Why accounts are frozen - Monzo blog

jonnygee2

Monzo has written a blog explaining the account freezing process, relevant to many threads here.

https://monzo.com/blog/2019/04/04/why-we-block-freeze-close-monzo-accounts/

I didn't actually think people in the regulated sector were allowed to write so openly about the NCA reporting process, but Monzo (in its usual rule-testing style) has gone ahead and written about it anyway.

Something to refer people to when their account has been frozen by a bank, anyway.

Uxb1

Occasionally in the High Court we get glimpses of the process when someone with a serious amount of money gets their accounts frozen and they take the bank to the cleaners.
This is one such:
http://www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWHC/QB/2018/1843.html&query=%28lloyds%29+AND+%28NCA%29

Bank freezes funds on 27 December
At 10:45 am on 28th Dec client applies for and is granted an order from the court requiring the bank to unfreeze the funds by 1pm on that day.
At 1pm bank counter applies for an extension to 3pm and is granted it.
Two hours later the bank "for reasons unconnected with the injunction" (yeah right) suddenly decide to unfreeze the all seven accounts and so the reason for the injunction having been removed the injection itself is lifted.
Bank subsequently decide this is one client they really really would rather not have to deal with and give the client 60 days notice of all accounts closure.
The case then goes on to discuss the client subsequently demanding full SAR disclosure by the bank - which the bank wanted to keep secret.
In the end the High Court judge ordered the full disclosure of the SAR as "their content was plainly relevant to the assessment of whether the Banks employees has a relevant genuine suspicion which is the key issue in the contract claim".... all of which I guess was subject to a second claim against the bank as to whether the bank was defamatory in declaring they had suspicion that some of the monies in the account were the proceeds or crime
The order was subject to a delay to give time for the NCA to get upset at what embarrassing facts were in the SAR and apply for an injunction to overrule the Court's decision.

The bank was also in hot water with the judge for saying that the client was in breach of the T&C's for using their personal account for business purposes such as to give reason for termination however unfortunately (for the bank) this use had gone on for so many years without any warnings as to be regarded by all at acceptable practice and, best of all, the bank had stated the year earlier in unrelated correspondence that the conduct of the account was entirely satisfactory---- oops.

colsten

Lonsdale v Natwest is a very interesting one, and I reckon has shaken the banks' fraud departments a bit. I.e. they'll be a little more careful before blocking people's accounts.

I am no lawyer, so might be wrong but the way I read the case is

1. Mr Lonsdale is no longer an account holder at Natwest as Natwest has served notice to close his accounts, and they were closed at the end of the notice period / as soon as Mr Lonsdale had settled his overdraft on one of the accounts
   
   
2. the Court has made no order regarding costs. Does this mean that both parties settled their own costs?
   
   
3. The Court has not awarded any damages to Mr. Lonsdale. All allegations of handling proceeds of crime have, however, been dismissed as unfounded, so his name was cleared

Any comments / answers?

Browntoa

No real surprises in the blog though, what I'd expect them to close or freeze accounts for

JuicyJesus

jonnygee2 wrote: »

I didn't actually think people in the regulated sector were allowed to write so openly about the NCA reporting process, but Monzo (in its usual rule-testing style) has gone ahead and written about it anyway

It's essentially public knowledge already. Monzo are just being blunt about it.

There's also no tipping off as there's no indication to a specific customer as to whether a report has or hasn't been made. Although it's getting a bit close to the line.

Chino

JuicyJesus wrote: »

Although it's getting a bit close to the line.

Hardly. The blog post says that if Monzo is required to freeze an account then it will freeze the account. Somewhat self-evident to most readers.

jonnygee2

Chino wrote: »

Hardly. The blog post says that if Monzo is required to freeze an account then it will freeze the account. Somewhat self-evident to most readers.

I think specifically, it's the bit about reporting to the NCA. This is the bit that's 'close to the line' because telling a specific person they are under investigation is illegal. They haven't done that, but it's not too far off.

Most people don't assume its the NCA investigating, hence many of the threads here where the OP is asking 'why isn't the bank asking for evidence', 'how can the bank know anything' etc. They commonly assume its the bank investigating their accounts.

JuicyJesus

What jonnygee2 said.

If someone came into a bank and asked "why is my account blocked" and the answer was what Monzo said regarding the FCA then it would like be considered tipping off. Addressing it to anyone who has had their account blocked or could potentially have their account blocked is borderline. I suppose if you've tipped off everybody, you've tipped off nobody...

That said, as I say, the NCA escalation process is public knowledge, e.g. here's the NCA's own factsheet about it: https://www.iab.org.uk/wp-content/uploads/2017/04/Obtaining-Consent-from-the-NCA.pdf however the state of POCA is such that mentioning that public knowledge to an individual customer in a servicing context is potentially a criminal offence.