Debanking Surge: Hundreds of Thousands of UK Accounts Closed as Banks Cite “Financial Crime”
Banks have become judge, jury, and executioner for many British customers, closing accounts without telling people why. There is no appeal and those closures can follow someone around as banks share warnings with each other. Customers are told this is about “fighting crime”, and that claim has become a catch-all shield for very blunt decisions.
Corporate censorship is showing up beyond banking too: major services used to deliver streaming and web traffic have cut off customers abruptly, leaving newsrooms and broadcasters scrambling. One high-profile provider stopped services after claiming a breach of “terms of service” and then refused to explain further, forcing costly replacements. The tech gatekeepers now have the power to silence a site or channel overnight at scale.
The scale of debanking is stark: almost half a million customers were debanked last year, with an estimated 453,230 accounts shut. That number is more than ten times the 45,091 accounts closed in 2016-17 and an 11pc rise on the 408,000 closures recorded in 2023-24.
Banks say each closure was for “financial crime reasons”, a label that covers everything from suspected fraud to patterns flagged by compliance systems. Nigel Farage, who was controversially debanked by private bank Coutts in 2023, described the figures as “appalling” and blamed European legislation which, he said, “makes it cheaper for banks to close accounts over unusual transactions”.
New rules are due to force lenders to give customers more notice — at least 90 days — and clearer explanations when accounts are closed, but the protections are limited. They will only apply to accounts opened after April 28 this year and include exemptions to allow banks to meet financial crime obligations. That leaves millions still vulnerable under the current regime.
British law allows banks to close accounts for commercial reasons or when they suspect criminality, and there is no legal right to a bank account in the UK as there is in countries like France and Belgium. That legal gap hands private firms enormous discretion over who can participate in basic economic life. When private decisions become effectively public exclusions, the consequences ripple through work, saving, and business.
Regulatory demands have tightened since 2017, forcing banks to monitor activity and verify identities more aggressively. Those anti-money laundering rules mean a bank that suspects wrongdoing may be legally barred from explaining why it shut an account. Customers are often left stunned, told they are closed without being given evidence or a route to contest the decision.
The scale of the problem the system is meant to tackle is significant: the National Crime Agency estimates £10bn is laundered through the UK’s banking systems every year. That number fuels regulators and firms to clamp down, sometimes with heavy-handed tools that impact innocent people caught in automated filters and cautious compliance teams.
Regulatory action against banks for weak anti-fraud systems has happened too: in December the Financial Conduct Authority fined Nationwide £44m for ineffective warning systems and failures to act. In one case Nationwide allowed a customer to receive 24 payments totalling £27.3m over 13 months into a personal current account, and HMRC was unable to recover £800,000. Since 2021 the city regulator has levied 13 fines on banks for lapses, totalling more than £300m.
Another pressure on lenders comes from October 2024 rules that require them to reimburse victims of authorised push payment fraud. In the first half of last year banks repaid in 88pc of cases, totalling more than £84m, with most refunds processed within days. Some experts have argued those reimbursement obligations encourage tighter account closures as a defensive move.
James Graham, a senior researcher at think tank the Prosperity Institute, warned: “The continued rise in account closures, as shown by this new data, shows that the debanking epidemic remains a present and real danger for increasing numbers of British citizens.”
He added: “Preventing crime sounds noble, but nobody believes another 453,000 people are financial criminals, on top of the 408,000 in 2024, and 317,000 in 2023.”
Maxwell Marlow of the Adam Smith Institute said bluntly: “The scourge of debanking continues to blight the British public and significantly impacts the Square Mile.”
He went on: “Our finance system thrives through freedom – it is why we were the centre of global capitalism for so long, and we became rich from it. If we choose to reject these principles by ignoring this issue, our liberties and prosperity will be punished collectively.”
A UK Finance spokesman said: “Banks must comply with strict legal and regulatory requirements in terms of verifying customers and preventing financial crime. As a result, a small proportion of accounts are closed, but only after extensive review and investigation.”
A Treasury spokesman said: “Debanking is wrong, which is why we’ve put protections in place for millions of people and small businesses. Under the new rules, customers will receive at least 90 days’ notice and an explanation for any account closure, strengthening protections which prohibit banks from discriminating against someone based on their political opinions.”
An FCA spokesman said: “Fighting financial crime is one of our priorities. Fraud makes up over 40 pc of crime in the UK, robbing people of their hard-earned money. It’s important banks and building societies play their part, including closing accounts they have suspicions about. Only a tiny fraction of accounts are closed – and we expect firms to act proportionately and treat customers fairly.”