If a bank closes an account for a breach of terms, does it put a 'marker' on your name?

hildasmuriel
hildasmuriel Posts: 86
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edited 22 November 2023 at 8:45AM in Budgeting & bank accounts
The title sums up all I need to know - but I'll give more info below for those who like all the details 😊. If I am found to be in breach of the T&Cs of my account and it is closed (which is what is threatened), will it cause me any trouble getting other accounts in the future? Is there a Banking Naughty List that I will be added to?

Background - I have had a Chase account for about 15 months. It's not my main account but I use it for day to day spending for the cashback and also using the debit card abroad. I also have the 'top-up' feature turned on and this is where I have fallen foul. Every debit payment I make is rounded up to the nearest pound and that amount placed in my top-up account. It pays interest at 5%. In 15 months I have received a total of £8 interest .....it's pennies each month.

Yesterday I received a message through the app to say I had been misusing it because I had made lots of little payments to the same company which is not what it was intended for. 🤷‍♀️. If I carried on, they would close my account.

I messaged back to say that all the little payments were normal usage - I have recently sold a lot of stuff on Ebay (personal stuff, not a business) and was paying for the postage through Ebay...£3.29 each time. I asked for more information about what was allowed as every day usage.

All I got back was 'we have lodged this as a complaint. We will reply within 8 weeks' which doesn't answer the question! 

So now I am wondering ....well, as the title says.
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  • la531983
    la531983 Posts: 1,630
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    Surely it depends on the reason for the closure. If the bank closing the account put a lovely CIFAS marker on you, then good luck opening any account anywhere else.
  • Putting aside the question of whether or not they would be justified in closing the account, the answer to your question is - yes and no.
    As far as your credit record goes, it will show that the account has been closed.  This is all that will be visible to another bank/lender who looks at your credit record - they won't know whether it was closed by the bank due to a breach of T&Cs, or whether you simply closed it voluntarily.
    Internally, Chase may keep a record of all dealings with you as a customer.  So you may well find Chase will refuse to offer another account to you, but it will not impact your chances of opening an account elsewhere.
    Reassured by your first bit. Second bit doesn't bother me so much - if Chase close my account I would NEVER be wanting to do business with them again anyway. 😒
  • la531983 said:
    Surely it depends on the reason for the closure. If the bank closing the account put a lovely CIFAS marker on you, then good luck opening any account anywhere else.
    I had to Google this to find out what it was 😁
    If they do this to me because they thought I was finagling my money to get a few extra pennies each month, then I would have to ........ I don't really know what I'd do but it wouldn't be pretty.

    Loads of places pay 5% nowadays - it's not like it's that good an offer. I only do round-ups because it makes my accounting neat as everything is a round pound. 

    This is all so daft 🙄
  • DullGreyGuy
    DullGreyGuy Posts: 8,957
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    An agreement between different banking groups to not offer accounts to certain individuals would be illegal. 

    Chase are free to mark you as a person they don't want to deal with in the future, which can include their sister brands. 

    If you have been accused of Fraud then a CIFAS marker showing what type of fraud they are alleging could be logged but its up to other banks to make their own decision if they'd want such a customer or if extra checks are required etc. 
  • dealyboy
    dealyboy Posts: 1,674
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    My view is that Chase are treating you with somewhat more respect than other banks who simply freeze or even close accounts immediately if they suspect fraud or money laundering, or give 30 or 60 days notice if it is for 'commercial reasons', which I believe would be the case here.

    Chase have informed you of what they believe is misuse and given you the right of reply; I think they deserve some credit for this approach.

    I have Chase accounts and also accounts with NatWest and RBS which also offer round-ups. In the circumstances I would simply turn-off round-ups and inform Chase that I had done so, I would add an apology for inadvertent breach of normal use conditions, explaining what the frequent payments were.

    You might be interested to know that there have been discussions here in the past regarding the exploitation of the 'loophole' of both NatWest and RBS allowing 'double round-ups' of penny transactions to their regular savers; they are on the stricter side of banks.
  •  I understand Chase are free to close my account and not deal with me - they are a private business. My main concern was the effect on other banks, which has been covered above - thanks all.

    I will not be apologising for breaking T&Cs - because I didn't. 

    These are the bits in the T&Cs that they say I deviated from

    About the account: The round-up account will accelerate your savings on round-up payments when you're using your debit card for normal payments for everyday goods and services. 

    For millions of people in this country, shopping on EBay and paying lots of little amounts for things is everyday life - normal payment for everyday goods and services. 

    All good - thanks again for advice.
  • Olinda99
    Olinda99 Posts: 1,154
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    if it were me I would simply turn off roundups the interest you get is hardly worth all the hassle anyway!
  • Meanwhile, fraudulent individuals are moving hundreds of thousands of pounds across multiple accounts via Chase.....seems like a bit of an overreaction to your circumstances if you ask me (that;s providing you have disclosed the full details).

    I'd take my business elsewhere.
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  • la531983 said:
    Surely it depends on the reason for the closure. If the bank closing the account put a lovely CIFAS marker on you, then good luck opening any account anywhere else.
    I had to Google this to find out what it was 😁
    If they do this to me because they thought I was finagling my money to get a few extra pennies each month, then I would have to ........ I don't really know what I'd do but it wouldn't be pretty.

    Loads of places pay 5% nowadays - it's not like it's that good an offer. I only do round-ups because it makes my accounting neat as everything is a round pound. 

    This is all so daft 🙄
    So £3.29 for postage and £0.71 to another account makes your accounting neat?
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