New rules to stop banks from unfairly closing your account

Banks will have to give 90 days’ notice and a clear explanation before shutting accounts from April 2026 under new rules to protect customers from unfair account closures known as 'de-banking'.

De-banking refers to providers closing, or refusing to open, an account for certain customers and has been the subject of some controversy in recent years, most notably when Reform UK leader Nigel Farage threatened legal action after NatWest Group closed his account with its private banking arm, Coutts, in 2023.

In the last financial year, around 4,000 complaints about de-banking were made to the Financial Ombudsman.

Here, Which? explains what the new de-banking rules mean for you and shares the steps you should take if your bank decides to close your account. 

What are the new rules for bank account closures?

Under current rules, banks only have to give you two months' notice if they want to close your account or terminate a payment service and they don't have to tell you why. 

New government rules will increase the notice period to 90 days and banks will be expected to provide a clear explanation in writing. The Treasury has said that this will give people and businesses the time and information needed to challenge decisions, and to find a new bank.  

This doesn’t apply to cases of suspected fraud, as banks don’t have to give a minimum notice period if they think your account is being used for criminal purposes. 

The Treasury announcement states that the rules 'apply to contracts agreed from and including 28 April 2026, when the legislation is expected to come into force'. 

Which? has learned that it will be for providers to decide whether to apply the new requirements to relevant contracts entered into before this date, which means existing bank customers may still be subject to the old rules. 

• Find out more: best banks and bank accounts 2025.

Complaints about de-banking 

Account closures reached their highest level in more than a decade in 2023-24, when an estimated 408,000 bank accounts were shut down, dwarfing the 45,091 closed in 2016-17. These figures were obtained by The Telegraph under a Freedom of Information request to the Financial Conduct Authority (FCA).

Banks can generally close any accounts they like. However, they must treat customers fairly. This means giving reasonable notice and never closing accounts due to unfair bias or unlawful discrimination, such as race, religion and political beliefs. 

Businesses and individuals can take complaints about bank account closures to the Financial Ombudsman Service (FOS). Its figures show that complaints about de-banking jumped from 2,683 in the 2022-23 financial year to 3,858 the following year. The uphold rate also increased from 27% to 36%, meaning more investigators or ombudsmen found in favour of the complainant (the customer). 

We asked the FOS for the 2024-25 figure, which shows that complaints have broadly stabilised at around 4,000. It couldn’t provide an uphold rate, as the data is unpublished. 

The FOS said: ‘Account closures should always be carried out in line with the bank’s terms and conditions, and its wider obligations. If consumers are concerned that they haven't been treated fairly, they should contact us and we'll see if we can help. We are a free, independent service set up to resolve financial disputes informally and fairly. Each case is investigated on its own merits.’

• Find out more: how to take a complaint to the Financial Ombudsman.

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What to do if your account is closed

There can be valid reasons for closing accounts, for example, if you breach your bank’s terms and conditions or fail to provide information required in standard checks. But Which? has previously highlighted innocent people having their accounts closed with no warning due to suspected fraud.

While banks should always act swiftly to prevent financial crime, which includes freezing and closing accounts due to suspicious activity, they must take steps to avoid blacklisting the wrong accounts. 

Even if you think your account has been closed unfairly, it’s unlikely your bank will reverse its decision, but you can limit the stress it causes by following these six steps:

1. Make alternative arrangements Check what’s happened to the money in your account, as banks deal with this differently. Direct debits won’t be paid, so contact receiving firms to find other ways to pay. 
2. Complain Complain in writing to your bank or provider first. If you’re not happy with its response, or it doesn’t respond in eight weeks, you can go to the Financial Ombudsman Service (FOS). 
3. Look for Cifas markers It won’t appear on your credit report, so to do this, you must make a data subject access request to Cifas online using two forms of ID. 
4. Challenge markers Complain to the firm or organisation that recorded it. If this doesn’t work, you can take your complaint to Cifas. If that fails, you can take the matter to the FOS. 
5. Be careful with applications A Cifas marker alleging fraudulent activity will not appear on your credit report or directly affect your credit score, but it will be visible to firms that check the Cifas database when assessing customer applications. What will dent your credit score is making multiple rejected applications for financial products because you weren’t aware of the markers existence. 
6. Speak to providers If you have a Cifas marker recorded against you and need to open a bank account, speak to your desired provider before applying. Some providers may be more lenient than others or may offer a basic bank account with no overdraft. You could also consider a prepaid account that offers a current account, sort code and debit card.

Find out more: best basic bank accounts 2025.