Banks’ sudden closure of customer accounts during fraud inquiries is to be investigated by the Treasury. Two recent cases saw students frozen out of their own accounts and hit with a black mark at fraud agency Cifas, making it difficult to clear their names. The problem, raised in Parliament by Stephen Timms MP, the shadow employment minister, and highlighted by BBC Moneybox, lies in how banks register a ‘fraud’ flag on customer accounts.

In one instance, a customer’s bank compensated her as a fraud victim — only to then register her name with Cifas without alerting her to the implications. A Cifas mark can...Read more here--> Banks' sudden closure of customer accounts prompts fraud investigation by the Treasury