Former European Parliament lawmaker and UKIP leader Friday dismissed a review that cleared NatWest Group of breaking the law when it closed his account with its private banking arm Coutts as a whitewash.”
Round one of an independent review of NatWest Bank’s closure of former British politician Nigel Farage’s account published Friday found it acted within the law but rebukes the bank over the process, the way it communicated with him and its handling of his confidential data.
The review by leading London law firm Travers Smith rejected Farage’s claim that his account with NatWest’s private banking arm Coutts was shut due to his political views saying it was “predominately a commercial decision” that did not breach applicable laws and was made in accordance with the relevant bank policies and processes, according to a NatWest news release. Advertisement
“Coutts considered its relationship with Mr Farage to be commercially unviable because it was significantly loss-making. The Coutts Eligibility Criteria were not a relevant factor in the exit decision. Foremost among those other factors was the risk Coutts perceived to its reputation in the eyes of its stakeholders. But these were not, in Travers Smith’s view, factors that drove the exit decision.” Advertisement
While the bank was within its right to close the former MEP and UKIP leader’s account, the way the decision was communicated to Farage was not in accordance with the bank’s policies and processes, specifically not providing an adequate reason as required when a closure was not due to financial crime. When Farage disputed the closure, the bank failed to log the complaint for several months and wrongly decided to continue to classify him as a “Politically Exposed Person.”
A leak to the BBC of Farage’s confidential customer information by CEO Alison Rose “probably amounted to a Personal Data Breach for the purposes of the General Data Protection Regulation, Travers Smith’s report states, as well as a possible breach of banking regulations but was not intentional and his account balance was not revealed. There was no evidence of leaks of other customers’ information.
Farage dismissed the report as a “whitewash.”
“They say my political views ‘not aligning with the bank’ was not in itself a political decision. They also find no evidence my ‘pro-Brexit’ views were a factor, despite Brexit appearing 86 times in the Subject Access Review I requested,” he wrote in a post on X.
He also accused Travers Smith of bias saying its emeritus chair, Chris Hale, had in the past described Brexiteers as “racist and xenophobic.” Advertisement
NatWest Group said it accepted and would implement all of Travers Smith’s recommendations including ensuring individuals’ lawfully protected beliefs or opinions did not enter into decisions on who should or should not be a customer, a review of how exit decisions are made and communicated, providing reasons for exits where appropriate and putting in place a process to offer alternative banking arrangements elsewhere in the group where a client is exited for commercial reasons.
The bank said it would also engage with Coutts customers in commercially-driven exit decisions to give them the opportunity to deposit more funds, conduct regular reviews to ensure PEPs’ status has not changed and implement better staff training on exits, complaint handling, client confidentiality and banking secrecy.
“This report sets out a number of serious failings in the treatment of Mr. Farage. Although Travers Smith confirm the lawful basis for the exit decision, the findings set out clear shortcomings in how it was reached as well as failures in how we communicated with him and in relation to client confidentiality,” said Chairman Howard Davies.
“We apologize once again to Mr. Farage for how he has been treated. His experience fell short of the standards that any customer should expect. Advertisement
“Our job now is to make sure that does not happen again. The bank is committed to implementing all the recommendations made by Travers Smith and we are making substantive changes to our policies and procedures, in particular to ensure that the lawfully protected beliefs or opinions of customers do not play any role in our decision-making.”
A second phase of the review looking into a broader sample of Coutts’ account closures in the past 24 months, is ongoing with findings due to be presented to NatWest’s board later this year.
