ICYMI: UK Implements New “Debanking” Protections

In April this year, new UK rules governing bank account closures came into force, mandating that banks and other payment service providers (PSPs) give customers a clear justification and 90 days’ notice before closing certain payment accounts.

The new rules, created through legislation in 2025, trace back to a dispute between conservative political figure Nigel Farage and NatWest. In 2023, Farage accused NatWest subsidiary Coutts of closing his accounts because of his political views, a practice which has come to be known as “debanking.” That scandal ultimately led to NatWest CEO Alison Rose’s departure. An independent review concluded that the bank’s communication regarding the closure was inadequate, and the dispute was reportedly settled in March 2025.

Beyond extending the notice period from two months to 90 days, the new rules require PSPs to provide a clear, comprehensive rationale for the closure so clients fully understand the decision. PSPs must also advise customers how they can complain, including any rights to escalate to the Financial Ombudsman Service. The requirements apply to framework contracts for payment services entered into on or after April 28, 2026, applying to current accounts, select credit and charge cards, and certain deposit accounts that allow for payments.

Exceptions permit termination without notice where required for anti-money laundering or immigration compliance, or where the PSP has reasonable grounds to suspect the account is tied to severe criminal activity. Immediate written notice is permitted where a customer's conduct toward the PSP’s staff amounts to harassment, or where the customer provided incorrect information when opening the account that would have prevented the contract from being agreed.