Bank Account Closures and Legal Recourse
Nigel Farage recently hit the headlines having claimed that Coutts Bank had made the decision to shut his accounts on the basis of his political views and, in his opinion, asserted this evidenced an attempt by ‘the establishment’ to ‘force’ him out of the UK. His claims were initially called into question, with a source apparently from Coutts suggesting that it actually shut Farage’s accounts due to his holding insufficient funds1, rather than Farage’s political views. In response, Farage obtained disclosure by way of Data Subject Access Request (SAR), which appears to demonstrate that Coutts’ reputational risk committee (as at November 2022) no longer considered the relationship to be compatible, given his publicly held views.
From an article published by the Telegraph and subsequent coverage by BBC News on 18 July 2023, it would appear that this fishing exercise returned numerous references to ‘Brexit’ and ‘Russia’, leading some to comment that this was an undisputedly political decision. Whilst the BBC state that they have not seen the document2, the Telegraph’s claims of ‘36 pages of background briefings’3 suggest that SARs could become a useful tool in providing insight into the decision making on bank account closures, taking place behind closed doors.
Coutts’ response was to state that the decision to terminate Mr Farage’s account was “not a political decision but one centred around inclusivity and purpose”. This does represent something of a change of position from the previous reason given by Coutts for the account closure.
Farage has also asserted that he tried to open a new account with numerous other banks, all without success, and with no reasons being given for the refusal. Irrespective of Coutts’ motivations in the case of Farage, this is not the first high profile instance of financial sector entities being accused of shutting accounts due to the political views of the account holder.
In September 2022, PayPal was accused by parents’ campaign group UsForThem, which campaigned to keep schools open during the pandemic, of shutting down its accounts due to ‘the nature of its activities’. Another apparent target of PayPal were the accounts of campaign group Free Speech Union, and the personal accounts of its Founder and Director, Toby Young. A Times report dated 22 September 2022 suggested that PayPal had shut down the accounts of Free Speech Union due to the organisation’s stance on the Covid vaccine. Whilst PayPal have not specifically responded to these allegations, it confirmed that it ‘regularly assesses activity against our long-standing acceptable use policy and will discontinue our relationship with account holders who are found to violate our policies’.
More recently, in early July 2023, Sky News reported seeing correspondence confirming that Metro Bank would not open an account for an “anti-transgender” group. The bank’s rejection letter reportedly stated that its ‘policy doesn’t currently allow organisations to receive donations if not a registered charity, and for community groups to be linked to, or influence political policies of legislations.’
1 All UK clients and expats are according to Coutts required to save £3m+ or borrow (such as through a mortgage) or invest more than £1m with Coutts.
2 ‘Nigel Farage: Coutts document ‘shows bank account shut over my views’ by Oliver Slow, published by BBC News on 18 July 2023 (Nigel Farage: Coutts document ‘shows bank account shut over my views’ – BBC News).
3 ‘The dossier that blows apart the Coutts claims about closing Nigel Farage’s account’ by Gordon Rayner, published by The Telegraph on 18 July 2023 (The dossier that blows apart the Coutts claims about closing Nigel Farage’s account – telegraph.co.uk).
Ellie Boreham (Associate) is a member of Keidan Harrison’s Dispute Resolution team.