent customers, leaving them unable to access their money. 

Of the top 10 most complained about firms, TSB had the highest proportion of complaints upheld against it in four of the previous five years. In 2018-19 and 2019-20, the FOS disagreed with its actions in more than half of complaints relating to Cifas markers, which identify potentially fraudulent activity and notify other firms including banks, credit providers, insurers and utility companies about potentially risky customers.

FOS data given to Which? found that in the year 2022-23, the Ombudsman upheld two fifths (39%) of TSB customers’ cases, a third (33%) of HSBC customers and nearly a third (31%) of Barclays and Metro customers. 

Between 2021 and 2022, the FOS found against the Royal Bank of Scotland in more than four in 10 (44%) of account closure complaints (falling to 27% in 2022-23). 

In the year 2022-23, the FOS received more than 1,380 new complaints about the closure of current accounts, upholding a quarter (25%) of these.

Customers who successfully make a claim against their bank to the FOS rarely have their account reopened, but typically receive compensation and an apology.

A consequence of suspected fraudulent activity occurring in a customers’ account is being a recipient of a marker against your name on the Cifas National Fraud Database.

Consumers with Cifas markers against their name can struggle to be accepted for new products and services, leaving them unable to get new bank accounts, mortgages or even phone contracts for the six-year life of the marker.

There are hundreds of thousands of Cifas markers in existence and those who receive them against their name are not told, unless they make a subject access request. Being unaware could mean consumers end up making other applications for bank accounts or cards without success, which can negatively impact credit scores.

In order to assign a consumer with a Cifas marker, firms must be able to prove reasonable grounds for believing a fraud was committed or attempted and that evidence was clear, relevant and rigorous, such as reporting it to the police. Yet the number of Cifas marker cases overturned by the FOS suggests this too often is not happening. Cifas told the consumer champion that markers have prevented £1.6 billion worth of fraud in 2022.

Which? wants banks to make it clearer to customers what they need to do to challenge decisions about being denied service and for banks to review their decisions fairly, as consumers should not have to go to the trouble of pursuing time-consuming complaints with the FOS.

Which? also wants to see better means of sharing data between banks and other industries, such as social media firms, so that fewer innocent customers are caught up in the fight against fraudsters. This is why the government and the Information Commissioner’s Office must act to ensure there is a route to sharing data about suspicious behaviour and fraud. 

Sam Richardson, Deputy Editor of Which? Money, said: 

“Having your bank account closed without warning can be an incredibly stressful experience – not least at a time when millions of households are struggling to pay the bills. 

“Which? is concerned that some banks are wrongly closing customers’ accounts or handing them Cifas markers which can affect their ability to access other financial products for years. 

“Which? recognises the importance of banks having the ability to close accounts quickly in the fightback against fraud, but wants to see better communication to customers on what they need to do to challenge decisions, and fairer reviews by banks of these decisions – rather than leaving customers to have to take take their claim to the Ombudsman.” 



Notes to Editors 

Right of replies 

A spokesperson for TSB said: “We make a number of important decisions every day aimed at reducing fraudulent activity and preventing criminals from operating accounts – and we have one of the lowest number of reported cases from the institutions listed. Our close work with Cifas plays a vital role in reducing the incidence of fraud and an incorrect judgement is highly exceptional. We have acted on guidance from the FOS and our referrals in 2023 continue to improve.”


A UK Finance spokesperson said: “Protecting customers from the risks of fraud is an absolute priority for the banking and finance industry. Any decision to close an account is only taken after extensive review and analysis of the activity on the account and each case is dealt with on an individual basis. Banks are required to adhere to legal requirements when assessing criminal activity and in every case, the bank must always ensure the customer is treated fairly. UK Finance runs a consumer education campaign, Don’t be Fooled, which highlights the tell-tale signs and risks of being a Money Mule. We encourage all customers to never share their PINs, passwords or passcodes with anyone or allow your bank account to be used by someone unless you know and trust them.”


What to do if your bank account is closed 

  1. Make arrangements

Check what’s happened to the money in your account, as banks deal with this

differently. Direct debits won’t be paid, so contact receiving firms to make alternative arrangements.

  1. Make a complaint

Complain in writing to your bank or provider first. If you’re not happy with its response, or it doesn’t respond in eight weeks, you can go to the Financial Ombudsman Service (FOS).

  1. Look for Cifas markers

Check for a Cifas marker. It won’t appear on your credit report, so to do this, you must make a data subject access request to Cifas online at ( using two forms of ID.

  1. Challenge markers

Complain to the firm or organisation that recorded it. If this doesn’t work, you can take your

complaint to Cifas. If that fails, you can take the matter to the FOS.


About Which? 

Which? is the UK’s consumer champion, here to make life simpler, fairer and safer for everyone. Our research gets to the heart of consumer issues, our advice is impartial, and our rigorous product tests lead to expert recommendations. We’re the independent consumer voice that influences politicians and lawmakers, investigates, holds businesses to account and makes change happen. As an organisation we’re not for profit and all for making consumers more powerful.

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