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GP practice left in chaos after bank account closed down without warning

by Emily Roberts and Rima Evans
15 December 2023

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A Cambridgeshire GP surgery that was ‘debanked’ was left in ‘chaos’ and unable to pay bills for medication supplies or receive incoming funds, its senior GP partner has said.

Orchard Surgery in Melbourn, Cambridgeshire had its business account with Barclays Bank suddenly shut on November 1. The practice received no warning of the closure but was simply sent a cheque in the post covering the account balance.  

Dr Sarah Smith, a senior GP partner, said the bank’s action caused ‘great stress and chaos’, as it took nearly three weeks to remedy. It was four weeks until online banking services were restored again.

She said the dispensing practice, which provides care to 8,400 patients, was unable to pay several bills of up to £10,000 each from pharmaceutical companies supplying medication to its dispensary.

At the same time, it was not able to receive incoming payments due from NHS England, the primary care network and other sources.

Dr Smith told Management in Practice: ‘It has had a severe impact and affects the care of our patients and the day-to-day running of the GP surgery. It’s been horrendous.

‘Fortunately, at the end of October all our staff were paid. If the closure had happened a day earlier my staff would have not been paid,’ she added.

‘We are appalled and horrified that our account had been shut suddenly like this with no warning.’

The account closure is thought to have been down to problems with paperwork the surgery had to complete following a change in partners. 

Dr Smith said an administrative error was made by Barclays when processing the mandate change.

‘In October, I spent an hour on the phone to the mandate change department, updating them on the name changes of our partners and was assured all was fine and that the account would not be closed.

‘We were therefore shocked when the account was closed on 1 November and further surprised when another mandate change form arrived in the post for us on 2 November. We had already filled out the required forms and sent them back, so we were not expecting yet another form.

‘The bank has admitted the account closure was caused by an administrative error at their end.’

Dr Smith said she spent hours on the phone to Barclays trying to resolve the issue but was advised that reopening the account could take up to 10 working days.  

‘I repeatedly called them to say it’s an urgent issue since we are dealing with providing medical supplies and this is people’s lives and wellbeing, but they couldn’t escalate it any quicker. The whole process was painfully slow.’

‘This is not an acceptable way to treat loyal business customers,’ she added.

Dr Smith even contacted South Cambridgeshire MP Anthony Browne, who got in touch with Barclays to try and help.

The practice is still dealing with the fallout of the bank’s actions, with paperwork and bills to sort, as well as having to identify incoming payments that were missed.

Dr Smith has complained to Barclays and was told that the bank needed to update account details because of regulations set by the Financial Conduct Authority. ‘They said it was to wheedle out criminal accounts or anyone involved in terrorism,’ she said, adding: ‘We’ve had an account with them for 20 to 30 years.’

She also told Barclays the process for changing the mandate was ‘slow and cumbersome’, with GP staff spending hours on the phone to the bank to try and sort the issue.

‘This has meant that doctors who should be getting on with seeing patients have had their day significantly disrupted. The banks really should have a dedicated business manager for each business account, so you only have to speak to one person to sort out any problems.’

Dr Smith said the bank has since apologised, but that the apology did not reflect the stress caused. ‘I’ve had nights going to bed worrying about it. It’s been awful.’

She is now advising other surgeries not to ignore communications from the bank, but to check they are not a scam before responding. ‘Texts and emails from Barclays saying we needed to update our business account details initially looked like a possible scam message,’ she explained.

Dr Smith said she was contacted by another surgery that had experienced a similar problem, as well as a patient. ‘A patient of mine said she had her bank account closed and she’s in her 70s. It’s impacting people like that,’ she said.

 ‘I worry for vulnerable people or those with learning difficulties or elderly people and those who can’t navigate online banking; people who don’t have a voice or who can’t fight their corner.’

In October, the Government announced it is looking to implement tougher rules to stamp out debanking, requiring banks to give a notice period of 90 days before terminating an account and to provide customers with ‘clear and tailored explanations’ for why the action was being taken. This followed reports of banks closing accounts of customers based on their political views.

A Barclays spokesperson said: ‘We acknowledge wholeheartedly the challenges the customer faced in obtaining the information needed in order to update the account mandate, and the resulting impact this caused. We are required to keep up to date information regarding our customers’ accounts, as part of our ongoing responsibility to help prevent financial crime, and to meet our regulatory obligations.

‘This process was complicated for our client due to changes of the partnership members over a passage of time which was not communicated to Barclays. In cases where we do not receive a response with up-to-date account information, we will proceed with the application of card blocks and account restrictions, ahead of issuing final closure arrangements.

‘The mandate on the account has now been updated and the business accounts have been reopened. We accept that on this occasion more could have been done to help our customer through this complex process and as a result a resolution has been agreed with a redress payment accepted for the inconvenience caused.’