Banks warn against closing accounts due to politics – BBC News

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Caption,

Secretary of Culture Lucy Frazer

The Secretary of Culture said he was concerned that banks might close customer accounts for political reasons following claims from Brexiteer Nigel Farage.

Lucy Frazer said it was something the bank “had to think about very carefully”.

Last week, Mr Farage said his bank closed his account, claiming it was “serious political persecution” from the anti-Brexit banking industry.

The government is investigating the payment provider for the account closure.

Last year, the closed Paypal account was run by Toby Young, who is general secretary of the Free Speech Union. They were then recovered by the US payments company.

The government later announced a review of payment services regulations, including the practice of companies apparently closing the accounts of people or businesses who held views the lenders disapproved of.

Ms Frazer told LBC, the radio station: “I’m concerned that people’s accounts may be closed for the wrong reasons and that’s something they do. [the banks] must be thought through.

“Banks are regulated, and those are things that regulators have to consider.”

Mr Farage said he was notified two months ago that his bank, which he did not name but understood to be Coutts, was closing his personal and business accounts.

The BBC has approached Coutts’ parent company, Natwest, for comment.

‘Commercial decision’

Mr Farage, who is a former leader of UKIP and a former member of the European Parliament, suggested that the reasons for the decision could be linked to the laws that banks follow against “politically exposed persons” or PEPs.

These are people in prominent positions or influence who may be more prone to engaging in bribery or corruption.

Banks are required to perform extra due diligence on PEPs.

Mr Farage said he was told by his bank that closing his account was a “commercial decision”.

UK Finance, which represents the banking industry, said lenders should discuss closing accounts with customers “to the extent appropriate and permissible”.

It said though there would be “situations where it may not be appropriate or permitted for banks to engage in dialogue to explain their reasons”.

This will include breach of terms and conditions, “colleague abusive or threatening behavior” or where the bank has been directed not to do so by “regulators, HM Government, police and other authorities”.

Mr Farage said he approached seven other banks to open personal and business accounts and was turned down by all of them.

However, he admitted that there were other reasons why his bank acted.

“Whether for reasons of being politically active, or having opinions that are disapproved of by the modern corporate bank, too many accounts have been closed in recent years,” he told the BBC.

“I hope my case clears things up and we can get changes to the law. Everyone in England should be entitled to a bank account.”

Speaking in the House of Commons on Monday, security minister Tom Tugendhat, said “Such a closure, on political grounds – if that is the case and after all we only have those accusations at this point – must be absolutely unacceptable.

“PEP is there to prevent the use of corrupt banking facilities by politicians in corrupt regimes. It is not here to silence individuals who may have views that we may agree with or disagree with.”

Results of government consultations on payment services regulations are expected in the next few weeks.

The Finance Department declined to comment.

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