A hospice patient was left with no access to his money after his bank froze his account because of a £250 debt he was too ill to pay.
The wedding photographer, who does not want to be named, was unable to fulfil a contract after collapsing with an undiagnosed brain tumour.
The newlyweds demanded the return of their £250 deposit while he was receiving end-of-life care in a hospice. They then reported his NatWest account as fraudulent and it was suspended by the bank under anti-money-laundering rules.
The photographer discovered his funds were blocked when he tried to buy a song from iTunes to be played at his funeral.
His ordeal has ramifications for all bank customers as it highlights how someone can be cut off from their money at the behest of an individual without being given the chance to contest the complaint.
Banks usually suspend accounts if large or unusual transactions cause them to suspect fraud or money laundering. Debtors ordinarily have to obtain a court order or a chargeback to claim money owed.
However, banks are free to freeze funds for unlimited periods without warning or explanation if they have any concerns and there is no minimum standard of evidence required by financial regulations.
The photographer’s wife said the wedding couple had been informed of the photographer’s sudden illness, but demanded immediate payment.
“I explained how distraught we were and begged for some breathing space while we were at the hospice,” she said. “The next day, my husband’s account was frozen and when we called NatWest we were told the bride had reported him as a scammer.
“He’s banked with NatWest for 52 years and this drastic action was taken without contacting him for an explanation.”
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NatWest staff promised several same-day callbacks that never happened, according to the family. The account was reinstated four days later after multiple phone calls from the hospice bedside. By then the £250 had been repaid.
“The stress had a serious effect on his condition as he couldn’t eat or sleep,” said his wife. “He had just sold his car to help pay bills now that his income has stopped and the buyer couldn’t process the payment.”
NatWest said: “When we are alerted by another bank to a possible fraudulent transaction, we are under an obligation to protect customers. Once we fully understood all the circumstances we removed the block from the account.”
It has since issued an apology to the photographer, who remains in a hospice receiving end-of-life care, and a £150 goodwill payment.
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The Financial Conduct Authority, which regulates the financial sector, said that banks must ensure that vulnerable customers are treated fairly.
A spokesperson said: “If a firm considers it is necessary to freeze an account because of financial crime concerns, we expect any investigation to be carried out as quickly as possible and for customers not to be denied access to their money unnecessarily.”
Complaints from customers whose accounts are frozen without warning are on the rise, according to the complaints website, Resolver. Last year it was contacted by 1,000 customers denied access to their money for up to six months.
Banks face punitive fines if they are found to have allowed accounts to be used for money laundering or terrorist funding, but Resolver found that payments as small as £40 have triggered a block.
Customers whose accounts are frozen can complain to the Financial Ombudsman Service which can investigate whether a bank acted within the rules, but it has no powers to force the reinstatement of an account or demand an explanation for suspension.
The consumer group, Fairer Finance, is calling for an overhaul of regulations to prevent innocent customers being treated as criminals. “In theory, banks have the right to close accounts whenever they want because it’s baked into their terms and conditions,” said its managing director, James Daley.
“A change in the rules is needed. Banks should only be able to freeze accounts when there is evidence of fraud or another clear breach of the terms.”