Critics say these rules are enforced by “overzealous” banks. The consumer panel of financial services, which reports to city Watchdog as a whole, requires that customers be treated more equitably in these circumstances (see right). In this letter, seen by This is Money and simply signed, the bank referred to Section 11 of its retail agreement. A Barclays customer with acute anxiety and depression is devastated after the banking giant closed its three accounts without explanation or warning. Caroline Barr, a member of the Financial Services Panel, said of the Bentley case: “The bank is acting as if the account owner is suspected. She may act as if she had no duty of care to that client because she does not have one. Barclays` initial reaction was overwhelming. “We have taken the appropriate steps that customers would expect of us if an unusual transaction had been concluded,” he said. “On this occasion, we are pleased that the transaction was real and we are happy to return the money to our customers.” According to a survey by the Financial Conduct Authority, banks are increasingly including accounts receivable and are not required to explain why. The CFA announced last year that it is working to improve the way banks identify risk accounts and communicate with their customers.
What is more telling is that a Barclays spokesperson told Telegraph Money: “We don`t comment on individual customer cases. As soon as we are alerted to suspicious account activities or are controlled by transaction profiling, we investigate the circumstances, and if we are satisfied that the account is being used to steal the proceeds of crime, we act as quickly as possible to close the account. It is worrying that a sign of fraud was so easily placed in an account before being properly examined, as well as the way the banking giant treated a vulnerable customer. State rules require banks to monitor customers` accounts for the risk of money laundering or financial crime, and atypical transactions can trigger fraud filters. These filters identify connections or payments from countries considered risky and, under the Proceeds of Crime Act 2002, banks must not “spill” a customer who may be investigated. Banks are not required to explain their actions to their customers. Often, through closed verification procedures, clients never discover the crime they may have committed. Rahman is one of a growing number of customers whose bank accounts have been closed without warning or explanation. Over the past two years, the Observer has been contacted by disoriented readers from all backgrounds – including an economics professor, a migraine charity, a leading campaign group and many ordinary domestic workers whose finances involve nothing more exotic than a holiday in Spain. It does not have the power to insist that the account be reinstated.
And while it may require the bank to provide evidence of illegal activities, it cannot always share it with the customer. In many of these cases – some of which have been reported in these pages – it is proposed that innocent people be subjected to increasingly stringent regulations to combat money laundering and other financial crimes. It says: “We can close an account (and stop providing services and terminate this agreement) by setting a deadline of at least two months.