On 21 April 2024, the House of Commons Treasury Committee published a press release and related correspondence highlighting a ‘surge’ in the number of complaints received by the Financial Ombudsman Service (FOS) in relation to debanking.

The Committee flags that data provided in a letter from Abby Thomas, Chief Executive of the FOS, shows an increase in the proportion of complaints which were upheld by the FOS: 36% ruled in the complainant’s favour in the most recent year, compared with 27% or below in each of the previous three years.

The letter from the FOS also included data on the number of complaints it has received in relation to ‘restricted account closures’, i.e. cases which involve financial crime concerns, money laundering concerns or where the complaint involves a politically exposed person. Since 2020/21, the volume of complaints related to restricted account closures has almost trebled.

The Committee had previously (in February 2024) flagged that more than 140,000 business accounts had been closed by major banks. It has been looking closely at the issue of debanking in relation to its inquiry into whether small and medium-sized businesses have adequate access to financing.

Commenting on the data from the FOS, the Committee’s Chair, Harriett Baldwin, noted that “it’s clear there is evidence that some legally operating businesses are being unfairly de-banked. Banks should be doing all they can to support small business in this country, not pulling the rug out from beneath them with little warning. I expect our report will have something to say about what we’ve uncovered.”