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Lloyds Closed My Current Account!

Hi everyone,

It's my first time on this forum and have been pouring through the forum for help. On February 6th I received a letter from Lloyds bank stating that they are closing my account. Of course, they gave absolutely no reason as to why they are doing it. This is what the letter says:

Ref: HR/KA

We often review accounts to ensure that we can continue to support our customers with their banking needs and following a review of your account, we are writing to let you know that unfortunately, we're unable to maintain a banking relationship with you. As such, we will be closing your account in 65 calendar days from the date of this letter.

After this date we will stop all regular payments from your account and you will need to contact the people you want to pay. When your account is closed, you are responsible for cancelling any direct payments into or out of your account. If someone sends a payment to your closed account, we will take reasonable steps to return the payment to the sender.

In the event that you open other accounts during the notice period, those accounts will also be closed. Please note that this also applies to any other accounts you may open with the bank at any future point in time, where the bank reserves the right to close those accounts without further notice.
When the agreement ends and your account is closed, we will pay or transfer money we hold for you or owe you under this agreement to you, or to any other person you name in writing. Funds will be paid by cheque to the above address, unless you advise otherwise or use the account switching service when funds will be transferred electronically.

Please note that we may retain sufficient funds to cover any liabilities owed to us.

You need to make alternative banking arrangements. You may wish to use the Current Account Switch Service but please note you will not be able to transfer to other members of the Lloyds Banking Group such as Lloyds Bank plc, Bank of Scotland plc and Halifax. You should destroy any cards and unused cheques, cutting them up before disposing of them.


I'm still a bit in shock that I received this letter. Can anyone provide a bit of advice on what to do next. The letter does not say which accounts are being closed. I can only think two possible reasons why the may close the account.
1. I had 2 family friends transfer money into my account over the past year to help pay off a large debt I had with Lloyds (which has recently been paid off). They would transfer anything between £2000-£5000 each time. The funds came from their own current account.
2. All my bills come out on the first of each month. The money was never in the account which put me into arrears by about £1500 at the start of each month. I would then get a text from Lloyds saying I have until 2:30pm to add funds into my account, which I always did and then got out of the overdraft (even though the overdraft was only £100). I only failed to make payment once, but transferred the necessary funds the following day to balance it once again.

These are questions I have about it:
1. Does this mean a CIFAS will be entered under my name?
2. I have a mortgage with Halifax. Will that be in jeopardy, as Halifax is part of the Lloyds banking group.
3. I have two limited company accounts under Lloyds. Will they be in jeopardy of being closed also?
4. Should I open a new account with one of the traditional high street banks or try one of the new fintechs, such as Monzo? Any suggestions would be welcomed... Ideally I'd like to move my personal and business accounts under one bank.

Thanks everyone in advance for your help. I really appreciate it!
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Comments

  • Carrot007
    Carrot007 Posts: 4,534 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    1. Yes that can look dodgy.


    2. You purposly kept going over yout agreeed lmit. That would obviously have them considering you as a customer.


    1. Could be, why don't you check. You should be anyway unless you are a millionaire.


    2. Well not much they can do but they will not give you a re-mortgage so you will have to go elsewhere once your deal ends unless you accept standard variable rate.


    3. Not I clue but I would think so.


    4. Whomever will take you! Check all your details before doing anything.
  • I would check your credit files with the three CRAs to check for accuracy and any negative data (such as a CIFAS marker)
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    :smiley:
  • Going by your username, could there be an issue around your UK residency?
  • No issues around my residency, as I have EU citizenship also. I'm going to the bank tomorrow to ask them why they closed my account but based on what I've read, they're unlikely to tell me anything...
  • Robin9
    Robin9 Posts: 12,464 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Your branch won't be able to tell you anything.

    Lloyds have taken a simple business decision that the way you operate your account costing them too much money.

    Use the switch service and find yourself another bank - it may be that new bank will open an account and then close it again rapidly when they find out your history.
    Never pay on an estimated bill. Always read and understand your bill
  • If there is no CIFAS marker, is there any other way that my new bank would find out my previous banking history? I honestly didn't think I was doing anything wrong. I figured as long as I paid back the overdraft amount within a couple of hours, noting would come of it. To cancel an account seems rather harsh (if that even is the reason). Should I persist until they respond with some sort of answer or would that be agitating the bank?
  • Robin9
    Robin9 Posts: 12,464 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    They won't tell you.

    Move on
    Never pay on an estimated bill. Always read and understand your bill
  • DCFC79
    DCFC79 Posts: 40,611 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    I also agree you should move on from it.


    Get another bank opened elsewhere, eg Nationwide or a Fintech like Monzo.


    Regarding point 2 & 3 I would ask them to be sure but looking at what you have posted, its just the current account being closed, if the two limited company accounts were at risk they would say so, same with the mortgage, consider remortgaging when you can to put your mind at ease.
  • You should check cifas but more than likely there won’t be anything there or I would suspect they would of closed your account with immediate effect.

    However they more than likely no longer want your business in terms of a current account customer
  • jonnygee2
    jonnygee2 Posts: 2,086 Forumite
    1,000 Posts Second Anniversary Name Dropper Combo Breaker
    No issues around my residency, as I have EU citizenship also.

    Many UK banks will close your account if they believe you are no longer a UK resident. That's a question about where you live, so your citizenship doesn't make a difference.
    1. Does this mean a CIFAS will be entered under my name?

    Unlikely. Account closures like this are normally about T's and C's, rather than fraud.
    2. I have a mortgage with Halifax. Will that be in jeopardy, as Halifax is part of the Lloyds banking group.

    Not off the bat, the rules (or lack thereof) that they use to close current accounts aren't relevant to lending products.

    They will probably share information with each other though. So, for example, if it were not a buy to let mortgage and they have discovered you are living abroad, they could cancel the mortgage. But as long as you are still in the terms and conditions of your mortgage, you are okay.

    3. I have two limited company accounts under Lloyds. Will they be in jeopardy of being closed also?

    Possibly. Like your current account they can be closed for any reason. You'll have to wait to find out.
    4. Should I open a new account with one of the traditional high street banks or try one of the new fintechs, such as Monzo? Any suggestions would be welcomed... Ideally I'd like to move my personal and business accounts under one bank.

    If you aren't a UK resident, then you'll normally not be eligible for most UK current accounts and will have to look for one that's suitable for non-residents.
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