EXCLUSIVE: Banks freezing and closing retailers’ business accounts

High-street banks have been freezing and closing the business accounts of retailers who fail to meet new “unjustifiable” deadlines to comply with money-laundering regulations. 

betterRetailing counted more than 20 instances of convenience stores having their accounts frozen since late December, and store owners claimed they had received “countless” calls from Santander, NatWest and Barclaycard threatening to freeze their accounts if they didn’t update their personal information online at short notice, including backdated corporate tax returns, utility bills and payslips. 

The Financial Conduct Authority (FCA) introduced new limits at the end of last year on the amount of cash small businesses can deposit to banks and the Post Office (PO) from personal and business accounts. 

From 1 January, store owners are limited in how much cash they can deposit at the PO with one major bank setting the limit at £240,000 over 12 months.

Post Office reveals continued drop in cash deposits

The FCA also introduced new guidance for banks to carry out additional money-laundering checks, which is thought to be behind the wave of threats and freezes.