Banks rapped by MPs

UK BANKS could be wrongly labelling customer accounts as a fraud risk to cover up concerns about costs and their reputation, a group of MPs have argued in a study into debanking.

Some customers are being "wrongly categorised" and left in the dark when their accounts are shut down unexpectedly, they said.

The report, produced by the AllParty Parliamentary Group on Fair Business Banking, argued that banks are more driven by profit and reputation, rather than tackling financial crime, when they decide to debank a customer.

It means that certain ethnic, industry or political groups are being "frozen out" of the UK's banking system, the group said.

This is because their accounts can be problematic for a bank if they are perceived as higher risk, such as cryptocurrency firms, jewellers, bookies and politicians, according to examples given by the MPs.