Partially upheld: unfair account closure complaint against Starling Bank Limited

Decision detail

Summary

M, a company represented by director Mr C, complained that Starling Bank Limited abruptly closed its business account following a review of a newly appointed person with significant control (Mr B). Starling provided two months' notice and later reversed the closure decision, confirming it could onboard Mr B. The ombudsman found that while Starling had the contractual right to close the account with notice, the evidence provided was insufficient to conclude the closure was fair. M also complained of age discrimination regarding Mr B's onboarding experience, which the ombudsman rejected. The ombudsman partially upheld the complaint and awarded £250 compensation for the inconvenience caused by requiring M to establish alternative banking arrangements.

The Ombudsman's reasoning

Although Starling Bank is entitled to close accounts and provided proper notice, the evidence provided was insufficient to conclude the closure was fair. Starling later confirmed it could onboard Mr B, suggesting initial concerns had fallen away. The lack of detailed justification from Starling meant the ombudsman could only see 'half a story'. While Starling is not obligated to provide specific reasons for closure, the insufficient evidence of a fair basis for the decision warranted compensation for the inconvenience caused by requiring M to find alternative banking arrangements.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website