‘Numb with outrage’: Residents associations ‘debanked’ by Barclays

Residents associations have had their Barclays accounts closed or restricted with little warning in current months, This is Money can reveal.

Following This is Money’s investigation into Barclays debanking dozens of group organisations with none discover, teams of house owners who pool cash collectively to keep up their blocks of flats have additionally come ahead with tales of their financial institution accounts being equally shut or restricted. 

In whole, round 70 small organisations from parish councils to charities have now contacted This is Money about their financial institution accounts being closed or briefly frozen by Barclays.  

Locked out: Residents associations who pool cash collectively to keep up their block of flats have had their accounts shut ‘out of the blue’ by Barclays (inventory picture)

Residents associations are small non-trading firms set as much as handle communal payments and upkeep, often in homes which were cut up into flats, or smaller purpose-built blocks.

This typically contains issues like cleansing home windows, sustaining gardens and conserving communal areas similar to hallways and entrances in good condition. 

Many of the residents we spoke to pay month-to-month charges to Barclays of between £6.50 and £8 to keep up the accounts and have banked with Barclays for greater than 30 years.

Francis Wheen is a member of a flat administration firm which has banked with Barclays for the reason that residents affiliation was fashioned greater than 30 years in the past.

The property is a terraced home that has been cut up into four-self contained flats. The 4 flat homeowners are co-directors of the organisation, which exists to pay joint bills similar to electrical energy for shared areas, constructing insurance coverage premiums, portray the constructing’s exterior and a communal gardener.

The organisation’s outgoings are lined by a small direct debit from every of the 4 flat-owners of £45 a month every. 

The account has a low turnover and retains a steadiness of about £3,500. They paid Barclays £8 a month in charges to retain the account.

In May this yr Barclays despatched a letter saying they had been going to shut the account on the finish of June until the group ‘supplied its enterprise particulars.’ 

At this level Barclays put restrictions on the account so it couldn’t be accessed by on-line banking.

The group provided Barclays with the main points of every of the 4 administrators, which they are saying the financial institution already had. Barclays then despatched a type for them to fill by which contained questions not relevant to a flat administration organisation – for instance ‘who’re your important clients?’

The account was reactivated after Barclays confirmed that they had the knowledge they wanted.

But 4 months later, in October this yr, a letter arrived telling them the account was now closed with a cheque enclosed for the steadiness. 

Wheen stated it was a ‘Bolt out of the blue’.

He added: ‘Not solely have Barclays left us in scary monetary limbo, they’ve additionally broken our creditworthiness and so made it tougher for us to arrange an account elsewhere.

‘Residents associations that financial institution with Barclays are actually in critical hazard of being instantly debanked for no cause. I’m nonetheless feeling numb with outrage at Barclays’ behaviour.’

Closed accounts: This is Money has heard from dozens of organisations which have instantly and with out clarification been debanked by Barclays

The group is unable to money the cheque, nonetheless, because it was made out to the administration firm, which doesn’t but have an alternate account. 

They had been instructed that the account couldn’t be reopened and that they must open a brand new one or make ‘different banking preparations’.

The group had direct debits and common outgoings similar to constructing insurance coverage premiums and electrical energy payments which it might now not entry its funds to pay. 

However, Barclays has since provided to reopen the account.  

‘I assumed I had misplaced everyone’s cash’ 

Another residents affiliation discovered itself in the identical place when it obtained a textual content from Barclays in October saying their two financial institution accounts had been closed.

The group is a residents affiliation for a block of flats in Buckinghamshire. They have round £10,000 of their accounts and pay charges of £6 a month.

In May this yr, they had been requested by Barclays to finish a ‘know your buyer’ type confirming all the main points of the residents affiliation. They say they weren’t requested for any extra data after that.

All of a sudden on 23 October 2023, they found £10,000 had been drained from the account. The account was then closed on 31 October 2023.

Neil Rogers, the corporate secretary, whose identify we’ve got modified at his request, stated: ‘When we logged into the account we might see that any individual had swept the cash from the financial savings account into the present account after which transferred all the cash away from the financial institution.

‘I felt bodily sick – I assumed somebody had scammed us. I believed I used to be by some means accountable for a lapse in safety, and that now our firm was bankrupt and I had misplaced everyone’s cash. 

‘None of the messages from Barclays instructed us that they had really closed the account themselves, they stated that cash had been moved between accounts after which taken out leaving a zero steadiness.’

Neil added: ‘We now don’t have any checking account and don’t have any solution to pay our gardener, cleaner or window cleaner. Barclays has closed its department in our city so we will not even go to it.’

‘Barclays has no concept what a residents affiliation is’ 

Eddystone Court Residents Association is one other flat administration organisation which has been affected. It is accountable for sustaining eight flats inside a block in Winchester, Hampshire. 

Its treasurer, David Walton, received in contact with This is Money. 

He instructed us the group banked with Barclays with no points for eight years, till mid 2022 when ‘out of the blue’ they had been requested to finish a enterprise data doc.

He additionally stated Barclays has threatened to shut the account a number of occasions since, regardless of the residents offering all of the requested data. The financial institution not too long ago blocked on-line and debit card entry to the account.

Walton added: ‘Barclays has no concept what a residents affiliation is or what its enterprise objective is – upkeep of the widespread areas of the freehold property with every member making a month-to-month contribution.’

Barclays finally provided to reopen the residents affiliation’s account, in order that it has extra time to offer data. 

The group declined the provide and are opening a brand new account with one other financial institution.