Lloyds Bank Account Forcibly Closed

[padrino]

I think everyone is reading too much into it.. Having a client with overdrawn accounts, even if it's "within the allowed amounts" is not good business for a bank... Banks make money off your money (balances and loans) and at least on the surface it appears you are a liability to them, BTC aside..

[1715173062]

1715173062

[1715173062]

1715173062

[1715173062]

1715173062

[5flags]

Just to update on my previous posts on this subject:

My account was forcibly closed by Lloyds on Friday - without warning! Although they claimed to have sent me a letter a month ago, which is very convenient. They closed all my accounts, my main current account, and the cash account I used for LocalBitcoins. This was a nightmare scenario because they cancelled my cards and everything.

To offer some context, my earnings are well into 6 figures, and the account is never overdrawn. I'm a little concerned that I have a large mortgage with the Halifax, which is part of the same banking group.

Unlike the OP, I didn't plead for mercy. I demanded £1000 in cash and a bankers draft for the remaining balance. I walked straight out of Lloyds and into HSBC and opened an account there.

Lloyds? Muppets!

[GoldSilverBitcoin]

If a bank gets any notion of you using bitcoin, they might shut down your account. I have experienced this personally. Open a new one, do it at a smaller branch too. They seem to be easier to work with. And tell your wife it is okay! Just a bank account...don't think this reflects on credit.

[Baitty]

Yeah reason I left llyods was this one of my friends had their bank closed for trading Bitcoin so I moved. they are losing a lot of business esepecialy because people who are involved with Bitcoin normally bring in good money for them.

[edmundedgar]

Another strange comment that was made was that the decision (to close my accounts) was being taken for purely commercial reasons. Now I have always paid all my bank charges. Every day I have made an overseas transfer I have paid the amount they asked me to pay (Usually £17.50) I have also suffered terribly because of Lloyds lousy exchange rates on SEPA transfers. In other words they have set the price of the services they offer and I have chosen to use them, how can they then say that they want to close my account for commercial reasons, it seems like that cannot be true.  If they (for example) lost money on overseas transfers then they should charge me more, but that's their problem not mine!!

The commercial reason is probably simply that they've got a certain proportion of customers whose transactions result in them getting it in the neck from some regulatory authority and having to waste a load of expensive people's time dealing with it, and they don't always know in advance which people these will be. It's cheaper for them overall just to use a few approximate criteria, applicable by fairly low-skilled people, to weed out anyone who looks like they might end up being one of those people and sacrifice their revenue, in exchange for less expensive trouble.

In theory I suppose they could apply special "flagged as a potential troublemaker rates" and charge you more for the privilege of banking with them to make up for the trouble that you might possibly cause them in the future, but that would end up costing them more to administer than it brought in, and probably wouldn't produce a wonderfully productive customer relationship with you.

Obviously the upshot is that all kinds of people get denied banking services for no good reason, which is one of the reasons we need bitcoin...

[Baitty]

Another strange comment that was made was that the decision (to close my accounts) was being taken for purely commercial reasons. Now I have always paid all my bank charges. Every day I have made an overseas transfer I have paid the amount they asked me to pay (Usually £17.50) I have also suffered terribly because of Lloyds lousy exchange rates on SEPA transfers. In other words they have set the price of the services they offer and I have chosen to use them, how can they then say that they want to close my account for commercial reasons, it seems like that cannot be true.  If they (for example) lost money on overseas transfers then they should charge me more, but that's their problem not mine!!

The commercial reason is probably simply that they've got a certain proportion of customers whose transactions result in them getting it in the neck from some regulatory authority and having to waste a load of expensive people's time dealing with it, and they don't always know in advance which people these will be. It's cheaper for them overall just to use a few approximate criteria, applicable by fairly low-skilled people, to weed out anyone who looks like they might end up being one of those people and sacrifice their revenue, in exchange for less expensive trouble.

In theory I suppose they could apply special "flagged as a potential troublemaker rates" and charge you more for the privilege of banking with them to make up for the trouble that you might possibly cause them in the future, but that would end up costing them more to administer than it brought in, and probably wouldn't produce a wonderfully productive customer relationship with you.

Obviously the upshot is that all kinds of people get denied banking services for no good reason, which is one of the reasons we need bitcoin...

Do people get denied from opening a bank? I always thought the bank wants anyone and everyone to further their profit margin.

