AFCA can help resolve complaints about a financial firm’s decision to close your banking facility.
This page has some of the most common questions about the closure of banking facilities. It does not apply to complaints about:
- insurance policies or investment products
- a refusal by a financial firm to open a new account
- a financial firm’s decision to stop providing a banking facility to all customers.
What is an account closure complaint?
If a financial firm decides to stop providing a product or service to you, such as a transaction account, a credit facility, or a merchant facility, and you are not happy about this decision, we describe it as an account closure complaint.
How does AFCA deal with account closure complaints?
A financial firm can stop providing a product or service to a customer, just as the customer can choose to move to another financial firm. However, a financial firm must consider their customer’s circumstances when closing their account.
We will consider if the terms and conditions allow a financial firm to close an account (or stop providing a service), and whether the financial firm has fairly exercised its rights by taking into account:
- obligations under the relevant laws and codes of practice
- good industry practice, such as the Banking Code of Practice
- customer conduct
- the impact of the account closure on the customer.
We will also consider whether the financial firm provided sufficient notice, generally 14 calendar days.
Does the financial firm have to give me a reason for closing my account?
It is helpful if a financial firm explains why an account was closed but there can be valid reasons for not explaining the decision to their customer. If so, we may be satisfied the financial firm acted reasonably even though it did not say why the account was closed.
How will AFCA decide if the account closure was fair?
In addition to the financial firm’s right to close the account, we will consider what is fair in all the circumstances.
For example, it may be appropriate to give a customer living in a rural or remote area extra notice of the account closure so that they can make other arrangements. This might involve visiting a bank branch that is hundreds of kilometres away, which takes time and planning.
What outcomes can AFCA provide for my account closure complaint?
AFCA generally accepts that a financial firm can stop providing a financial product or service, so it is unlikely we will require the financial firm to reopen the account.
If the financial firm did not provide enough notice and / or breached another obligation, we may require the financial firm to:
- extend the account closure date (if the account has not already been closed)
- compensate you for any loss incurred as a result, including claims for non-financial loss.
Information about AFCA’s Approach to non-financial loss can be found on our Publications page.