Not upheld: account blocking without explanation; lack of transparency complaint against Starling Bank Limited

Decision detail

Summary

A limited company (A) complained that Starling Bank Limited blocked its business account without notice or proper explanation in August 2025 during a compliance review. The account remained blocked for over six months, causing severe financial impact on A's business operations. Mr A, the company director, argued the lack of transparency was unfair and prevented him from defending himself. The ombudsman found that Starling acted in line with its legal and regulatory obligations regarding financial crime prevention and customer protection, that account restrictions during reviews are standard practice, and that banks are not obliged to disclose specific reasons for such actions. The complaint was not upheld and no compensation was ordered.

The Ombudsman's reasoning

The ombudsman found that Starling had extensive legal and regulatory responsibilities regarding account reviews to protect customers from financial harm and prevent financial crime. Account restrictions during reviews are common practice and permitted under the account terms and conditions. While acknowledging the extended blocking period and lack of communication caused frustration, the ombudsman determined that Starling was not obliged to disclose specific reasons for the block and that maintaining confidentiality of sensitive information was appropriate under FOS rules. No legal requirement exists for banks to release funds within a specific timeframe or to provide explicit reasons for account restrictions.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website