Can a fintech company close my account without explaining why?
The letter arrives, the reason doesn't — and until recently, that was almost always allowed on both sides of the Atlantic. One side just changed the rules.
In the US, largely yes — banks and fintechs generally have broad discretion to close an account, and if it's tied to a Suspicious Activity Report, federal law actually forbids them from telling you that's why. In the UK, this changed materially: from 28 April 2026, payment firms (banks, e-money institutions, fintechs) must give 90 days' notice and a specific, detailed written reason, up from the previous standard of 60 days and no explanation at all. The UK change traces directly back to a single high-profile case, which is worth knowing because it explains exactly what the new rule is designed to prevent.
What the law says
| United States | United Kingdom | |
|---|---|---|
| Can they close without reason? | Generally yes — account agreements typically reserve broad discretion to close at will | No, not since 28 April 2026 — a specific written reason is now required |
| Notice period | No universal federal requirement; a small number of state proposals exist but none has passed nationally as of 2026 | 90 days (up from 60), under the Payment Services and Payment Accounts (Contract Termination) (Amendment) Regulations 2025 |
| If tied to a Suspicious Activity Report | The bank is legally prohibited from disclosing this ("tipping off") — you may never get a real reason | Similar tipping-off restrictions can still apply in genuine AML cases, but the new rule requires firms to be far more specific in routine closures |
| Where the rule change came from | N/A | Followed the widely publicized 2023 NatWest/Coutts closure of Nigel Farage's account, where an independent report found the bank failed to properly communicate its reasoning |
| Your funds | Banks must still return your remaining balance, typically by check or transfer, though this can take days to weeks | Same principle — closure doesn't mean forfeiting your balance, only losing access to the account itself |
The UK change is genuinely significant and worth understanding in context: it's not a minor tweak. Firms are now expected to write termination notices specific and detailed enough that an ordinary customer can actually understand why they're being closed out — regulators have said they may test this by running notices past customer focus groups. That's a meaningfully higher bar than "we're ending our relationship with you," which was previously considered sufficient.
Your situation — which one is this?
Common and usually not sinister "De-risking" — the account fits a pattern the firm has decided to exit
Banks and fintechs sometimes exit entire categories of customer to reduce compliance workload — freelancers with irregular income, people with frequent international wires, crypto-adjacent businesses, or long-term expats. This isn't about you personally; it's a portfolio-level decision, and it's the single most common reason behind an unexplained closure.
Watch for this A closure that arrives with genuinely no reason and very short notice
If you're in the UK and this happens after 28 April 2026, this itself may not be compliant — ask directly whether the notice meets the new 90-day, written-reason standard. In the US, short or no-notice closures remain broadly permitted, but you're still owed your balance back.
Different territory The closure is tied to a Suspicious Activity Report
If this is the case, in both countries the firm is legally barred from confirming it to you. The first sign is often simply the closure or freeze itself, with support staff repeatedly saying they "can't discuss the specifics" — that phrasing is often the tell.
Worth checking Mixed personal/business use, or activity that doesn't match your stated profile
Running business transactions through a personal account, or a sudden pattern of transfers that doesn't match your account history, are common (and legitimate) triggers for review — not necessarily wrongdoing, but worth understanding since it's fixable going forward with a dedicated business account.
Where firms get it wrong
UK, post-April 2026: "We are closing your account effective [date, 90 days from now] due to [specific, detailed reason]. You can challenge this decision through the Financial Ombudsman Service if you believe it's incorrect."
A generic "we are ending our relationship with you" notice with no detail at all, issued with short notice, after the new UK rule takes effect — or a US closure where the firm implies AML suspicion without ever formally filing anything, simply to avoid explaining an ordinary business decision.
What to say
UK, requesting the specific reason
US, requesting your balance and any available explanation
If you believe the closure was wrongful
- Get everything in writing. Save the closure notice exactly as received — the wording itself can matter if you escalate.
- Diversify before it happens again. Keeping a second account at a different institution means a single closure doesn't cut off your access to money entirely.
- UK: escalate through the Financial Ombudsman Service if you believe the closure, notice period, or lack of a specific reason breaches the current rules.
- US: if you believe the closure was discriminatory or otherwise improper, complaints can go to the CFPB, the OCC, or your state banking regulator.
Related questions
Official sources
- UK — Payment Services and Payment Accounts (Contract Termination) (Amendment) Regulations 2025, effective 28 April 2026
- UK Financial Ombudsman Service — account closure complaints guidance
- US Consumer Financial Protection Bureau — account closure rights guidance
Don't let one closure cut off all your access
Use our Account Closure Response Letter generator to formally request a specific reason and confirm your notice period met current requirements.
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