FCA finds debanking not based on political views but rather customer behaviour
Customer attitudes to staff, including racist language, was the primary reason behind banks closing accounts for political reasons, the Financial Conduct Authority has found.
As part of its review into access and closures of UK payment accounts, the regulator gathered evidence from 34 firms, finding that none closed an account between July 2022 and June 2023 primarily because of a customer’s political views.
The regulator published a report on its review today (September 19) and said it will be doing further work with firms to verify the data and to better understand the reasons behind, for example, the closure of accounts due to reputational risk.
The most common reason for closing, suspending or declining an account was because it was inactive/dormant or because there were concerns about financial crime.
There were four instances where ‘expression of political or any other opinions’ was the primary factor behind an account action.
But when the FCA followed up on these it emerged the primary reason for action was actually customer behaviour (such as racist language directed at staff) and not the expression of a political or other opinion.
Despite this, the body said it "does not necessarily" confirm it does not take place due to incomplete record taking or data limitations.
A spotlight was shone on the issue when Nigel Farage claimed he was 'debanked' by Coutts in July but his case is understood to have fallen outside of the reporting period in this review. An independent review is expected to be published on this case.
The review was not focused solely on politicians and the FCA is working on a separate review of UK politically exposed people.
Sarah Pritchard, director of supervision, policy and competition at the FCA, said: "It has given us some preliminary insights so we can see where we need to do more work and to consider any action we need to take. We have been very clear that it is unlawful for a customer to lose access to a bank or building society because of their legally expressed political views.
"That legal requirement doesn't apply to payment firms but we asked the question anyway because we think it is important to understand what is happening in the sector. Ultimately no firms told us that they did this."
She added: "Firms initially reported a small number of cases where it was a factor in their data but we took quick action to follow up with those firms and in each case the primary factor to cancel was not the customers political views.
"In the majority of cases it was the way those customers behaved to the firms staff but we know it is important to be sure so we will be doing more analysis to better understand the data that the firms have reported to us."
tara.o'connor@ft.com
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