NatWest closed my daughter’s account. Why?

P.R. writes: I write on behalf of my daughter, who is distraught after receiving a text from NatWest, ending her banking relationship with it and suspending her account. I was assured this would not affect my account with the bank, but it has as I control a First Saver account for her and this too has been suspended.

YOU contacted me after waiting three weeks in the hope of an explanation from NatWest. You told me you had spoken to various members of staff, but had been passed from pillar to post. Since then it has taken far longer than I imagined to try to get to the bottom of why the bank decided to dump your daughter.

NatWest itself has added to the confusion. You received a letter from the bank, saying it was ending its relationship with you too. The letter referred to the account you operated for your daughter, but it went on to say that the letter may not mention all your accounts.

The strong wording ‘ending its relationship’ with you suggested that all your own accounts were also being closed down with no explanation. The bank then contradicted its own letter to you, saying that you could have an account in your sole name but not a joint account with your daughter. So it was not really ending its relationship with you.

Or was it? You tried to get straight answers from no fewer than 11 officials at the bank, without success, and all this time your daughter had no access to her savings of about £13,000. I did make some headway though, when I contacted officials at NatWest head office. It confirmed that it was only your joint savings account with your daughter that had been affected, and not your other accounts. And they promised to return the £13,000 if your daughter completed a release form.

Intriguingly, the bank told me that legal requirements could mean that ‘while acting in a customer’s interests, NatWest is required to delay or refuse to act on a customer’s instructions’.

This seems to mean that the bank believes your daughter was involved in money laundering or fraud, but NatWest cannot say this bluntly because the same legal requirement makes it an offence to tip off someone who might be under investigation.

The bank has now released your daughter’s money, but it held it in a non-interest-bearing account for some time. This meant she was refused access to her cash and earned no interest.

You have complained to the Financial Ombudsman Service, but the root cause of the problem is far wider than this. Legally, banks are treated just like greengrocers, fishmongers, or any other kind of shopkeeper.

They can refuse to serve anyone they choose as long as they do not discriminate on grounds such as race or religion.

But closing someone’s bank accounts without revealing a reason, and with no appeal, is far more serious than denying them a bunch of bananas or a couple of kippers. It is time the law recognised this.