Account Closures?

[Frankthered]

I've been considering changing my business current account from HSBC and had settled on Starling.

Even got as far as starting an application, but got stuck on part of it (long story, simple solution!). But while it was stuck, I started to see lots of "internet" stories about accounts being suspended due to various (apparently) minor reasons. (Of the "Computer says NO." variety by all accounts. Also applies to their personal customers.)

Apparently, these will take 6 weeks to resolve, and may result in account closure. I'm sure that these actions are valid in some cases, but it does appear that in others, it is simply a case of the business receiving a larger than normal payment. This probably wouldn't be a problem for me with my current client, but wouldn't want my account being locked/closed just because I had a large expenses claim for a trip to the USA, for example.

Has anybody on here experienced an account suspension/closure with one of the fintech banks, or is it the usual "internet' phenomenon of a handful of poor experiences being the only ones anybody hears about?

The other main option I was considering was Metro (because at least then I could go and talk to / shout at somebody if I needed to!) but I hear that they are not on the best financial footing these days, so might end up sticking with HSBC after all!!

[AlvinSultana]

Frankthered said:

I've been considering changing my business current account from HSBC and had settled on Starling.

Even got as far as starting an application, but got stuck on part of it (long story, simple solution!). But while it was stuck, I started to see lots of "internet" stories about accounts being suspended due to various (apparently) minor reasons. (Of the "Computer says NO." variety by all accounts. Also applies to their personal customers.)

Apparently, these will take 6 weeks to resolve, and may result in account closure. I'm sure that these actions are valid in some cases, but it does appear that in others, it is simply a case of the business receiving a larger than normal payment. This probably wouldn't be a problem for me with my current client, but wouldn't want my account being locked/closed just because I had a large expenses claim for a trip to the USA, for example.

Has anybody on here experienced an account suspension/closure with one of the fintech banks, or is it the usual "internet' phenomenon of a handful of poor experiences being the only ones anybody hears about?

The other main option I was considering was Metro (because at least then I could go and talk to / shout at somebody if I needed to!) but I hear that they are not on the best financial footing these days, so might end up sticking with HSBC after all!!

In my experience you need a normal high st bank to run a business.

We have tried Monzo, Revolut, Starling etc, and yes they will shut your account, or restrict it at the drop of the proverbial titfer.

Yes they look cheap and sexy, but the last thing you need when running your business is bullst with your bank.

They are fine if you dont need to rely on them.

[megaphone]

AlvinSultana said:

Frankthered said:

I've been considering changing my business current account from HSBC and had settled on Starling.

Even got as far as starting an application, but got stuck on part of it (long story, simple solution!). But while it was stuck, I started to see lots of "internet" stories about accounts being suspended due to various (apparently) minor reasons. (Of the "Computer says NO." variety by all accounts. Also applies to their personal customers.)

Apparently, these will take 6 weeks to resolve, and may result in account closure. I'm sure that these actions are valid in some cases, but it does appear that in others, it is simply a case of the business receiving a larger than normal payment. This probably wouldn't be a problem for me with my current client, but wouldn't want my account being locked/closed just because I had a large expenses claim for a trip to the USA, for example.

Has anybody on here experienced an account suspension/closure with one of the fintech banks, or is it the usual "internet' phenomenon of a handful of poor experiences being the only ones anybody hears about?

The other main option I was considering was Metro (because at least then I could go and talk to / shout at somebody if I needed to!) but I hear that they are not on the best financial footing these days, so might end up sticking with HSBC after all!!

In my experience you need a normal high st bank to run a business.

We have tried Monzo, Revolut, Starling etc, and yes they will shut your account, or restrict it at the drop of the proverbial titfer.

Yes they look cheap and sexy, but the last thing you need when running your business is bullst with your bank.

They are fine if you dont need to rely on them.

Interesting, why did they shut your accounts? What happened?

Edited by megaphone on Thursday 4th November 08:29

[AB]

I'd be worried about not being able to speak to a person. Do they offer relationship managers?

[AlvinSultana]

megaphone said:

Interesting, why did they shut your accounts? What happened?

Edited by megaphone on Thursday 4th November 08:29

With Revolut it was because we made lots of international transactions. At the time that was why we opened the account, Revolut were not charging for these transactions and we saw a way to reduce our costs.

When they saw all the transactions they asked lots of question, we provided all the documents, then they closed the account anyway. No discussion, no appeal.

So these accounts are ok in addition to your normal account. But not instead of.

[Jwan]

I've been with Starling for a few years and never had an issue, though I don't do much international trade.

[HammyHamster]

I'm with Starling business and they've been good so far. If a bank suddenly decides to close your account, do you have any come back via the financial ombudsman?

