LBG closing all my accounts on 18th May

Bridlington1

Ed-1 said:

Bridlington1 said:

Ed-1 said:

Bridlington1 said:

I've finally got round to reading through the LBG DSARs. By the looks of things LBG are closing my accounts on 19th May and not the 18th, which is a rather pleasant surprise. I can now get 1 extra day's worth of interest on the regular savers, which by my calculations leaves me about 17p better off than I thought I was going to be. At least that's something I suppose. 

What do the notes say?

From the Halifax and BOS DSAR:

Lloyds follows suit.

Did all accounts close as expected?

Thanks for asking. The answer is some of them did. The Lloyds current accounts closed on 19th as expected, the rest closed overnight last night. The only exceptions being a few Halifax EA savings accounts that had been leftover from my previous regular savers (all with nil balances), for some reason they're still hanging around, but I suspect they'll close tonight.

Bridlington1

Now that I'm no longer a Lloyds or BOS customer and soon to be an ex-Halifax customer too, I would just like to take the opportunity to thank all those who have taken the time to post in this thread. Your wise words and sound advice have been invaluable to me and have certainly made me reassess how aggressively I push the banks's various offers, particularly when it comes to switching and opening lots of accounts in a short timeframe.

I hope you've all found at least some use in this thread and I wish you all many profitable years to come, but remember don't take the mickey as it doesn't always end all that well.

gwapenut

It's been a very interesting thread and given me for for thought. Thank you for initiating it in such a constructive manner

easysteve589

This has been the most useful MSE thread I’ve ever read. I also got the news over Christmas that my relationship with the bank was being ended and all accounts closed. 

Like others have said, the account closure team cannot be reached by phone (even via the call centre) and both the call centre and branch staff have no knowledge of the reasons for the closure, nor will they be given any which I assume is by design from the bank.

I visited the branch and based on the advice here I said I’d been sent to complete an appeal form. They found the correct process to follow and then advised all they can do is email the account closure team with the info requested in the process. That mainly consisted of a written list of all sort code, account number and credit card numbers in question. I was asked to provide the summary of how I use each of the accounts and to explain any regular large credits.

The whole process took only around 30 minutes, which was surprising given a number of people here that said they had been in the branch for hours.

They weren’t able to give an exact timescale for a decision, but advised they would call me back within the next few working days hopefully.

Will update here when I know more if it’s useful to others. I certainly got a lot from reading this entire thread. 

eskbanker

easysteve589 said:

I was asked to provide the summary of how I use each of the accounts and to explain any regular large credits.

Are you able and willing to share a summary of the accounts and their use on here, to assist others with understanding what might be considered inappropriate by LBG?

easysteve589

I’ve been with LBG for over 10 years, holding my main bank account and joint account with them, along with a credit card and several savings accounts.

My strong suspicion for the account closing is that I made a number of large transactions recently which were not liked by the fraud team. 

Long story short. I had my mortgage with Halifax and opted to sell the house when the market was high and stay with family until it cooled.

I transferred the proceeds of the house sale to a number of newly setup external savings accounts (as the interest rates were much better than LBG). The reason for transferring to more than one was the FSCS protection limit.

I then decided recently to transfer the funds from these accounts to a parent. This resulted in 3 large transactions coming back into my BOS current account (as it was the selected source account for each savings provider) and then transferring out to a Halifax account which my parent holds in their name.

These transactions all happened within the space of a few days and to circumvent the £25k payment limit I moved the money between the LBG current and savings accounts which I hold and transferred externally that way.

I didn’t believe there was anything wrong with this and I still don’t believe there is. However, I suspect it would have flagged to the bank and may be the reason why I was looked into.

On reflection, I wish I had gone into the bank and made a CHAPS payment to avoid what may have looked like large amounts of credits being moved around from nowhere.

Frustratingly, and assuming above reasoning is well based, I can easily demonstrate the source of all funds as the mortgage was with LBG. 

Also expect I wouldn’t have faced this issue if I chose to keep my savings with LBG in-house.

I used to work for the bank a number of years ago and, at the time, all staff members in their dealings with customers have the ability to raise a suspicious activity/suspected money laundering form. It can be submitted for any reason whatsoever, for example, if a caller states they aren’t currently working but have credits coming into the account.

My recommendation would be don’t attempt to circumvent the daily transfer limits, even if it’s within your ability due to having multiple accounts, when you want to make a large transfer. 

I’m very much hoping LBG will take me back as a customer but I’m prepared to move everything away should the appeal be unsuccessful. The main frustration is the “banned for life” scenario and whether that’s actually the case. Particularly as I’ll be back in the market for a mortgage soon and LBG have some of the best rates.

I did have a few questions if anyone could help. 

1) If my mortgage was currently still in place and they ended my banking relationship, would this have been affected?

