Two years ago, the UK political and banking world was rocked by the “de-banking” of Nigel Farage, the politician. It turned out that other figures in the public eye, or related to those who were in politics, had struggled to gain access to accounts, or had them shut. Policymakers have sought to make changes. How far have they moved?

In the summer of 2023, the UK banking sector was hit by the controversy over the “de-banking” of political leader and media figure Nigel Farage, by Coutts – part of NatWest Group. The affair did not just raise questions about the way the bank treated Farage (now leader of the Reform Party), it also lit up the plight of other political figures and those who, for their political views and positions, had their bank accounts removed. The stories have prompted the current UK government to call for reforms over how, for example, "politically exposed persons" are defined and treated. 

Lawyers at Kingsley Napley examine where we are in regulatory terms with de-banking. The writers are Rebecca Niblock and Will Hayes (criminal litigation) and Helen Morris and Ben Atkin (reputation management). We are pleased to share these views; the usual editorial disclaimers apply. We invite responses: email tom.burroughes@wealthbriefing.com and amanda.cheesley@clearviewpublishing.com  (Editor’s note: I gave my views on the Farage case, and others, here.)

New rules recently announced by HM Treasury offer greater protection for individuals facing de-banking. However, banks retain the power to take this drastic step, along with the serious consequences it entails. 

At the heart of many de-banking decisions lies a reputational concern. Banks, motivated by risk aversion and regulatory pressure, routinely rely on compliance databases and adverse media to assess whether a customer poses a potential threat to their integrity or operations. These assessments are frequently based on unverified, inaccurate or misleading information, and the individuals affected are rarely given the opportunity to correct the record before action is taken. In this context, even a mistaken online article, an old allegation, or a mistranslation can trigger financial exclusion.

Understanding the potential triggers and how to minimise the risk of them arising is therefore essential. 

De-banking
De-banking typically occurs where a bank has come into possession of information about a customer (individual or business) and decides to terminate the commercial relationship. 

Triggers can include an unusual transaction, an adverse entry on a compliance database or press reporting of alleged wrongdoing. If criminal conduct is alleged, it need not be financial in nature, nor proven, nor result in a criminal conviction. Banks may act pre-emptively in response to these signals, especially where potential risk to their systems or regulatory scrutiny is perceived, regardless of whether the concerns are substantiated.  

Banks often provide no reasons for the closure of an account, instead issuing a brief notification that the relationship is being terminated. In many cases, efforts to obtain further explanation prove unsuccessful. This is partly because banks may be under a legal obligation not to disclose the underlying rationale, particularly where the decision has been informed by a suspicious activity report (SAR). In such circumstances, providing further information could constitute a tipping-off offence under the Proceeds of Crime Act 2002 (i.e. providing information which is likely to prejudice an investigation). 

However, even where no legal prohibition applies, banks may still decline to provide reasons. This may reflect internal risk management policies, a desire to avoid regulatory scrutiny or potential liability, or reliance on contractual terms which permit account closure at the bank’s discretion and without cause. In practice, the combination of legal, regulatory and commercial considerations often result in a refusal to engage, leaving affected individuals or businesses with little insight into the decision or meaningful recourse.

Basic bank accounts
Although it was a welcome development in principle, the 2015 requirement for the UK’s nine largest personal current account providers to offer basic bank accounts to eligible individuals has offered limited practical assistance to those who have been de-banked. In theory, this should ensure continued access to essential financial services. However, in practice, applicants often encounter opaque eligibility criteria, long delays, and unexplained refusals. 

Basic accounts also come with significant limitations, such as no overdraft facilities and restricted functionality, which may be inadequate for many individuals trying to operate effectively in modern financial life. Crucially, these accounts are not available to businesses, leaving company directors and sole traders particularly exposed when commercial accounts are withdrawn.

New rules
HM Treasury has recently (28 April 2025) announced new rules to address some of these issues. Banks must now give customers 90 days’ notice before closing accounts and they must provide a clear explanation for the decision. This is an additional 30 days on the existing 60 days’ written notice stipulated by retail banks’ terms and conditions. 

This is welcome news. In the terrible circumstances where one’s bank account is closed, every day counts. Whilst these reforms are a positive step towards greater transparency and accountability, however, they do not go far enough to address the deeper structural issues that enable de-banking decisions to be made without real scrutiny or recourse.

Reputational issues
The risk of de-banking is one of many reasons why one’s reputation must also be closely monitored. False allegations in the press or online (even in obscure corners of the internet) can have significant implications, beyond the already uncomfortable questions that may result from friends, family and colleagues. 

Misreporting can be picked up and republished by compliance databases used for checking an individual’s risk profile, returning those results on a search of their name and categorising the risk that they pose. If the underlying information is wrong, then it is imperative to challenge that with the original publisher or the compliance database to minimise the risk of de-banking. 

By way of example, we are aware of situations where a bank’s concern has stemmed from something as seemingly inconsequential as a website’s mistranslation of a foreign judgment. That reporting can then be incorporated into a compliance database’s record about an individual, which the bank then reviews on a routine check. That alone can lead to flags which lead to de-banking. It is important to challenge inaccuracies about one’s online profile because a failure to do so can have serious consequences. We can help. 

Right to be forgotten or right to rectification
Submissions can be made to data controllers (including third-party checking services, compliance databases and/or search engines) to either rectify or remove information that is wrongly being processed about an individual to ensure that inaccuracies are corrected and misunderstandings between an individual and bank are not allowed to arise.

INTERPOL Red Notices
Red Notices are international alerts notifying the authorities in all INTERPOL member states that an individual is wanted for prosecution or to serve a sentence. They serve an important function, but they are liable to abuse and are sometimes issued based on spurious allegations pursued for improper purposes, such as to target a political opponent or a business rival. 

Some Red Notices are published on INTERPOL’s website or reported on by the media. In these cases, the fact that a Red Notice has been issued (or reported) will likely be picked up by a bank’s compliance checks. This can result in serious consequences, including the refusal to open a bank account or the closure of existing accounts. 

The connection between Red Notices and de-banking means that in any case where a Red Notice might be issued for improper purposes, steps should be taken either to secure the deletion of the Red Notice or to prevent it from being issued in the first place. Our experienced INTERPOL lawyers can assist with applications of this kind. 

Conclusion
Individuals and businesses must continue to challenge inaccurate information that is published about them either in the press or online to minimise the risk of de-banking. Additional issues might arise if criminal allegations have been made. The introduction of 90 days’ notice and the promise of a clear explanation is a step in the right direction. However, de-banking remains a significant threat in an environment where decisions can be driven by flawed data, risk-averse systems, and a reputational landscape shaped by misinformation.