[monkfish1]

Frankthered said:

I've been considering changing my business current account from HSBC and had settled on Starling.

Even got as far as starting an application, but got stuck on part of it (long story, simple solution!). But while it was stuck, I started to see lots of "internet" stories about accounts being suspended due to various (apparently) minor reasons. (Of the "Computer says NO." variety by all accounts. Also applies to their personal customers.)

Apparently, these will take 6 weeks to resolve, and may result in account closure. I'm sure that these actions are valid in some cases, but it does appear that in others, it is simply a case of the business receiving a larger than normal payment. This probably wouldn't be a problem for me with my current client, but wouldn't want my account being locked/closed just because I had a large expenses claim for a trip to the USA, for example.

Has anybody on here experienced an account suspension/closure with one of the fintech banks, or is it the usual "internet' phenomenon of a handful of poor experiences being the only ones anybody hears about?

The other main option I was considering was Metro (because at least then I could go and talk to / shout at somebody if I needed to!) but I hear that they are not on the best financial footing these days, so might end up sticking with HSBC after all!!

Avoid Metro. Whilst claiming to be "not" like high street banks, they are in fact just like high street banks, but without decent IT systems or staff that know anything about, well, banking. Ametuer would be a good one word summary.

[ReverendCounter]

monkfish1 said:

Ametuer would be a good one word summary.

Ahem...!

[Frankthered]

AlvinSultana said:

megaphone said:

Interesting, why did they shut your accounts? What happened?

Edited by megaphone on Thursday 4th November 08:29

With Revolut it was because we made lots of international transactions. At the time that was why we opened the account, Revolut were not charging for these transactions and we saw a way to reduce our costs.

When they saw all the transactions they asked lots of question, we provided all the documents, then they closed the account anyway. No discussion, no appeal.

So these accounts are ok in addition to your normal account. But not instead of.

LOL! Thanks for sharing that. Bank offers USP feature to attract customers and then closes customer account for using feature!!

I guess this example follows the pattern of suspensions/closures that I've seen on the Interweb. Bank's AI picks up "unusual" activity (larger than usual amount or sum from an unusual source) and flags it. Account gets frozen and then sits there for maybe six weeks before a human even looks at the issue - seems to be happening with a lot of personal accounts too.

As for somebody to talk to, yes, it is possible to call them, but the support staff don't seem to be able to do much. Starling don't AFAIK have relationship managers - I used to have one of those with HSBC, but I think that feature has gone now, but then, I haven't had occasion to contact the bank in 12 years of trading, so I guess it hasn't made too much difference!

I am an Engineering Consultant/Contractor, so my needs are pretty straightforward from a banking perspective!

[bramley]

Funnily enough I’m in this exact position. Been with HSBC for years then covid hit and my business died down.

They texted me a while back saying they’d noticed I hadn’t used my commercial card for ages and would close it unless I contacted them. Short version of events is that I thought it may as well be shut down so didn’t pay much attention to the subsequent messages and letters until my debit card got declined. Turns out the whole account has been shut down. With money in there I hasten to add; I can’t access it.

Went into local branch and they said it was all to do with safe guarding?! Major pain in the backside and can’t invoice my clients because I can’t accept their payments.

Trying to open an account with starling…

[Frankthered]

bramley said:

Funnily enough I’m in this exact position. Been with HSBC for years then covid hit and my business died down.

They texted me a while back saying they’d noticed I hadn’t used my commercial card for ages and would close it unless I contacted them. Short version of events is that I thought it may as well be shut down so didn’t pay much attention to the subsequent messages and letters until my debit card got declined. Turns out the whole account has been shut down. With money in there I hasten to add; I can’t access it.

Went into local branch and they said it was all to do with safe guarding?! Major pain in the backside and can’t invoice my clients because I can’t accept their payments.

Trying to open an account with starling…

The safeguarding thing is what really made me want to part ways with HSBC - at least I figured out I needed to do something and eventually managed to sort it out before they closed my account, although they still haven't given me anything in writing to confirm that they're not closing it! (I was told I had passed the checks over the phone and the date has passed and the account is still open, so I guess it's ok!)

I completely get why you would choose Starling - it's free, reviews are generally good (even a couple of people on the thread - thanks to both for your contribution) - they win awards and are recommended by Which?, MSE and others.

I sympathise with your position - I was under the cosh with the HSBC closure date approaching and the Starling account taking longer than I had hoped to open, I thought I might get stuck without an account.

Maybe the answer is to run Starling alongside something else to see how it goes, but then, why bother?

[ninja_eli]

Monzo also provide a business account, although I understand Starling is the more secure business at the moment (financially).