2) Is a future mortgage likely to be off the table altogether now?

3) I hold my two oldest bank accounts and oldest credit card with LBG, over 15 years. While I have access to others, in terms of my credit file, this will drastically reduce my average account age and will also increase my credit usage % due to the sudden reduction in available credit. I know it’s complicated but is there a likely impact I can expect to see to both my score and how long that may remain an issue?

Lastly, I’m still deciding whether it’s worthwhile making a complaint to the Ombudsman. After looking at their website, they helpfully publish anonymous complaint scenarios and outcomes. The types discusssed on this thread come up repeatedly and they almost always side with the bank. Given that LBG can legally close any account without reason (including to the Ombudsman as part of a complaint) so long as they offer 2 months notice, means it’s a pointless effort most likely.

Bridlington1

First of all @easysteve589 I'm sorry to hear you've also received a lifetime ban from LBG and am glad that you've found this thread useful.

I hope LBG do decide to overturn your lifetime ban but to be honest, I would be surprised if they did from what I've seen. In addition to my LBG and Barclays bans mentioned in this thread I've since been banned from Metro and I've been unable to get any of these 3 lifetime bans overturned if this is anything to go by.

easysteve589 said:

My strong suspicion for the account closing is that I made a number of large transactions recently which were not liked by the fraud team. 

Long story short. I had my mortgage with Halifax and opted to sell the house when the market was high and stay with family until it cooled.

I transferred the proceeds of the house sale to a number of newly setup external savings accounts (as the interest rates were much better than LBG). The reason for transferring to more than one was the FSCS protection limit.

I then decided recently to transfer the funds from these accounts to a parent. This resulted in 3 large transactions coming back into my BOS current account (as it was the selected source account for each savings provider) and then transferring out to a Halifax account which my parent holds in their name.

These transactions all happened within the space of a few days and to circumvent the £25k payment limit I moved the money between the LBG current and savings accounts which I hold and transferred externally that way.

I didn’t believe there was anything wrong with this and I still don’t believe there is. However, I suspect it would have flagged to the bank and may be the reason why I was looked into.

I do wonder if the large transactions could've possibly been a contributing factor. I'm still doubtful that it could've been the only reason for the closures as by that logic pretty much everyone who sells a property, receives inheritance or wins the lottery would be in danger of receiving lifetime bans but it could possibly have been taken into consideration if it was deemed "unusual activity".

Did LBG contact you about the transactions at the time? Also how long was it between moving the money to the savings accounts initially and then moving the money to your parent's account? 

If it's of any use I received a lifetime ban from Metro in August and I had only ever held one current account with them (opened in January 2023). My only activity on the account was to order a chequebook, switch one of my LBG accounts to them and to bounce several 3, 4 and the occasional 5 figure sums through it as it was used as one of my main nominated accounts for savings accounts since my LBG ban.

Out of my Metro account activity I'd be astonished if ordering a chequebook could cause a lifetime ban and they seem to be quite in favour of people switching to them so I rule out that as being a contributing factor, which by process of elimination would leave the account's transactions and fairly large number of payees as the only remaining factor. Even then though I put some of this down to my student status as I can't imagine the banks would like the look of a student who chases the best rates on a regular basis and I never had so much as a blocked payment with Metro. It's quite concerning in some ways as I use Santander, Ulster, Nationwide and TSB in a similar way as I used Metro so these accounts could possibly be at risk of closure?

easysteve589 said:

I’m very much hoping LBG will take me back as a customer but I’m prepared to move everything away should the appeal be unsuccessful. The main frustration is the “banned for life” scenario and whether that’s actually the case. Particularly as I’ll be back in the market for a mortgage soon and LBG have some of the best rates.

I can certainly sympathise with your frustration, I'm now unable to get hold of LBG's regular savers, the reward accounts, the recent Barclays switching offer and Metro's 5.22% EA account as well as and future switching offers I would've been eligible for so these bans will likely prove to be costly over the years.

easysteve589 said:

I did have a few questions if anyone could help. 

1) If my mortgage was currently still in place and they ended my banking relationship, would this have been affected?

2) Is a future mortgage likely to be off the table altogether now?

3) I hold my two oldest bank accounts and oldest credit card with LBG, over 15 years. While I have access to others, in terms of my credit file, this will drastically reduce my average account age and will also increase my credit usage % due to the sudden reduction in available credit. I know it’s complicated but is there a likely impact I can expect to see to both my score and how long that may remain an issue?

I don't know about question 1 but for question 2 I think a future mortgage with LBG is very much off the table now unfortunately, as would any other Lloyds, Halifax or BOS product for that matter. Having said that the Scottish Widows internet saver I referenced briefly in this thread is still alive and well and has been unaffected so it may be possible to open the occasional product outside of the main 3 LBG banks but I imagine they'd eventually get closed in time.

