The Daily Telegraph - Saturday - Money
Souvenir rug leaves couple with no card
Two Barclaycard customers of 27 years found their accounts were closed without notice during a trip to Iran. By Adam Williams
It was supposed to be a dream trip to the Middle East but it ended with a couple’s financial life turned upside down. Buried deep in their terms and conditions, banks and card providers have the power to freeze accounts with no notice and without providing any justification to customers.
Brigitte and David Birch were left in financial turmoil after Barclaycard closed down their long-standing personal and business accounts.
The card company said it was “no longer comfortable” providing a credit facility to the couple, who had held accounts for 27 years and had an unblemished credit record.
Mrs Birch described the situation as an “Orwellian nightmare” as the couple were given no right of appeal and no warning that their accounts had been under investigation.
The Financial Ombudsman Service does not publish official data on such closures, but it is understood that hundreds of complaints are made each year. Given that many account closures go unchallenged, the number of people affected is likely to be much higher.
The Birches es believe they may have fallen foul oul of Barclaycard’s internal rules s when they used their credit card to o buy a Persian rug during a cultural ural tour of Iran.
When they y returned home from their trip ip they found multiple ple letters from Barclaycard stating that their two o business accounts ounts and two personal sonal accounts had been blocked with h immediate effect and would be closed entirely in 60 days. This happened despite the couple being told by the card company that they did not need to notify it of any foreign trips.
It was only after the intervention of Telegraph Money that the couple had their accounts reinstated, received an apology from the firm and were paid compensation. However, Barclaycard still refuses to say how or why the Birches’ accounts had been singled out for closure.
The couple run a ceramics studio and property management business in Wimbledon, London. Knowing that Britain and other Western countries have a fractious relationship with Iran, they called Barclaycard before the trip to inform it that they would be visiting the country. However, a recorded message said customers did not need to do so. In Iran they successfully used one of their Barclaycards Barclayc to buy an £800 Persian rug. It was only on their return ret to the UK that they discovered d that every account acco held in their names was t to be closed. ““It It is outrageous that Barcla Barclaycard does not hav have to explain its modus mod operandi: it do doesn’t need to tell yo you what has gone w wrong or led to th this decision,” said M Mrs Birch. “That is f fundamentally wrong and has caused huge disruption to our business.” She called the situation “farcical”.
After Telegraph Money contacted the card company it reinstated all of the closed accounts and paid £750 as a gesture of goodwill for the distress caused.
However, the firm has still not confirmed to the couple how they fell foul of its rules, leaving Mrs Birch fearful of a similar incident in future.
“Even with the length of time we have been customers, nobody can give us an explanation of what went wrong. Nobody will just say, ‘we were concerned about a transaction you made’,” she said.
“It is totally wrong that companies can do this with no justification. Banks are a law unto themselves.”
James Daley, of consumer pressure group Fairer Finance, said banks had a responsibility to explain their reasoning to customers.
“Banks shouldn’t be able to just close accounts down,” he said.
“At the very least customers are owed a clear explanation, not just being directed to a clause in the terms and conditions that says the bank can do what it wants. It doesn’t feel like customers are adequately protected.”
A Barclaycard spokesman said: “We have reviewed the case for Mr and Mrs Birch and overturned the decision to close their personal and corporate Barclaycard accounts.
“We apologised for the distress and inconvenience caused and extended a gesture of goodwill to the Birches, which they have accepted.”
Barclaycard said it had launched a review into its processes and encouraged any customers to contact it directly if they had concerns about using their card abroad.
Customers who are dissatisfied with their bank or card provider can complain to the Financial Ombudsman Service free of charge.
Customers are leaving Britain’s largest advised investment platform as it struggles to overcome problems caused by a mass transfer of accounts.
A number of private investors have said they still cannot gain access to their savings since fund shop Cofunds was incorporated into Aegon in early May. Others are facing long delays in withdrawing funds and some have completely lost track of large sums.
Telegraph Money reader Roy Wilshaw said an investment account containing more than £400,000 had gone missing following the May transfer and he had not seen it since.
“When they did the transfer it disappeared from view,” he said. “You do wonder whether they’ve just lost it. I just want the comfort of being able to see it.”
Clients are voting with their feet. John Blair, 74, and Paul Zdanowski, 68, are moving to a rival fund shop.
Mr Blair said: “I’ve had an Isa with Cofunds since 1999, but the level of incompetence I have experienced has forced me to leave.”
Mr Zdanowski, a former independent financial adviser, said: “I’ve just had enough. The transfer has been abysmal.”
Aegon has accepted that its service has fallen short of what is expected. A spokesman said: “We’re sorry for any inconvenience. We have increased resource in our contact centre and operations team and have a plan in place to improve service.”
‘It is outrageous that Barclaycard does not have to explain its