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Has anyone else's Bank closed their account as soon as Coronavirus support cash was paid in?

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My daughter has a Monzo account.  She earns almost nothing and recieved a £10000 grant from Glasgow City council to support her small business.  As soon as she got it Monzo closed her account.  It took her  about 5 hours to get any response from them.  They said they would not tell her why and that they would transfer her money to her other bank account in 2 to 4 weeks.  2-4 weeks with nothing and no income!!  She has put in a complaint.  
Surely if they had spent half a second looking at her account they would have seen she wasn't doing anything dodgy.  What does this do to her credit profile and has this happened to anyone else?
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  • NedS
    NedS Posts: 4,544 Forumite
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    Was it a business account or a personal account? Clearly she is using it for business purposes (receiving a business grant), and that is against the terms and conditions of many personal accounts. Maybe that could be the reason they have closed it?
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  • D3xt3r5L4b
    D3xt3r5L4b Posts: 1,852 Forumite
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    Monzo is a personal account not a business account. 
    Why wasn’t it paid into her business account?
  • dunstonh
    dunstonh Posts: 119,785 Forumite
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    When you consider the size of the High Street banks, you would expect them to dominate the forums when it comes to threads like this.  Yet it is a handful of smaller banks that dominate these forums and various other websites. 

    common reasons for freezing and closing accounts would be:
    a) Poor money management by the customer (unauthorised borrowing for example)
    b) Suspected money laundering/fraud
    c) cross firing
    d) breaching terms and conditions (such as using a personal account for business purposes)

    If its an anti-fraud issue, then you would not expect the reason to be given as there may be further investigations taking place and they will not want to tip off.   If it was a breach of T&C then you would expect an explanation.
    If you do a google search of "monzo closing accounts" then you get many many responses. 

    The challenger banks are mostly used by Millenials (that is not a judgement comment but market reflection).  How Millenials bank is often different to how previous generations bank.   They will move money around more. it is very easy for transactions to look like cross firing for example but not actually be cross firing.          The newer, less experienced banks may not have the ability and resources that the high street banks have.     Each bank has its own internal compliance and some may decide that suspicion is enough to justify closure whilst others may put more resources into an investigation before making a decision.




    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • daveyjp
    daveyjp Posts: 13,593 Forumite
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    A friend of mine has been dealing with some of the admin of the business grants and many businesses aren't using the account registered for their business rates direct debit for the grant payment.

    I can understand why, especially if the business account is o/d and the business owner needs cash to live, but it does open up potential problems as experienced by the OP.
  • badger09
    badger09 Posts: 11,615 Forumite
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    What's 'cross firing'? 
    I suspect that in this context, dunstonh meant the practice (very common amongst many posters on here) of regularly paying money from one personal account to another, while at the same time or shortly afterwards, paying the same amount back into the original account.

    This is done in order to meet minimum funding requirements to benefit from interest/reward/access to linked savings account etc. It is not against the banks' T&Cs. There are anecdotal reports of accounts being closed because of this, but many of us have been doing it for years, with absolutely no repercussions. 
  • colsten
    colsten Posts: 17,597 Forumite
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    badger09 said:
     There are anecdotal reports of accounts being closed because of this, but many of us have been doing it for years, with absolutely no repercussions. 
    That's true, but I don't think any of us have been doing it with Monzo as there hasn't really been any good reason to involve Monzo in the cycling / daisychaining / cross-firing.


  • BrownTrout
    BrownTrout Posts: 2,298 Forumite
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    Monzo is a personal account not a business account. 
    Why wasn’t it paid into her business account?
    sorry that isnt actually true!
    Monzo do business accounts!!
  • dunstonh
    dunstonh Posts: 119,785 Forumite
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    Monzo is a personal account not a business account. 
    Why wasn’t it paid into her business account?
    sorry that isnt actually true!
    Monzo do business accounts!!
    They do a business account with charges.   it doesn't mean the OP's daughter had the business account though.  A lot of people try it on and use personal accounts for business.    Many of the high street banks will give the opportunity to switch it to business but the challenger banks tend to quicker to close accounts that breach T&C (or even potentially breach T&C).

    That's true, but I don't think any of us have been doing it with Monzo as there hasn't really been any good reason to involve Monzo in the cycling / daisychaining / cross-firing.

    Whilst they have no deal that makes deal terms qualifying necessary, there can be valid transactions for other reasons that can appear to be cross-firing (e.g. money in, money then sent to savings with another bank and then returned back again quickly later) which could be misinterpreted as cross-firing by an inexperienced bank employee.   Or potentially, the OP's daughter could actually be cross-firing in the historical sense. I know it's unlikely but it is something bank staff are told to look out for.   

    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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