Barclays closes small business accounts leaving struggling companies without access to funds

Economy
By Liam

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Barclays is closing a series of corporate accounts that prevent troubled small businesses from accessing funds

  • An influx of readers have told This Is Money that their accounts have been closed
  • Are you affected? Please contact editor@thisismoney.co.uk

By Angharad Carrick Because this is money

published: | Updated:

A number of Barclays corporate clients have been told their accounts have been frozen or completely closed, preventing them from accessing funds, This Is Money understands.

An influx of Barclays corporate clients have written to This Is Money that their accounts have been closed without warning.

This comes next The times reported that the bank had been struggling to open new business accounts for more than four months.

Close: An influx of This Is Money readers have told us their Barclays business accounts have been frozen or closed

It is clear that Barclays is writing customers three times by mail, through warning banners on online and mobile banking, and reminder texts and emails.

If a customer does not respond after this, they have 50 days before Barclays closes their account.

However, a reader told us that the staff at her local branch office told her that the first and last letters had not been sent at all and that she had not received the second.

The strikes at the postal service probably impacted the timely delivery of such letters, but our reader also claims that she was not notified via internet banking.

She also alleged that branch staff told her that Barclays phone lines had been blocked because the bank had been inundated with calls.

“We lost a week of work, which in the current economic climate is terrible for us, I can’t tell you how stressful it is, and we’re still undecided,” she said.

A Barclays spokesperson said: ‘As part of our ongoing responsibility to help prevent financial crime and to comply with our legal obligations, we are required to maintain up-to-date information on our clients’ accounts.

“We are writing to customers asking them to provide us with some important information regarding their Barclays Business account.

“If we don’t get a response with up-to-date account information, we’re required to proceed with the account closure, so it’s very important that account holders respond to these requests from their bank.”

Obviously, this only affects business customers and not personal accounts.

Why do banks close accounts?

To prevent fraud and protect themselves from losing money, banks have the right to freeze and force close accounts, often without warning.

This is part of the standard fine print that customers sign up with when they open an account.

There are multiple reasons why an account may be suspended or closed.

For example, a company may be deemed to have violated a credit agreement with the bank, or a freezing order may have been obtained by one of the company’s creditors.

In more serious cases, the bank may have obtained evidence of fraud or money laundering.

The bank is usually not required to provide a detailed explanation when closing an account.

Are you affected? Please contact editor@thisismoney.co.uk

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