The politician, who was a major force behind the UK's departure from the European Union, claims he has been shut out of the UK banking system, and has had an account at a "very prestigious name" closed. A news report of 2019 said Farage had an account at Coutts.

(Recasts with new detail; updates with UK Treasury reaction in fourth paragraph, and adds government reactions.)

Nigel Farage, the ex-leader of the pro-Brexit UK Independence Party, has claimed that his bank account was shut down; he cannot obtain such services in the UK, and he has not been given an explanation as to why. The controversial figure says he is thinking of quitting the country. Farage has mused that he may have been targeted because he is a Politically Exposed Person (PEP).

Today, newspapers (Daily Telegraph, Daily Mail, 2 July) carried reports saying the UK Treasury is bringing out a consultation to look into the closure of accounts of groups and people who hold controversial views. Jeremy Hunt, Chancellor of the Exchequer, aka chief UK finance minister, is said to be "deeply concerned" that overzealous lenders are shutting accounts because they disagree with customers' opinions, and has asked the City minister, Andrew Griffith, to investigate. 

The Times of London reported in 2019 that Farage was a customer of Coutts. WealthBriefing has contacted Coutts for comment. It had not received a reply at the time of going to press. Coutts is part of UK-listed NatWest, formerly the Royal Bank of Scotland.

“It would be a serious concern if financial services were being denied to those exercising the right to lawful free speech," the UK Treasury told WealthBriefing in an emailed statement. "We are already looking into this issue and have passed a law that requires the FCA to review how banks treat politically exposed persons – so we can strike the right balance between the customer’s right to free speech of and the bank’s right to manage commercial risk.”

Farage, who is also a broadcaster on GB News, said in a social media broadcast on Thursday last week that he had attempted without success to open new accounts. When referring to an account with a “very prestigious name,” he did not give its name.

“I have been with the same banking group since 1980. I’ve had my personal accounts with them since that date, and my business accounts right through the 1990s...I’m with one of the subsidiaries of this big banking group, one with a very prestigious name, but I won’t name them just yet,” he said. “I got a phone call a couple of months ago, to say ‘we are closing your accounts’, I asked why [but] no reason was given. I was told a letter would come, which would explain everything. The letter came through and simply said, we are closing your accounts, we want to finish it all by a date, which is around about now.” He said this bank had contacted him on Thursday last week to reiterate the move was a commercial decision and that he could open a personal banking account with another lender in the group. But “that doesn’t apply to the business account so frankly isn’t of much use to me,” Farage said, adding that he was considering leaving the UK.

The politician claims that his stance as a major Brexit figure – and therefore unpopular in his view with certain people in the European banking industry – was a possible factor. He also referred to claims made about him in parliament by Labour MP Chris Bryant that he received £548,573 ($697,370) from state-backed Russian media. Farage, who said he has hired lawyers about that matter, also mused that he may have been designated as a PEP, which may have caused banks to avoid taking his business. 

A Bloomberg story on the matter said Coutts did not respond to requests for comment.

Such high-profile cases of banks shutting accounts in ways that cause controversy are not new. In March 2016, Wafic Saïd, the Syrian businessman and philanthropist, contemplated taking legal action against Barclays after reports that the UK bank had blacklisted him. However, he later dropped the case after the bank apologised for the way in which it had ended the banking relationship, and it clarified the basis for its decision (source: Carter-Ruck.com).

In May 2016 the Financial Conduct Authority issued a report about the work being done by banks and other financial organisations to reduce risks, and the possible impact this will have on certain groups of people.

Media reports said the UK Treasury may possibly recommend a more rigid notice period if banks and other lenders want to close a customer's account, as well as providing deeper justification via more information and evidence for such a move.

Treasury action, legal changes to come
The Treasury, responding to concerns about such issues, has specifically taken measures in last week’s Financial Services & Markets 2023 Act to reform the Politically Exempt Persons regime:

To require the Treasury, no later than twelve months of Royal Assent, to put the distinction between domestic and non-domestic PEPs, that already exists in the FCA guidance, on a statutory footing by amending the Money Laundering Regulations. This puts the lower-risk status of domestic PEPs into law, but also mean that the extent of enhanced due diligence measures to be applied to domestic PEPs, in the absence of other high risk factors, must be less than those applied to a non-domestic PEP.

Responding to this news service's request for comment, the FCA declined to remark on the Farage case.

With the FCA, there is, this publication understands, no obligation on firms to notify it if they have decided to close a bank account as a result of being unable to complete satisfactory due diligence, or if they have found evidence of suspicious activity. Anyone who has been treated as a PEP and thinks this is unfair can complain to the Financial Ombudsman Service.

According to industry guidance, a firm should not close a customer’s account without giving them at least 30 days’ notice, unless there are exceptional circumstances. For example, this might include a legal obligation to close the account, such as financial crime concerns, or threatening or abusive behaviour. Firms should not close an account or threaten to do so in response to a non-vexatious customer complaint.

If a person who is a PEP is no longer entrusted with a prominent public function - a key determinant of PEP status - that person should continue to be subject to risk-based enhanced due diligence for a period of at least 12 months after the date that "public function" role ceased.