The problem a lot of challenger banks had/have is in the pursuit of growth, they sort of ignored the regulatory aspects of what they're meant to be doing. The systems and controls in these banks have been reviewed and, probably, found lacking, hence the regulatory scrutiny Monzo is under, and it looks apparent that Starling also had some changes internally, as their onboarding process has slowed right down and they are asking far more questions than ever before.

The best advice is to have a few accounts knocking about in case you need one. All it takes is one suspicious transaction (which doesn't even have to be particularly suspicious!) and your business is potentially on hold for up to 42 days without anyone telling you what's going on. Be aware of the difference between payment institutions, emoney institutions and banks. Payment institutions should NOT be holding your money at all, emoney institutions are not covered by FSCS (but do have to safeguard all funds, and hold 102% of client money) and banks are FSCS covered (assuming UK bank of course) and can provide loans and so on.

HSBC should not be blocking accounts for long periods unless they have filed a SAR and requested a DAML/DATF which means allowing transactions to go through could potentially be in contravention of POCA. If they have blocked your account for an extended period of time, you can make a complaint and escalate to Ombudsman. They usually cave in and over you compensation for blocking you in excess of what they were meant to. But 10 days is the minimum to wait. The bar for filing a SAR is very low.

The bank is your agent and is not meant to hold your funds to ransom for you providing them further documents/answers. They should really just close your account and exit you if you're not able to satisfy their CDD/KYC requests. Or if they have suspicion of money laundering or terrorist financing, raise it to the NCA and then act in accordance to regulation. Which is 7 working days from midnight of the SAR date, and if consent is refused it goes to moratorium period, a further 31 days. It can be extended beyond that, but you'd usually know about it as it needs a court to approve.

[Frankthered]

ninja_eli said:

Monzo also provide a business account, although I understand Starling is the more secure business at the moment (financially).

The problem a lot of challenger banks had/have is in the pursuit of growth, they sort of ignored the regulatory aspects of what they're meant to be doing. The systems and controls in these banks have been reviewed and, probably, found lacking, hence the regulatory scrutiny Monzo is under, and it looks apparent that Starling also had some changes internally, as their onboarding process has slowed right down and they are asking far more questions than ever before.

Yes, that makes a lot of sense. It feels like they have maybe swung a little too far to the side of caution but that should (hopefully) settle down to a more reasonable level before too long.

ninja_eli said:

The best advice is to have a few accounts knocking about in case you need one. All it takes is one suspicious transaction (which doesn't even have to be particularly suspicious!) and your business is potentially on hold for up to 42 days without anyone telling you what's going on. Be aware of the difference between payment institutions, emoney institutions and banks. Payment institutions should NOT be holding your money at all, emoney institutions are not covered by FSCS (but do have to safeguard all funds, and hold 102% of client money) and banks are FSCS covered (assuming UK bank of course) and can provide loans and so on.

This also makes a lot of sense but I kinda grudge paying one bank a monthly fee, never mind having two or three business accounts - I mean, that could cost as much as £20 a month. (I am shaking my head at myself as I see myself typing this!!!)

ninja_eli said:

HSBC should not be blocking accounts for long periods unless they have filed a SAR and requested a DAML/DATF which means allowing transactions to go through could potentially be in contravention of POCA. If they have blocked your account for an extended period of time, you can make a complaint and escalate to Ombudsman. They usually cave in and over you compensation for blocking you in excess of what they were meant to. But 10 days is the minimum to wait. The bar for filing a SAR is very low.

The bank is your agent and is not meant to hold your funds to ransom for you providing them further documents/answers. They should really just close your account and exit you if you're not able to satisfy their CDD/KYC requests. Or if they have suspicion of money laundering or terrorist financing, raise it to the NCA and then act in accordance to regulation. Which is 7 working days from midnight of the SAR date, and if consent is refused it goes to moratorium period, a further 31 days. It can be extended beyond that, but you'd usually know about it as it needs a court to approve.

HSBC didn't block my account and nor (if I read his post correctly) did they block Bramley's. They were implementing their CDD/KYC process - unfortunately, Bramley didn't realise the seriousness of the situation - not entirely surprising as the letters didn't look any more significant than the usual marketing dross they send out! Fortunately, I did notice in time and provided the required information a few days before they were going to close my account! So ti seems they followed the CDD/KYC procedure you described.

Had a quick look around to see if any of the high street banks are doing free business banking at the moment and it appears my choice (other than Metro) would be TSB or Virgin Money.

[Vasco]

Anybody needing reliable, efficient, banking services should always maintain a minimum of 2 accounts. Use both regularly.