[5flags]

Do people get denied from opening a bank? I always thought the bank wants anyone and everyone to further their profit margin.

One thing that can happen is that that the bank that kicks you out can flag your file with the self appointed guardians Equifax and Experian - effectively blocking you from access to banking.

[davidgdg]

I think everyone is reading too much into it.. Having a client with overdrawn accounts, even if it's "within the allowed amounts" is not good business for a bank... Banks make money off your money (balances and loans) and at least on the surface it appears you are a liability to them, BTC aside..

Rubbish. A retail bank earns money by borrowing (deposits) and by lending (overdrafts and loans). An authorised overdraft is simply a type of loan. No bank would ever close an account because the account is overdrawn within permitted limits. In fact depending on the terms of the overdraft it might well be a breach of contract to do so.

[mintymark]

Accounts being overdrawn was not an issue in my case, nor I suspect 5flags.

So I approached Metrobank, I was honest about the nature of the business (fool!!) and they spent a week deliberating during which time I understand it went up several tiers of management, before the answer came back, NO. And they said that they did not want to bank any business in a number of classes, and one of those is bitcoin. I asked for another example and he gave the example of the adult industry.

So, I really would like to know which banks are not funny about Bitcoin, preferably without spending a week finding out in each case.

Does anyone have advice as to which Uk bank to use?

[Satan666]

I'm taking "Operation: Choke Point" international.  You must turn away from Bitcoin and come back to fiat

[Guido]

Does anyone have advice as to which Uk bank to use?

I have never had a problem with Nationwide

also take no notice of people commenting about an overdraft
they're probably american
if a cheque bounces accidentally out there it's a case of 'don't taze me bro' and call the cops

luckily in UK people are a little more understanding and just post back requesting payment after returned before small claims, if ever gets to that point

not hating on Americans, just saying their system is very severe to individuals

this will not in any way reflect on your credit rating, it's Lloyd loss for being douches

a few banks may well go under this year, again, so steer well clear of RBS for one
also Barclays are facing big court cases over gold, libor manipulation etc and are scumbags anyway, so avoid like black death

Nationwide are pretty n ice people, no problems ever, no charges etc. they still have that cosy building society feel but with bank high street branches

[edmundedgar]

Does anyone have advice as to which Uk bank to use?

I have never had a problem with Nationwide

Have you told them you're doing something bitcoin-related?

More broadly, we could do with a banking version of something like http://bitlegal.net/ telling us which banks are happy with bitcoin-related businesses, which ones actively try to find them and shut them down etc.

[Ron~Popeil]

I use fidelity investments for checking. Being a brokerage they seem to be a little less restrictive with how I choose to use my money.

[Soros Shorts]

I use fidelity investments for checking. Being a brokerage they seem to be a little less restrictive with how I choose to use my money.

Just curious as to how you deposit cash into your Fidelity Investments checking account in the UK? Do you use third party ATMs?

[Ron~Popeil]

I use fidelity investments for checking. Being a brokerage they seem to be a little less restrictive with how I choose to use my money.

Just curious as to how you deposit cash into your Fidelity Investments checking account in the UK? Do you use third party ATMs?

I am in the US and simply use direct deposit. The product I use is the mysmartcash account. I am not sure if there is a UK equivalent.

[ajareselde]

Just switch to another bank, it was a matter of time when theese thing were going to start happening.
large banks scared of bitcoin, well, i call that a win in any case.

[phillipsjk]

So, I really would like to know which banks are not funny about Bitcoin, preferably without spending a week finding out in each case.

Does anyone have advice as to which Uk bank to use?

There is the List of Bitcoin Hostile (and friendly) Banks

unfortunately, it looks neglected and has no UK entries yet.

[globe-biz]

I'm taking "Operation: Choke Point" international.  You must turn away from Bitcoin and come back to fiat

seek exorcism

[ShakyhandsBTCer]

It appears that your account is overdrawn. Overdrafts are generally considered as being unauthorized loans and are very risky for the bank. If your account was often overdrawn then this may be the reason for the account closure.

[counter]

Did you have an overdraft fee on multiple accounts?  I don't get why multiple accounts were closed.  This type of thing should be illegal.  After a contract is signed to do business their should be no way they can back out of the deal without good reason.  This is a crazy system we have in place and all signs point to things getting much worse.  Soon there will be no option to move to another bank..  Very sorry for the inconvenience they've caused you and your wife.