3) First of all I'd say forget about your credit score, it's just a number that lenders don't see. As for your credit file again I'm no expert but as far as I know the loss of your oldest accounts will have an impact on your credit reports but it shouldn't be too drastic so long as everything else is in order. Missed payments, defaults, bankruptcies etc are the ones that would have a significantly greater impact on your reports than how old your oldest account is.

easysteve589 said:

Lastly, I’m still deciding whether it’s worthwhile making a complaint to the Ombudsman. After looking at their website, they helpfully publish anonymous complaint scenarios and outcomes. The types discussed on this thread come up repeatedly and they almost always side with the bank. Given that LBG can legally close any account without reason (including to the Ombudsman as part of a complaint) so long as they offer 2 months notice, means it’s a pointless effort most likely.

I wouldn't bother taking it to the FOS if I were you, it will most likely go the same way as the other FOS cases and just become a waste of time.

If it's any use to you I took the issue of my Barclays ban plus default to the FOS shortly after I last posted in this thread and in the end Barclays offered me £100 on the grounds that a 60 day notice period could've been issued before closing my accounts rather than the immediate closure and eventually removed the default. Nothing was given to me for the closure itself, just for the lack of notice of the closure.

This case never went as far as being looked at by an ombudsman though as the matter was settled at the case handlers stage so whether the outcome would've been any different if it had gone further I don't know for certain but I suspect the ban would've remained. For further details see:
https://forums.moneysavingexpert.com/discussion/comment/80226861/#Comment_80226861

I'd say your best bet now would be to move start moving everything away from LBG and try to make the best of it. It's frustrating and certainly not a pleasant thing to happen to you but it is what it is I'm afraid.

easysteve589

@Bridlington1 sorry to hear about the Metro account also. Do you think this is connected to original LBG issues? I’m really concerned that I’m going to have issues going forward with other banks. I’ve ordered copies of all statutory credit reports and completed SAR’s. I’m just crossing everything that nothing is added to my report i.e. CIFAS marker that would encourage other banks to close my accounts or decline me in future. Any idea how long that is likely yo show up on my file since LBG’s first letter to me?

It was about 9 months between me transferring mortgage funds out to savings accounts in my name and then transferring them back and then on to my parents account. I can only imagine LBG may just see those latter transfers as coming from an external account and they have no ability/or desire to understand the source of the funds and track the money. It’s all the same funds and I’m not introducing new money.

Meant to say, as MBNA are also owned by LBG, I’m actually losing access to two credit cards and about 50% of all my available credit. I’ve just today increased the credit limits on my other cards to dampen the effect of my credit utilisation being higher.

I’ll update with the outcome of the appeal, but I think you’re right. The decision is likely to remain and any complaint will be fruitless.

I’m guessing you will also have seen the news articles from mid-2023 about the plans to enforce banks to offer a 90 day notice period to close accounts and also the requirement for them to provide a reason. I hope this comes into play and should any issues occur with your other existing current accounts that it’s able to give you some understanding as to the banks reasoning.

Bridlington1

easysteve589 said:

@Bridlington1 sorry to hear about the Metro account also. Do you think this is connected to original LBG issues? I’m really concerned that I’m going to have issues going forward with other banks. I’ve ordered copies of all statutory credit reports and completed SAR’s. I’m just crossing everything that nothing is added to my report i.e. CIFAS marker that would encourage other banks to close my accounts or decline me in future. Any idea how long that is likely yo show up on my file since LBG’s first letter to me?

It was about 9 months between me transferring mortgage funds out to savings accounts in my name and then transferring them back and then on to my parents account. I can only imagine LBG may just see those latter transfers as coming from an external account and they have no ability/or desire to understand the source of the funds and track the money. It’s all the same funds and I’m not introducing new money.

Meant to say, as MBNA are also owned by LBG, I’m actually losing access to two credit cards and about 50% of all my available credit. I’ve just today increased the credit limits on my other cards to dampen the effect of my credit utilisation being higher.

I’ll update with the outcome of the appeal, but I think you’re right. The decision is likely to remain and any complaint will be fruitless.

I’m guessing you will also have seen the news articles from mid-2023 about the plans to enforce banks to offer a 90 day notice period to close accounts and also the requirement for them to provide a reason. I hope this comes into play and should any issues occur with your other existing current accounts that it’s able to give you some understanding as to the banks reasoning.

