All my accounts were shut down when TSB labelled me a ‘fraudster’ instead of the victim | Money

I have been very badly treated by TSB, even though I have never been a customer. It mistakenly placed three fraud markers against my name, which prompted my bank, Santander, to close all five of the accounts I held with it. This has caused significant financial problems since direct debits and standing orders failed, and I was unable to start a planned house extension. TSB has not responded to emails and letters since this happened eight months ago.

I have complained to the Financial Ombudsman Service, but because I am not a TSB customer, it can’t investigate.

RL, London

Your saga is a frightening reminder of how financial security can collapse overnight because of a stranger’s butterfingers. Even more alarming is how dilatory the companies involved can be in putting things right.

Your four savings accounts, and one current account, were summarily shut by Santander with whom you’d banked for years. Your credit record appeared in rude health and Santander refused to tell you why it had so suddenly taken against you.

You had to transfer the funds to the business account you hold with another bank, and feared that that would be axed, too, if the latter got wind of your unknown offence, leaving you unable to trade or eat.

You had just applied for a Santander mortgage to fund a home extension and, since you assumed that this would be declined, you had to cancel the job. It took you six weeks and a Data Subject Access Request (DSAR) to both banks to discover what was going on.

Back in 2021, a TSB account had been fraudulently opened in your name. TSB had thanked you for your cooperation with its investigation, then erroneously reported you to the National Fraud Database for three attempts at fraud. Then the fraud markers lay undetected on the database until Santander offered you a higher interest savings account. When you applied, its credit check identified the markers and your accounts were closed.

Bizarrely, though, your mortgage application was subsequently accepted. By then, your builder was booked up till winter and you had to spend Christmas without a functioning kitchen.

This also left you making repayments on a loan months before you had actually needed it.

TSB initially insisted to you, despite DSAR evidence, that it had recorded you as a fraud victim rather than a fraudster. You had to threaten it with a complaint to the Information Commissioner’s Office before it took you seriously, admitted human error, promised to remove the markers and offered you £250.

That was the last you heard. You have no way of knowing if the fraud markers are still in place since those on the National Fraud Database are only visible to victims of fraud, and TSB had logged you as a perpetrator.

You therefore dared not apply for any new bank accounts and lived in fear that Santander would recall the mortgage it had so mysteriously loaned.

Both banks jumped to when they saw a headline coming. Santander, which should have questioned the fraud markers before withdrawing its services, promptly reopened the accounts, refunded £223 in lost interest, and offered £150 compensation, which you – and I – consider paltry given the stress and hardship caused. It says: “We’re sorry that a human error meant RL’s accounts were incorrectly linked to a fraud marker that was placed ­incorrectly by another bank and then closed.”

TSB tells me: “We apologise for an administrative error that caused us to incorrectly apply fraud markers against RL.”

It says it would increase its £250 offer if you sent proof of expenses, although, when you initially tried to do so, it refused, citing the ombudsman’s final decision as though it had been vindicated. In fact, the ombudsman was unable to investigate as, though wronged, you were not a customer.

Santander has also refused to budge, declaring itself “comfortable” with its munificence. You will have to go back to the ombudsman with a complaint against Santander if you want the latter’s offer increased.

You say: “We are all so utterly dependent on the banking industry, we cannot live without a bank account, cannot run a business, or pay a bill or keep a roof over our heads.

“Santander and TSB between them made 2024 an extremely difficult year for me. And because they have refused to engage with me, it has taken nine months, and the involvement of a financial journalist, to find out why it all happened.”

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