Every week, the Money blog team answers a reader’s financial problem or consumer dispute – you can email yours to [email protected]. Today’s is…
My 16-year-old son’s bank account has been scheduled to be closed by Halifax within the next 60 days or so and they won’t tell him or us as parents exactly what he’s done for that decision to be taken. All we got from them over the phone and in a letter is that their fraud team has investigated and concluded that he hasn’t used his account in line with the bank’s terms and conditions.
My concern is what effect this account closure might have on his future financial credibility and also what it might do to his credit records when all he did was ask for his bank’s help in getting what he paid for.
Benjamin
Money live reporter Jess Sharp answers this one…
Thanks for getting in touch, Benjamin. This has been a tricky one to tackle since Halifax maintains that your son’s account has been used in a way that breaches its terms and conditions.
You told me that you heard a consultant over the phone refer to two or three online transactions that your son had disputed with the bank due to issues with orders failing to arrive.
While the bank wouldn’t tell me specifically what its concerns were, it said that, based on the way your son had been using his account, it was no longer able to offer it to him.
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“We do appreciate the experience has given his father cause for concern. However, having reviewed the case again, we are maintaining our decision to give notice to close the account,” a Halifax spokesperson told me.
“When an account is triggered for a review, we look at things like account activity, any claims or disputes, amongst other things that may be considered out of line with usual activity.
“It’s important accounts are used in line with terms and conditions and all banks regularly review accounts to make sure they’re being used safely and appropriately.”
I had a look at Halifax’s terms and conditions, which state it can close accounts if it reasonably believes that:
If Halifax wants to end the agreement for any other reason, it must tell you at least two months in advance.
You told me the bank said there was “suspicion of fraud”, which got you worried, and you told your son to make a data subject access request (DSAR) to get more details.
A DSAR allows anyone to access information about the personal data an organisation holds about them.
When I first got in touch with Halifax, it said it hadn’t received such a request.
A representative of the bank later sent your son an email about the complaint we had raised and told him they had arranged for a DSAR to be completed.
Your son said the data he received had no information on why his account was closed.
While you were concerned about the possibility of fraud, you said you were also worried about the impact having a bank account closed would have on your son.
I spoke to Jenny Ross, Money editor at consumer champion Which?, who said it could have an impact if the bank had applied what’s called a “CIFAS marker” to his record.
“If your bank deems that there has been fraudulent activity on your account, the repercussions may go beyond the immediate inconvenience of losing access to your account,” she said.
“Banks can record a marker on the CIFAS National Fraud Database which identifies you as a suspected fraudster to all member firms, which includes hundreds of banks, credit providers, insurers and telecoms firms.”
Markers can be applied for several reasons, including suspicious activity, fraudulent behaviour or for using fake or misleading documents.
Having a marker can make it harder to open a bank account, apply for credit or take out insurance policies.
The markers don’t stay on your record forever, but they can last for up to six years.
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Halifax is not obliged to tell your son if it has registered a marker in his name, which means he might not discover it until being rejected for other accounts or forms of credit, which would damage his credit score in the process, according to Ross.
“While it’s rare for CIFAS markers to be applied incorrectly, it can happen – and finding out isn’t always straightforward,” she said.
Your son can find out if there is a CIFAS marker against him before being rejected by any other banks by submitting a DSAR to CIFAS, which can be done fairly simply through an online form here.
If you find a marker has been applied, make a formal complaint to Halifax.
You should ask for clarification, supporting evidence and an explanation of the bank’s decision, and if you still feel it has been applied unfairly, present the bank with evidence to refute its claims. Banks usually have up to eight weeks to resolve a complaint.
Halifax told me that it would consider any new information should your son have anything further to share.
“He remains able to appeal our decision directly and we can also help him switch to another provider, using the Current Account Switch Service,” it added.
If you’re not satisfied with their response, Ross said to take the case to the Financial Ombudsman Service.
You typically have six months after getting the business’s decision to take a complaint to the ombudsman.
Since your son is under the age of 18, you can launch the complaint on his behalf but you must show that you hold parental responsibility for him.
You can launch the complaint using this online form.