I don't think my Metro lifetime ban is related to my LBG or Barclays issues. With LBG I'd say this was most likely caused by my having taken the Michael a bit by going to excessive lengths to get money out of them including opening several current/savings accounts solely for the YG finance points, switching out multiple short lived accounts (often within weeks of opening), on one occasion switching one current account into Lloyds and another account out of Lloyds simultaneously, not to mention stoozing a £50 0% OD as well as a couple of larger 0% ODs, benefitting a great deal from their various reward accounts and also breaking their Ts&Cs through using the "renew, close and reopen at a higher rate" method with their regular savers on multiple occasions. Essentially I'd gone too far too fast considering the bulk of this took place during 2022 and early 2023. 

With Barclays my suspicion is that they had banned me because I had broken their Ts&Cs by having both a Barclays and a TSB student account open simultaneously for a brief period on the day I opened the account. I thought it a bit harsh though considering I was initially told I could open a Barclays student account and then switch my TSB account into it and then told in branch that I could open the Barclays account and as long as I closed the TSB one shortly afterwards that it would be fine, but it is what it is.

Metro is different though as I never broke their Ts&Cs and I never opened a second account for switching purposes or anything so it seems much less clear cut than the other two cases. I've done a DSAR on CIFAS after the Metro ban and the results were the same as when I did the DSAR after my LBG ban, one search, though not from Al Rayan this time, and no markers or anything. I'm still slightly puzzled as to what exactly could've annoyed them though.

As for your credit reports all that lenders would see is that your LBG accounts were closed on whatever date, they don't see the reason why your accounts were closed or even whether it was you or LBG who closed the accounts so I wouldn't worry too much about that.

I appreciate my circumstances will be very different to yours in the sense that I didn't have much available credit with LBG at the time I got the ban and had the incorrect Barclays default and a still very thin credit file to muddy the waters a bit, but if it's anything to go by despite my 3 lifetime bans I now have more credit available to me than ever before, including being offered and accepting a few credit limit increases during the second half of 2023 so it doesn't seem to have had much of an impact so far, I'm just going to be limited in terms of which lenders I can use if I wanted to take out further credit in the future.

Have you actually received letters from MBNA yet though? The reason I ask is that despite Scottish Widows being a part of LBG and having an account with them since 2022, I've still been able to use them as normal post LBG ban, so I'm wondering if in practice the lifetime bans only apply to Lloyds, Halifax and BOS and not the entirety of LBG or whether my case was an oversight and I will eventually see my SWs account closed in time. If its the former then you may get to keep your MBNA credit cards after all though only time will tell.

I don't think the 90 day notice period would make too much of a difference over the 60 day notice, but I'd agree it would be nice to know what exactly caused my lifetime bans. I think it's pretty clear why LBG decided to ban me but I'd be intrigued to know exactly why Metro wanted to get rid of me.

lopsyfa

easysteve589 said:

I did have a few questions if anyone could help. 

1) If my mortgage was currently still in place and they ended my banking relationship, would this have been affected?

2) Is a future mortgage likely to be off the table altogether now?

3) I hold my two oldest bank accounts and oldest credit card with LBG, over 15 years. While I have access to others, in terms of my credit file, this will drastically reduce my average account age and will also increase my credit usage % due to the sudden reduction in available credit. I know it’s complicated but is there a likely impact I can expect to see to both my score and how long that may remain an issue?

Lastly, I’m still deciding whether it’s worthwhile making a complaint to the Ombudsman. After looking at their website, they helpfully publish anonymous complaint scenarios and outcomes. The types discusssed on this thread come up repeatedly and they almost always side with the bank. Given that LBG can legally close any account without reason (including to the Ombudsman as part of a complaint) so long as they offer 2 months notice, means it’s a pointless effort most likely.

With respect to question 1, the mortgage won't have been affected. I also received a lifetime ban from LBG but managed to get them to cancel it. You can probably see my thread concerning this if you browse my profile. At the time, I had my mortgage with halifax, current accounts and credit cards with halifax, mbna and lloyds were all going to be closed but the mortgage was left alone. 

I was asked to go to a local branch of Lloyds to meet a manager and was able to explain how I used the account. In my own case, I think my account was closed due to contributions myself and a few friends does where we contribute £500 each month and take turns to collect it (this was the main focus of the "interview"). This together with me cycling money between my current accounts to meet the minimum pay in requirements are probably the cause of the ban.

At the time I was a bit disappointed with the hassle and elected to transfer away all my current accounts from LBG and close the mbna credit cards but I am back with them now - I left the lloyds credit cards as they were my most longstanding cards. I am glad to avoid the lifetime ban as I now enjoy the free disneyplus benefit from lloyds, £5 from halifax rewards and the 6.25% regular saver.

With respect to 3, your "credit score" will likely be affected but it depends on whether you have other longstanding cards/accounts. It will affect your "credit rating" more if you next oldest card is 1 year old compared to if it is 8 years old. Even then the effect shouldn't be too much for a good credit record.

In my opinion, it is not worth making a complaint about the closure.

I wish you good luck with your review from the fraud team.