Abdulali Jiwaji and Nikara Rangesh discuss Yasin Al-Yasin v Starling, in Thomson Reuters Regulatory Intelligence

A recent High Court decision has considered the tensions that can arise when banks are seeking to close customer accounts – this comes at a time of increased scrutiny, including by regulators, amid allegations of politically motivated "debanking".  However, courts and regulators have continued to recognise the importance of banks' anti-money laundering (AML) and financial crime obligations. We discuss the recent developments and the key takeaways below.

Starling Bank Successfully Resists Injunction Preventing Account Closure

In Yasin Al-Yasin v Starling Bank Limited [2025] EWHC 3582 (KB) (Starling), the High Court refused to grant injunctive relief preventing Starling Bank from closing a customer's accounts.

The claimant held two accounts with Starling Bank (Starling).  The account terms contained an unlimited right for Starling to close the account on two months' written notice.  There was also a provision which allowed Starling to close the account without notice if it suspected that the customer was using the account for criminal or fraudulent purposes.

In December 2025, Starling restricted the claimant's accounts and gave him 28 days' notice of its intention to close them (so short of the two months). Following exchanges with the claimant, the bank granted a further period of two weeks before the accounts were due to be closed.

The day before the expiry of that extension, the claimant applied on a without notice basis for a mandatory injunction preventing Starling from closing his accounts. The application was heard the following day.

The claimant alleged breach of contract, breach of the Equality Act 2010, failure to make reasonable adjustments for disability, and asserted that information allegedly shared by Starling with another bank had prevented him from opening an alternative account. He also argued that he relied upon the accounts to receive Department for Work and Pensions (DWP) payments and had insufficient time to make alternative banking arrangements.

Starling relied on its contractual terms with the customer, which expressly permitted immediate closure where it suspected criminal or fraudulent use of an account.  During the hearing itself, the bank confirmed that the National Crime Agency had notified the bank of a Suspicious Activity Report (SAR) made to the NCA concerning the claimant's account.

The High Court dismissed the injunction application. Applying the well-established American Cyanamid test, the Court held[1] that there was no "serious issue to be tried".

In relation to the breach of contract claim, the Court accepted that Starling's terms entitled it to close the account immediately where criminal or fraudulent use was suspected.[2] Significantly, the Court held that the notification connected to the SAR provided "a sufficient basis to satisfy the requirement that the Defendant suspects that the account holder is using the account for criminal or fraudulent purposes", thereby entitling Starling to close the account without notice.[3]  This was a complete defence to the breach of contract claim.

The claimant alleged that the reason that Halifax had refused to open an account for him was because of information that had been provided by Starling, and that that information was misleading.  The Court rejected allegations that Starling had improperly shared misleading information with another bank.  There was no evidence that any communication by Starling was misleading or false.

The Equality Act claims were likewise unsuccessful. The Court held that such claims were not properly before the High Court and, in any event, there was insufficient evidence of discrimination or a failure to make reasonable adjustments. Importantly, the Court noted that Starling had granted the claimant additional time following his concerns regarding the impact of account closure. Further, evidence that DWP payments could still be accessed reduced the urgency and prejudice asserted by the claimant.

Regulatory overlay

The Starling decision sits against the backdrop of increased regulatory scrutiny of account closure decisions.

Following the well-publicised controversy involving Nigel Farage and Coutts, the Financial Conduct Authority (FCA) conducted a review in 2023 using data collected from 34 financial institutions to investigate concerns that banks were closing customer accounts because of their political beliefs or views. In September 2023, the FCA noted that the information it had received had not suggested that account providers had terminated customer's accounts because of their political beliefs or other lawfully expressed views.

The FCA published a follow-up report in September 2024 providing guidance on its expectations that firms balance their AML obligations with their broader consumer protection obligations when making decisions about account access and closure. The report emphasised that firms should:

• Make account access and closure decisions on reasonable and properly considered grounds rather than applying generic risk-based approaches.
• Maintain records of account access decisions to facilitate effective oversight and governance.
• Act proportionately when applying financial crime controls.
• Pay particular attention to the fair treatment of vulnerable customers throughout both the onboarding and offboarding process.

As the FCA has noted, since 31 July 2023, firms are required under the Consumer Duty to act to deliver good outcomes for retail customers.  In this context, it will be incumbent on banks to ensure that customers are informed of the scope for applying for a Basic Bank Account (BBA) if eligible.  BBAs are intended for UK personal customers who would otherwise be ineligible for an account, and are a simple type of current account intended to meet basic banking needs.  BBAs support financial inclusion. The FCA will expect a holistic approach, with a proportionate response to any risks identified, including in the context of account access.

Regulatory changes have also now come into effect through amendments to the Payment Services Regulations 2017 and the Payment Accounts Regulations 2015.

For accounts opened on or after 28 April 2026, firms must now provide a minimum of 90 days' notice before closing an account.[4] This extends the previous 60-day notice requirement that continues to apply to accounts opened before that date.

Further, under the new rules, banks will need to give a clear written explanation of why they have closed a customer's account.  With this, there would be scope for customers to "appeal" to the Financial Ombudsman Service.

However, the regulations still include an exception to the mandatory notice period where money laundering concerns arise,[5] including where a bank:

• is unable to apply the customer due diligence measures required by the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017[6];
• has reasonable grounds to suspect their service has been used, is being used or will be used in connection with a serious crime[7]; or
• reasonably believes that a customer has committed an offence and that their services have been used in connection with that conduct[8].

Care will need to be taken if a PSP wants to rely on an exception to be able to close an account without giving notice, for example that there are reasonable grounds to suspect that the relevant account is being used in connection with a serious crime.  Good record keeping will be critical in terms of being able to establish the evidence to justify the "reasonable grounds".

Practical Lessons

The above developments confirm that banks will be supported in closing accounts where genuine AML and financial crime concerns arise, and in light of tipping off restrictions.  Therefore, where a suspicious activity report has triggered a legitimate concern, courts are unlikely to second guess a bank's decision-making process.

Customers seeking urgent relief must show a serious issue to be tried. Mere disagreement with the bank’s decision is unlikely to suffice, and allegations of discriminatory treatment must be supported by a clear factual basis. Such claims may be more difficult to establish where a bank has taken reasonable steps to accommodate a customer's circumstances and where the customer remains able to access funds or make alternative banking arrangements.

The regulatory reforms enhance customer protections and transparency in ordinary account closure situations while preserving firms' ability to respond swiftly to financial crime risks.  Particular considerations will arise where vulnerable customers are affected, with reasonable transition periods for any actions on the account.

Debanking will be subject to challenge if the records do not address the risk factors and assessments underpinning the decision, and default to a broad or generic analysis, rather than considering the specific circumstances of the individual customer relationship.

Banks will look to ensure that customer terms address AML and fraud-related interventions, reserving suspension and closure rights.  Again, where these depart from regulatory obligations, there will be scope for challenge.

[1] [10].

[2] [10]-[11].

[3] [14].

[4] Section 51B.

[5] Section 51C. The regulations also provide an exception in the case of immigration non-compliance.

[6] Section 51C(a)

[7] Section 51C(c).

[8] Section 51C(e).