Switch from Barclays – and you won’t starve

Ms T.F. writes: I opened my bank account with Barclays 15 years ago. I told the bank I was self employed, and that I would get large sums from the taxman as refunds for my clients. I would then deduct my fee and transfer the balance to the client. The bank told me I did not need a separate business account, and this was great for 15 years until suddenly my debit card stopped working while I was out shopping. Barclays had frozen my account.

YOU prepare business accounts for sole traders, and at the moment Barclays froze your account it held £8,000, of which half was tax refunds that you were to pass on to clients. The bank told you your branch had discretion to let you draw benefits and wages to live on, but as you are self employed, you had neither of these so you were left without cash for you and your son to live on.

Barclays told you its investigations would taken ten days, but even after this, your account was still frozen. Every time you called the bank, you were told an email would be sent to the official who froze your account, but repeated promises to call you back were broken. Finally, after three weeks without money, you broke down and cried over the phone. This time, the bank did ring you back. The speaker said he had ‘pressed a button and sorted it’. Your account was open again, but with no explanation.

The bank told me: ‘Barclays is complying with its legal and regulatory obligations. Due to the nature of these obligations, we are unable to share any further information.’ This is the standard answer banks give when they freeze an account because they suspect their customer is laundering the proceeds of crime. You are guilty until proven innocent. And yes, it is all legal. I believe Barclays has advised you to open a separate account for your business. I would add, open a separate account at a different bank. Then if one is frozen, you and your son will not starve.