Not upheld: Account closure without notice complaint against ALLICA BANK LIMITED
Financial Ombudsman decision DRN-5278374 of 2025-03-26T00:00:00+00:00. Account closure without notice complaint against ALLICA BANK LIMITED. Outcome: Not upheld.
Decision detail
| Reference | DRN-5278374 |
|---|---|
| Decision date | 2025-03-26T00:00:00+00:00 |
| Firm | ALLICA BANK LIMITED |
| Product | Other regulated product |
| Claim type | Account closure without notice |
| Outcome | Not upheld |
| Remedy | None. The complaint was not upheld. |
Summary
C, a company represented by director Mr A, complained that Allica Bank Limited blocked its account without notice or explanation in August 2024 and delayed releasing funds for 21 days. Mr A stated the block forced him to loan money to the company to maintain operations and criticized Allica's piecemeal approach to questioning. The ombudsman found that Allica acted within its legal and regulatory obligations as a UK bank and was entitled to block the account under the terms and conditions, with no obligation to provide reasons or advance notice. The ombudsman determined the 21-day review period was reasonable and declined to uphold the complaint or award compensation.
The Ombudsman's reasoning
The ombudsman determined that all UK banks must take certain actions to meet legal and regulatory obligations, which sometimes includes restricting accounts during reviews. The ombudsman was satisfied that Allica acted in line with its legal and regulatory obligations and was entitled to block the account under the terms and conditions. Although the block caused disruption to C's business, the ombudsman found no unfair treatment or actions outside Allica's entitlements, and the 21-day review period was reasonable.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| ALLICA BANK LIMITED, all decisions | 10 | 10% |
| Account closure without notice, all decisions | 11,650 | 19% |
| Other regulated product, all decisions | 51,105 | 30% |
Source
Read the original decision on the Financial Ombudsman Service website