Starling Bank Limited · DRN-5912195

The complaint Mr H complains on behalf of ‘I’, a limited company, that Starling Bank Limited ('Starling') blocked and closed I’s account, without providing a proper explanation. What happened The detailed background of this complaint is well known to both parties. So, I’ll only provide a brief overview of some of the key events here. I had a business account with Starling. In July 2025, I’s account was restricted and Starling contacted I’s director, who I will refer to as Mrs H, to inform her that I’s account was under review. Whilst the review was underway, the funds in I’s account, amounting to approximately £10,000 was inaccessible to I. Mrs H got in touch with Starling and explained that she urgently needed access to the funds in I’s account, for business related payments. And that she wanted to speak to Starling over the phone about the matter, because the communication she’d received about the review had been via Starling’s in-app chat function. Mrs H made a complaint to Starling. She outlined the issues she was unhappy about regarding the account restriction over the phone, with a member of Starling’s complaints team, at the beginning of August 2025. Starling subsequently wrote to Mrs H at the beginning of August 2025, to explain that it had closed I’s account, in line with the account terms and conditions. And that Mrs H would receive a cheque for the account balance in the post. Starling issued its final response to the complaint in August 2025. In summary, it said: • Starling was required to monitor accounts and transactions, in line with the account terms and conditions. So, restrictions were placed on I’s account as part of a review and further information couldn’t be shared about this • A timescale couldn’t have been provided regarding the time it would take to conclude the review, as each case is reviewed on its own merits • Each time Mrs H requested an update, it was passed on to the team reviewing I’s account • I’s account had subsequently been closed in line with the terms and conditions of the account and further information couldn’t be shared regarding the reason for the account closure • Whilst Mrs H would’ve liked a phone call regarding the matter, the team reviewing the account wouldn’t have been able to provide more information than what was given in the in-app messages

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I’s complaint was referred to this service. Mr H explained that Mrs H had taken out a loan and used her personal funds to cover payments for I, whilst the account was under review. Mr H added that Mrs H wished to know why the account was frozen and was unhappy regarding the communication that Starling provided, during the review. And that Mrs H considered updates were provided via a chatbot, and she thought Starling had used Artificial Intelligence to do so. One of our Investigators looked into things and didn’t uphold I’s complaint. The key points they made were: • Each bank has its own risk criteria when deciding to open or close accounts • The terms and conditions of I’s account, stated that Starling could suspend or close accounts, under certain circumstances without providing notice and they stated that Starling wouldn’t be able to confirm how long the restrictions would be in place for • Starling had provided information to our service in confidence about the account review and it wasn’t appropriate to share that information with I • Starling’s review of I’s account had been done in line with the account terms and conditions and Starling’s obligations, so it hadn’t done anything wrong I disagreed with the outcome. In short, Mr H argued: • It was concerning that I hadn’t been provided with the reason for why I’s account had been restricted and closed • I couldn’t effectively provide a response regarding the outcome of the complaint because information about the restriction hadn’t been shared with it, which was worrying • This process was unfair and didn’t give I the opportunity to dispute or clarify the reasoning relied on As I remained unhappy with the outcome, the matter has been passed to me to decide. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Account review Banks in the UK, like Starling, are strictly regulated and must take certain actions in order to meet their legal and regulatory obligations. They are also required to carry out ongoing monitoring of an existing business relationship. That sometimes means banks need to restrict, or in some cases go as far as closing, customers’ accounts. Starling has provided me with an explanation and supporting evidence as to why it decided to restrict I’s account and retain its funds. Having carefully considered this, I’m satisfied Starling did so in line with its wider legal and regulatory obligations. So, I don’t consider Starling has done anything wrong in withholding I’s funds, for the time it did. I would add too that our rules allow us to receive evidence in confidence. We may treat evidence from financial businesses as confidential for a number of reasons – for example, if it contains information about other customers, security information or commercially sensitive information.

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Accordingly, I have accepted information in confidence which I am not disclosing to I. And the description of that information is that it’s of a nature which justifies Starling’s review and which has led me to decide that Starling hasn’t treated I unreasonably when it reviewed I’s account and retained its funds. I note Mrs H asked Starling to explain why it was reviewing I’s account on several occasions. And Mr H has said that since I hasn’t had any clarity about the reasons for the restriction, it can’t defend itself. I’ve taken onboard Mr H’s comments. But I’m satisfied Starling fairly reviewed I’s account. And Starling has asked for the details of the review to be kept confidential. This service was set up under a set of rules, DISP, and DISP 3.8.1R, says: In dealing with information received in relation to the consideration of a complaint, the Financial Ombudsman Service will have regard to the parties' rights of privacy. I’ve considered what Starling has sent this service, and I’ve carefully considered what Mr H has said about fairness and I not being able to defend itself. But, having considered all this, I still think it’s fair not to release the specific reasons for Starling deciding to review I’s account and subsequently closing it. I know Mrs H is frustrated that she hasn’t been given a detailed reason as to why Starling has done this. But it’s not obliged to do so. I can’t say Starling has done anything wrong in not providing this information as much as she’d like to know. And it wouldn’t be appropriate for me to require it do so now. I recognise Mrs H is unhappy that she didn’t receive any phone calls regarding the account review despite requesting them. And she was contacted via Starling’s in-app chat function when she was given updates regarding the review. Whilst I appreciate Mrs H found the review process and the communication method Starling used to be frustrating, I must highlight it is not within this service’s remit to tell a business how to run their review processes or procedures, in order for them to meet their legal or regulatory requirements. It would be the role of the regulator – the Financial Conduct Authority (FCA), who have the power to instruct Starling to make changes to its policies and procedures, if necessary. I would add too, that the terms and conditions of the account, state that Starling will endeavour to provide updates via its app when necessary, during an account review. And having looked at the information Starling shared with Mrs H about the review via the in-app chat function, I don’t find there was any additional information it could’ve shared with her. I note Mrs H also received calls from Starling’s complaints team in August 2025, to discuss the matter and she was able to share her concerns regarding the review. She was informed during the calls that Starling wouldn’t be able to disclose the reason for the review to her and it wouldn’t be able to confirm a timeframe, for when the review would be concluded. So, I find Starling acted reasonably when reviewing I’s account, in the circumstances of this complaint. Account closure The terms and conditions of the account that I and Starling had to comply with, say that Starling could close its accounts by giving I at least two months’ notice. And in certain circumstances it can close an account immediately or with less notice. Starling closed I’s account with immediate effect. Starling has shared information about why it decided to close I’s account with us. Having looked at the information given to me by Starling in confidence, I’m satisfied it was entitled to close the account immediately and acted fairly when doing so. And Starling isn’t obliged to share this information with I.

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Having considered everything, I think Starling acted both fairly and reasonably in the circumstances of the complaint - so I won’t be directing Starling to do anything to put things right. My final decision For the reasons above, I have decided not to uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask I to accept or reject my decision before 16 April 2026. Khadijah Nakhuda Ombudsman

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