Fraud alert closes account of six-month-old baby girl

By Bob Howard
Reporter, Money Box

image captionNatWest, part of the RBS group, said in a letter it could not explain why it was closing the account.

The bank account of a six-month-old girl has been closed following an error over a fraud alert by NatWest Bank.

James and Vanessa from Leicestershire set up a NatWest Young Savers Account for their six-month-old daughter Mariella at the beginning of November, as James told Radio 4's Money Box programme:

"We recently had her christened and from the christening received gifts from friends and family of cheques and cash."

Closure unexplained

They thought no more about it until a week later they received a letter signed NatWest Accounts Closure Team: "We have, with regret, reached the conclusion that we will no longer provide banking facilities for you. Your account will be closed in 14 days from the date of this letter.

"The bank is unwilling to enter into any further discussion with your regarding its decision. Recovery agents have been instructed to collect cards and books in your possession."

James and Vanessa were shocked and confused.

They could not understand why they were being forced to close a newly opened account for a six-month-old baby.

But James felt they had no choice other than to follow NatWest's demands: "It was just all very frightening and very threatening and we just didn't understand why."

Fraud report

When Money Box contacted NatWest to try and find out why the account had been closed, it came back with a one sentence explanation: "The customer lives at the same address with a person who committed an impersonation fraud."

James earlier this year had received letters from a phone company addressed to a man he did not know and who had never lived at his address.

He wondered if this man might have been the subject of the fraud alert.

Money Box contacted sources within the fraud prevention industry who confirmed that James and Vanessa had excellent credit records and the fraud flag was against a totally different name at that address.

It was clear that NatWest had made a serious error in forcing the closure of the account and giving James and Vanessa no opportunity at all to query it.

"We've been made to feel like criminals because somebody has tried to perform a fraud using our address," said James.

"There's got to be a mechanism in which somebody in my position can actually find out the reasons why, rather than it's just closed ."

Policy change

NatWest eventually admitted to Money Box it had made serious errors: "Unfortunately a fraud alert was raised against their residential address unbeknown to them. The letter closing their daughter's bank account should have included details of how to appeal the decision.

"We are very sorry for what has happened for this young family, and a staff member will ring them to apologise next week."

The bank also told Money Box that as a result of James and Vanessa's experience, all closure letters will now include steps customers can take to appeal against a decision. It said that it would also offer them £200.

Data concerns

This case also raises worrying questions about the rules around the use of fraud alert data. The firms that provide it to the banks say they must investigate further before using it as the sole grounds for closing an account.

Richard Hurley from the fraud prevention network CIFAS said NatWest did not appear to have followed accepted rules: "A person's address will form one part of any checking and verification procedure associated with an application or claim for a product or service.

"However, an address being matched to one associated with a previous fraud should never be the sole basis behind a decision to decline an application. In any case, where an application has been declined solely because of an address match, the organisation in question must address their processes and policies."

BBC Radio 4's Money Box is broadcast on Saturdays at 12:00 GMT and repeated on Sundays at 21:00 GMT.

HSBC shut down my company credit card without telling me some time back. Only found out when I tried to use it and it was declined.

On calling them, all I could get was they had closed the account a month earlier when they received "intelligence" that the card may become involved in fraud!

No apologies, no detail on what this potential fraud was about and took a further month to get a new card sent out and activated.

No-one at HSBC cared my had shut down my account without bothering to tell me first - got the usual comments that they had tried to contact me, but as they have home and mobile numbers, postal and email address and none of these were used, they didn't try very hard!

Nothing new in this story, I work at a different bank, but they still do what they want without recourse.

Trevor, Princes Risborough

I opened an account with Nat West was told that all was OK I placed funds to the account and set up direct debits. 6 days later I received the same " We have, with regret, reached the conclusion that we will no longer provide banking facilities for you. Your account will be closed in 14 days from the date of this letter.

"The bank is unwilling to enter into any further discussion with your regarding its decision. Recovery agents have been instructed to collect cards and books in your possession."

I was very cross as it also stated that i would need to cancel my direct Debits. I could not find out what the problem was so went to Santander and have no problems.. I am a bit concerned now as my landlord told me that the guy who lived at the address before me was bad news and owed a lot of money also we get letters through for names no one has heard of.

Luke, Torquay

I work for a high street bank and they never inform you as to why they have closed down an account, and we can never tell the customer either.

The process is not even clear to bank employees and it seems it is always an irreversible decision.

Mike, London

I opened an account for my daughter and I with NatWest at the whetstone branch in harrow. Initially i was told that because of my poor credit record they were unable to open a gold account for me and was offered a basic savings and young savers for my daughter who was just two years old at the time.

The account was opened and i was sent cheque book, paying in book and bank card. Out of the blues i got a letter from NatWest asking to return all that was sent to me that the accounts were closed.

I made several attempts to find out why by going to my local branch in Mill Hill, they were unable to tell me why. Till today no explanation from NatWest.

Sekinat, Colindale

My wife has an account with M&S together with a credit card.

In trying to register for access to the account on line, my wife was told that the information she provided conflicted with data on file. Her firm conclusion is that the data on file must be incorrect - she may even have given incorrect information originally. BUT there is no facility for checking this nor to resolve the apparent conflict.

This problem is not confined to M&S; in fact it seems quite common.

Peter, Stockton on Tees

I get about twice a year letters addressed to people who are unknown to me despite living in my house for forty years. Two years ago I had to correspond with bailiffs who wanted money from one of my unwelcome virtual residents. Fortunately Experian continue to monitor my credit rating but I don't think they monitor fraud at their clients address.

Keith, Oxon

HSBC froze my account from 25th august to 3rd Sept after an online transfer of £200 from my cousin's HBOS was erroneusly flagged as fraudulent. No one informed me ,I only found out after my card transaction were refused at the busy till at a retail outlet, much to my embarrassment. I only found out after visiting a branch the following. It took 2 weeks to rectify the error. A period which left me no access to funds to cover basic daily expenses.

During this period I made at least 20 phone calls and seven branch visits, never made any progress.

After filing a complaint, was offered a very short letter apologising and passing the buck to the door of HBOS These bankers are humans not machines , and start exercising a bit of common sense and a definitely better service for all the ridiculous bank charges.

Frances, London

This just shows the huge gap that is now between customer's and large organisations of the business world. Personal customer service has gone out the window. Surely a physical knock at the door by a person would have cleared up this mess. It is all about money and pure greed nowadays.

Ian, Isle of Wight

I work in a bank and do see applications declined for what seems no reason. Customers then come back to us, after checking with the agencies who provide our information, to say there was something registered against their address, either fraud issues or a bad credit mark from a utility company.

As there is so much rental accommodation in the area where people move in and out very quickly, often it is not the customer who is at fault but a previous tenant leaving a bad taste behind them.

Dee, South East

A few years back I inherited some money from my mother's estate. I paid it into my saving account with Barclays and for a while everything was ok.

Then one day I went to the cash point and it swallowed my card up. After a number of calls to the bank and promises of a new card I was then told that my account was being closed - I never received any correspondence about this.

I phone back to speak to some one senior and was put onto a very rude manager who said my account was closed and there was nothing I could do about it and should go to my branch to draw out the money - I was given a bankers fraud for which I had to pay.

I then wrote a very long letter of complaint and eventually had a phone call and and apology saying that someone should have enquired as to the source of the money I had deposited. They then sent me two bottles of wine by way of an apology - not must use as I don't drink!

At the time I had and account with Alliance & Leicester into which I had deposited THREE times the amount before paying over equal amounts to my siblings - without any problem!

Steve, Durham

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