Following its call for evidence on the PSRs, the Government has set out proposed reforms to enhance requirements relating to contract termination for payment accounts, as per the new powers conferred by FSMA 2023.
Under the new rules protecting freedom of expression, banks must explain and delay any decision to close an account. The notice period will also be increased to 90 days, giving customers more time to make a challenge through FOS, or find a replacement bank.
The Government intervened to address fears that banks are terminating accounts because they disagree with someone’s political beliefs. The policy statement notes that the call for evidence did not provide definitive evidence either way as to whether accounts were indeed being closed for political reasons.
The Government will formally respond to its call for evidence on the PSRs later in 2023.