Asked by: Lord Hacking (Labour - Excepted Hereditary)
Question to the HM Treasury:
To ask His Majesty's Government, further to the remarks by Baroness Penn on 19 July (HL Deb col 2319), whether their "plans for enhanced requirements applying to the termination of payment accounts" will include a requirement for banks to give customers sufficient reasons about the termination of an account whatever may be its terms and conditions.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
The Government published its policy statement on 21 July, setting out its plans to strengthen requirements relating to payment account contract terminations. These changes will increase the minimum notice period in cases of contract termination to 90 days – giving customers more time to challenge a decision through the Financial Ombudsman Service, or find a replacement bank.
Banks will also be required to spell out to the affected customer why they are terminating their account – increasing transparency and aiding customers’ ability to appeal decisions. This requirement will be subject to limited exceptions where firms need to comply with existing legal obligations, for example, under financial crime law.
The Treasury is working closely with industry, law enforcement and regulatory partners to ensure that expectations regarding these new requirements are clear.