It is worrying that a sign of fraud was so easily placed on an account before being properly examined, as well as the way the banking giant treated a vulnerable customer. “However, we can terminate this agreement immediately or in a less formal manner (by stopping service delivery and closing your account) if we reasonably believe you have breached the terms of the agreement or if we have reasonable reason to believe that you have done one of the following things, which you cannot do. In that letter, which was seen by This is Money and simply signed, “The Barclays team,” as the bank stated in Section 11 of its retail agreement. The Financial Ombudsman Service will also review complaints about frozen or closed accounts, but can only guarantee the withdrawal of a service in accordance with the bank`s general terms and conditions. If this is not the case, it cannot do more than ask the bank to pay compensation for the inconvenience and compensate for the consequent damage. Barclays insists that the ethnicity of its customers does not make them more vulnerable and that it is their lifestyle and spending patterns, not their names, that are monitored by security algorithms. “Customers who make and receive real transactions have absolutely nothing to fear,” says a spokesperson. “Criminals who attempt to commit fraud and launder funds should rightly be concerned, as all banks and regulators will recognize, disrupt and prevent their activities.” It is inevitable, as Rahman does, that many victims are of Asian or African origin, as the correspondence with the observer shows. As a result, people from these regions may be particularly vulnerable, as countries considered highly vulnerable to terrorism and money laundering are Asian and African. 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. The Financial Ombudsman Service, which handles unresolved customer complaints, classifies all cases under the relevant financial product, such as giroaccounts, not the nature of the problem, so it cannot say whether complaints about closures are increasing or whether certain ethnic groups are disproportionately affected. The Financial Services Consumer Panel, a legal body that defends the interests of consumer policy, says the law needs to be changed to prevent such conflicts of interest between banks and customers.
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. 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. A Barclays customer with acute anxiety and depression is devastated after the banking giant closed its three accounts without explanation or warning. According to a survey by the Financial Conduct Authority, banks are increasingly including accounts receivable and are not required to explain why. Clients are also not allowed to hear the results of an investigation. The consequences for innocent victims can be devastating, because once a name appears in a fraud database, it may not be possible to open another bank account elsewhere. 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.