Upheld: unfair account closure without proper notice complaint against Bank of Scotland plc (trading as Halifax)

Decision detail

Summary

Mr F complained that Halifax unreasonably closed his account in June 2025 without notice or explanation, leaving him without funds during his driving theory test and exam period. Halifax allowed him to withdraw funds in branch but did not provide detailed reasoning for the closure. The ombudsman found that Halifax's account terms and regulations required at least two months' notice before closure, with immediate closure only permitted in limited circumstances. Halifax failed to demonstrate that immediate closure was justified or conduct reasonable inquiry into its concerns. The ombudsman upheld the complaint and ordered £250 compensation for the distress and inconvenience caused.

The Ombudsman's reasoning

While Halifax has the right to choose its customers and close accounts, the closure must be conducted in line with account terms and regulations. The account terms required at least two months' notice, with immediate closure only in limited circumstances. Halifax failed to demonstrate that immediate closure was justified, did not conduct reasonable inquiry into their concerns, and did not provide adequate explanation to Mr F. The timing of the closure during a stressful period (theory test and exams) and the lack of notice caused distress and inconvenience. Although funds were released reasonably quickly in branch, the immediate closure without proper process was unfair.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website