Barclays debanked our tennis club - £120 compensation isn't enough: CRANE ON THE CASE

I’m a keen lawn tennis player and the treasurer of my local club. In summer 2023, the club was contacted by Barclays as it said we needed to go through some ‘know your customer’ security checks.

This proved a challenge, as Barclays asked us for information that wasn’t relevant to us, such as our Companies House details which we don’t have as we are a community organisation and not a registered company.

After several months and many calls, I did manage to complete the checks. At the same time, I asked if I could change the address on the account to that of the club house, as mail was currently going to the previous treasurer who had left the role.

That seemed to trigger some kind of warning as in November, the club’s accounts were closed without notice. They were not opened again until mid-January 2024.

Ruled out: This tennis club saw its bank account closed by Barclays, and it took 41 days for it to be opened again leaving it with various problems

This left us with various problems, including missed direct debit payments, late payments of bills which incurred fees and one large payment made twice in error.

All in all, we’re out of pocket by nearly £600. Can you help? P.H, Oxfordshire

Helen Crane, This is Money’s consumer champion, replies: Debanking continues to be an embarrassment to our financial institutions, and I’m sad to hear that another community group has been affected by it.

The good folks who run groups like yours often do lots of thankless work for little reward, all to make sure that fellow enthusiasts have a place to meet and pursue their hobby.

Banks must make sure their customers are who they say they are, but wasting time and resource performing painstaking and often irrelevant checks on clubs and societies on seems counter-intuitive given the low risk of fraudulent activity.

CRANE ON THE CASE 

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It’s no wonder that some have questioned whether the real motive is to get these organisations, which don’t make much money for the banks, to go elsewhere.

I’ve previously reported on charities, choirs and parish councils having their bank accounts closed down, often with little warning or explanation.

In your case, your tennis club was served a letter saying that you needed to complete know your customer security checks, referred to by the banks as ‘KYC’. This is often the starting point for organisations that are debanked.

The club held £62,000 with Barclays, part in a current account and part in savings. The money mostly comes from members’ dues and is used to pay for the maintenance of the courts and club house, as well as utility bills.

So you began a volley back and forth with the bank, trying to get it sorted. This proved tough, you said, as the call centre staff didn’t seem to know how to deal with an organisation that wasn’t either an individual, or a limited company – but you persisted and got there in the end. I make that 15-love to you.

But the debanking game had only just begun. The snag came when you requested a simple address update, which seems to have clashed with the checks previously conducted and led to your account being closed.

You did send through proof of the new address but were later told this was lost.

It was supposed to take 10 days to get the account reinstated, Barclays said, but there was a queue to start that process which meant it actually took 41 days.

Unable to pay utility bills, you received daily phone calls from peeved suppliers and were even threatened with disconnection.

Called out: P.H was not happy with the call centre staff he spoke to at Barclays, and is asking for additional compensation

When you raised this with Barclays you say you were first told that you should foot the bills with your own money – a claim Barclays denies.

Confusingly, you were later told a cheque for £60,000 – the money in the savings account – could be sent to you in the name of the club. But as the account with the club’s name had been closed, it wouldn’t have been able to be paid in anywhere.

When you pointed that out, you say another person on the phone at Barclays offered to make the cheque out in your personal name.

This offer worried you as, like many club and charity accounts, the mandate has joint signatories to guard against mis-management of funds. This means money shouldn’t be allowed to be taken out unless you, and the club’s president, approve it.

Ultimately, the account was reopened – but a payment scheduled weeks earlier also went out without warning. As you’d sorted this by another means by then, it meant the club had double-paid a supplier – money which you say you are struggling to get refunded.

The episode has left the club out of pocket by £580, and that is not counting the significant man hours you put in trying to get it sorted.

Barclays offered you a goodwill payment of £120, but you didn’t think this was enough and got in touch with me.

I pushed Barclays on its offer and it has now agreed to pay you a £500 redress payment, plus £445 in compensatory interest for the period the account was closed.

If you can provide proof of the £60 fees you say you incurred for missed direct debits, it will also refund you for those. It put your struggle down to a ‘clerical error’.

A Barclays spokesman said: ‘We accept that the closure of our customer’s account should not have occurred, and can confirm the account has been reopened.

‘A clerical error meant that our records showed we had conflicting information when this was not the case.

‘We have every sympathy with our customer and understand the inconvenience this caused. We have offered our profuse apologies together with a redress payment in recognition of the difficulties they faced.’

But the game is not yet over for you. You have since told me you have followed up with Barclays and demanded further answers, as well as a significant increase in the compensation offered to multiple thousands of pounds.

You argue that there are major flaws in Barclays’ security checks, communication and complaints processes, and that you should be better compensated for the amount of time you spent sorting out the account.

The ball is now back in Barclays’ court…