Not upheld: account closure decision and complaint handling complaint against Starling Bank Limited

Decision detail

Summary

M, a company providing legal services, complained about Starling Bank's decision to close its business account following a compliance check in August 2025. Starling had requested bank statements, personal account information, a power of attorney for a major client, and evidence of regulatory oversight. After Miss C's initial responses were deemed unsatisfactory, Starling issued notice of account closure. Following escalation to a senior complaints handler and intervention by Miss C's MP, Starling rescinded the closure and was satisfied with additional documentation provided by Miss C. The ombudsman found Starling was entitled to conduct the compliance checks and request the information, though the initial closure decision was premature. With £200 in compensation already paid by Starling, the ombudsman found no further action was warranted.

The Ombudsman's reasoning

The ombudsman accepted that Starling had the right to conduct compliance checks and close accounts if unsatisfied with responses. While the initial account closure decision was premature and complaint handling was poor initially, Starling's questions were not unreasonable. The senior complaints handler appropriately explained what information was still needed, Miss C provided the necessary documentation including a client statement, and Starling was satisfied. Although there was some lack of clarity in communications, the ombudsman found Starling was entitled to request the power of attorney and evidence regarding regulated activities. The £200 compensation already paid was deemed reasonable to address all issues including procedural unfairness and poor initial complaint handling.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website