'Nobody told us what we'd done wrong!' Village sports club takes Lloyds to Ombudsman in test of Britain's new debanking rules

The case will test whether the Ombudsman is willing to hold banks to account for conduct that predates the new rules

The case will test whether the Ombudsman is willing to hold banks to account for conduct that predates the new rules

For more than 130 years, this quintessential English village sports club has been at the heart of its community.

Founded around a thatched cricket pavilion in 1892, generations of children have played cricket and football there through two World Wars, the Great Depression, countless recessions and the Covid pandemic. Its toughest opponent, however, was not on the pitch, but behind a computer screen.

It was the faceless world of 21st-century algorithms and automated compliance systems - designed to make our lives easier.

After more than 70 years of banking with Lloyds, the volunteer-run club found itself locked out of its account after the bank's automated system rejected certified identification from one of its trustees without explanation.

In years gone by, 83-year-old treasurer Ian Campbell MBE would have walked into his local branch and spoken to someone who knew the club.

Instead, he found himself trapped in a maze of automated systems, phone calls and silence, unable to find anyone who could explain what had gone wrong.

Now the volunteer-run club is taking Lloyds to the Financial Ombudsman in a case that will test whether Britain's new de-banking protections go far enough.

The case comes just months after new protections came into force in April, requiring banks to give 90 days' notice and a written reason before closing an account. But critics say those rules only cover new accounts, potentially leaving millions who banked before April this year without protection.

It also comes as figures show 453,230 bank accounts were shut in Britain last year, almost ten times as many as a decade ago.

Complaints to the Financial Ombudsman over de-banking have risen almost 70 per cent since 2020 to nearly 4,000.

Critics say the problem is being driven by the replacement of local branch managers who knew their customers with automated compliance systems that flag accounts without human oversight, leaving no one with the authority to intervene or explain.

For retired professionals volunteering as treasurers and trustees, the consequences can be particularly severe.

Less likely to be digitally confident, they often have no branch to walk into, no human being to call and no explanation of what they have done wrong.

When it was opened over a century ago, water was carried across to the thatched cricket pavilion by bucket and a two-wheeled hand water cart was pulled across by the players.

Today, Walsham le Willows Sports Club fields up to 24 youth cricket and football teams, has won numerous district titles and cups and boasts some of the best facilities in the area with four grass pitches, car park, tennis court and an artificial grass pitch.

Mr Campbell, now 83, has looked after its finances since 2009 without incident.

Last summer, the bank sent a compliance request. Mr Campbell supplied everything that was asked for.

Further requests followed, including certified identification for three trustees. Those documents were submitted, then rejected. No explanation was given.

In frustration, he drove to a Lloyds branch for answers, only to be told branches could no longer deal with business accounts.

Direct debits began to bounce. Grant payments dried up. VAT refunds failed to arrive. Online banking access disappeared.

In two letters to Lloyds chairmen in May, Mr Campbell wrote: "A visit to a branch is a waste of time as they can't deal with a business account. The phone call to business banking only yields the information we already know - that the account is closed."

He added: "The silence was deafening; there were no replies."

The club lodged a formal complaint. Lloyds upheld it, opened a new account and deposited £300 compensation into it.
Mr Campbell rejected the payment and has now taken the dispute to the Financial Ombudsman.

"£300 is a smack in the face," he said. "The damage to our reputation, the online bank details not available, direct debits failing, and the days and days of voluntary work trying to sort it out."

"One of the things that impacted me most was that I thought I had to stop being treasurer. At 83, with IT skills somewhat limited, I began to think I was the problem."

He added: "I never got any answers. I could get no information. For small charities run entirely by volunteers, often past retirement stage," Mr Campbell said, "navigating the computer systems can feel impossible."

Explaining why he persevered, he said: "The sight of hordes of children of all ages and genders enjoying sport - not an iPad or iPhone in sight - gives me the greatest pleasure and makes me proud of the work that has gone in."

The case will test whether the Ombudsman is willing to hold banks to account for conduct that predates the new rules - and whether the rules themselves go far enough.

Banks retain the right to close accounts without explanation where financial crime is suspected and are not required to disclose what the suspicion is.

However, research suggests banks routinely use automated risk algorithms to monitor accounts for high-risk or unusual activity and can opt to close an account rather than try to manage what is picked up as a risk of financial crime, even if the customer has not committed a crime.

The charity sector says banking problems are widespread. A survey of nearly 1,900 charities published last November by the Charity Finance Group found nine in ten had experienced at least one banking problem in the previous two years.

More than a quarter could not get a clear explanation from their bank.

The de-banking row first exploded in 2023 when Reform leader Nigel Farage revealed Coutts had closed his accounts over his political views, forcing the resignations of two bank chief executives. That same year more than 140,000 small business accounts were closed by major UK banks.

Earlier, PayPal froze the accounts of parents' group UsForThem, the Free Speech Union and the online publication the Daily Sceptic before later admitting it was because of their views on Covid vaccines and school closures. The regulator intervened and the accounts were reinstated 22 days later.

A Lloyds spokesperson said: "To help protect customers and meet our regulatory obligations, we sometimes need to carry out checks to confirm how an account is operated. In this case, while those checks were necessary, the experience wasn’t as easy as it should have been and we are sorry for the distress and disruption this caused.

"We have reviewed what happened, apologised to the club, paid compensation in recognition of the service received, and the account is now open and operating normally."

A Lloyds spokesman said: "To help protect customers and meet our regulatory obligations, we sometimes need to carry out checks to confirm how an account is operated. In this case, while those checks were necessary, the experience wasn’t as easy as it should have been and we are sorry for the distress and disruption this caused.