Monzo, Starling and Revolut see drop in account closure complaints

The UK’s top neobanks have collectively seen a near-halving of customer complaints about bank account closures between 2022 and 2023, new figures show.

Bank account closures became a hot topic last year following the Nigel Farage banking scandal, which led to the resignation of Dame Alison Rose, NatWest Group CEO and Coutts CEO Peter Flavel.

An FCA review, carried out after the scandal, found no banks closed anyone’s accounts “primarily because of a customer’s political views” in the year to June 2023.

New data shows that in total 170 complaints were made about Monzo, Revolut and Starling account closures to the Financial Ombudsman Service between January 1 2023 and 30 November 2023, a 45 percent drop from a year earlier.

Figures for all three neobanks show falls in complaints about account closures.

Complaints about Monzo account closures were down year on year from 190 complaints to 73 complaints; Revolut down from 61 to 59; and Starling down from 57 to 38.

In the UK, Monzo has 8.7 million customers, Revolut 6.8 million customers and Starling 3.6 million customers.

The data, obtained through Freedom of Information, does not show how many complaints were upheld, nor does it break the complaints down between retail and business account complaints.

A spokesperson for Monzo said:

“Like all banks, we are occasionally required to close a small number of accounts where customers don’t comply with our T&Cs or do not meet our risk requirements, including those relating to financial crime.

 “We don’t take these decisions lightly, and any decision to close an account is in line with our terms and conditions.”

 A Starling spokesperson said:

"We understand that account closures can be frustrating; we cooperate closely with our customers to prevent this from happening and give them 90 days notice to find a new account if needed.

“We’re pleased to see the level of complaints, already low, decrease year on year despite our customer volumes increasing significantly to more than four million customer accounts during this period.”

Revolut declined to comment.

Sam Richardson, deputy editor, Which? Money, said:

“The Financial Conduct Authority reviewed whether bank customers were having their accounts closed due to their political views, and its preliminary report found no evidence of this happening.

"Far more common reasons for banks to close customers' accounts are due to inactivity or suspected fraudulent activity.

“The ability to close accounts quickly if banks suspect fraud is an important tool in the fightback against money laundering, but in other circumstances customers should be given fair notice and a proper explanation beforehand as the consequences for them can be severe."

Lead image: Photo by Timeo Buehrer