High street bank NatWest has apologised after threatening to close a Holocaust education charity’s account, which it said was an “unfortunate error”.
Yad Vashem UK chair Simon Bentley told Civil Society that he received a letter from NatWest last month, saying that the charity’s account would be “debanked” for three months, but was not told the reasons why.
He said the “algorithm-based standard form of a letter” told the London-based charity, which had banked with NatWest for around 15 years, to make its arrangements elsewhere.
Bentley said NatWest has since apologised to the charity for the closure, after reports in the Daily Mail, and made a “modest” donation.
The Charity Commission welcomed NatWest’s reversal of its decision to close Yad Vashem UK’s account but said there continues to be “widespread problems” in the way banks engage with charities.
NatWest: ‘We are extremely mindful of the upset caused’
Bentley said he would be speaking to NatWest for further information on why it had mistakenly been sent the original letter but his charity, which most recently reported an income of £579,000, is not planning to switch banks as a result.
“How could such a decision be made if it results in a Holocaust educational UK-registered charity having its bank account closed?” he said. “What controls are in place, as far as they’re concerned?
“I will raise all sorts of questions, frankly, not just for the sake of Yad Vashem UK but also for all other smaller charities.
“Banks are not welcoming these forms of new accounts so easily. So it would be a big problem for us if suddenly we have to run around to open the new account.”
A NatWest spokesperson said: “We have apologised to the customer for this unfortunate error and are very happy to continue to bank Yad Vashem UK.
“We are extremely mindful of the upset caused and we are working hard to ensure that something similar does not happen again.
“We are proud to support a broad range of charities and are extremely disappointed when our customer service levels fall short.”
Commission calls for sector improvements
Many other charities have reported issues with banks in past months, including several which have also had their accounts closed.
Banking trade association UK Finance recently launched a website to support charities opening and managing bank accounts after many reported experiencing difficulties with financial services.
A Commission spokesperson said: “There are widespread problems in the way banks engage with their charity customers, with two in five trustees saying they’ve had poor service in the previous 12 months.
“This can have a significant impact on charities – and place undue stress on trustees who have volunteered their time to do good.
“We’re pleased to hear NatWest has reversed its decision but progress more widely by banks in supporting their charity customers is not happening fast enough.
“Charities provide vital support to people across the country and deserve better, so we continue to press this matter and continue to engage with the Treasury, FCA, high-street banks, and the charity sector.”
The regulator also criticised the banking sector’s response to its calls for improvements after 42% of trustees reported experiencing bad service in the past year.
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