For many Australias, loyalty is a value they hold dear, especially towards financial institutions.

Customers, regardless of age, expect the same in return—a relationship built on trust, transparency, and mutual respect.

That's why this customer's story struck a chord with many, especially those with long-standing businesses with their banks.

Brooke, a young mother on maternity leave, had been receiving regular paychecks from her partner, a United Kingdom native who had turned into an Australian citizen.

The couple had been diligently managing their finances with the bank.

However, they were left in a state of disbelief after receiving a phone call that would shake both of them.

Brooke and her partner have been using Commonwealth Bank's services for ten years. Image Credit: Pexels/Mikhail Nilov

They were informed that almost all of their family's accounts would be closed by 31 May, without any given explanation.

Brooke and her partner suddenly faced an unexpected and distressing situation.

They could not fathom why their accounts, shared accounts, and credit cards were being targeted for closure.

The only account left untouched was their car loan, which continued accruing interest.

Brooke's partner initially suspected it was a scam and contacted the bank for clarification.

'This was out of the blue,' Brooke shared.

'My partner called them thinking it was a scam, but they told him it was real, and they gave no reason why.'

The accounts were also blocked within days, which left Brooke and her partner unable to purchase anything.

Brooke's partner tried to appeal the bank's sudden blocking.

'He called them back and they released the block, but said they weren't obliged to tell us why the accounts were being closed,' they followed up.

The couple received a letter which listed their affected accounts.

However, Commonwealth Bank still did not explain their situation.

The lack of transparency left Brooke and her family scrambling to switch banks and reorganise all their direct debit payments.

The incident raised essential questions about customer rights and the banks' obligations towards their users.

According to the Banking Code Compliance Committee, Australian banks reserve the right to close a customer's account, as this is typically outlined in their terms and conditions.

Reasons for account closure could range from dormant accounts to legal concerns such as suspected fraudulent activity or money laundering.

The committee recommended that banks should provide a list of reasons and notify customers directly when closing accounts.

However, the above-mentioned is not a requirement.

Customers who believe that their accounts have been closed in error may consult the Australian Financial Complaints Authority (AFCA).

AFCA acknowledged that while it is helpful for a financial firm to explain an account closure, there can be valid reasons for withholding this information.

In such cases, AFCA may still find the financial firm's actions reasonable.

In response to the incident, a Commonwealth Bank spokesperson stated that decisions to close accounts are made on a case-by-case basis.

'We consider a number of factors before taking the careful decision to close a customer's account, and we ensure we inform the customer of that closure decision,' a Commonwealth Bank spokesperson said in a statement.

'While we appreciate some customers want more information in relation to account closure decisions, there are limitations on what can be shared, which include our regulatory and legal obligations.'

Brooke's story should serve as a reminder that even loyalty could be overshadowed by financial institutions' opaque policies.

It underscored the importance of understanding a bank's terms and conditions and knowing everyone's rights as consumers.

It's a good idea to keep a close eye on bank accounts and to maintain open communication with banks to avoid any unwelcome surprises.

Key Takeaways

• A couple of long-term Commonwealth Bank customers were rattled after being informed their accounts would be closed.
• The closure notification came without an apparent reason, which left her family in uncertainty.
• The couple faced an immediate impact with account blocks and the necessity to switch banks.
• Banks, including Commonwealth Bank, reserve the right to close accounts but may not always provide an explanation, which could be challenged by the Australian Financial Complaints Authority (AFCA).

Have you ever experienced a sudden account closure from a banking institution? How did you feel about it? Share your experiences and thoughts about Brooke's situation with us in the comments section below.

 

[Soxylox]

They should have had to explain why the account was being closed and what happens with the money still in said account. This is going to cause a stir and they may lose quite a few customers too.

 

[Luckyus]

My bank recently put a block on my debit card due to a suspicious transaction.
Whilst I was grateful for their due diligence it would have been appreciated if they had let me know when this happened rather than later when I rang them to find out why my card had been rejected at the supermarket, which was very embarrassing.
This happened prior to Easter now causing a long delay in getting a new card due to the public holidays.

Another reason why I only use cash!

 

[Hovis]

I feel that tthe couple had every right to know why their accounts were closed. I bank with the Commonwealth and I wonder if other banks have such policies of non-disclosure. My first thought is that the banking ombudsman should do the right thing by their customers/clients and bring the banking fraternity to task on this issue ie it is their money - borrowed or otherwise - and hence have a RIGHT to know what is happening to their account. Cheers Dave

 

[Radiant]

Very disturbing. Especially not given a reason for closing. And concerning that it can happen and you just have to accept that decision

 

[Radiant]

Very disturbing. Especially not given a reason for closing. And concerning that it can happen and you just have to accept that decision

And why I like using cash instead of relying on the Bank all the time They don’t give me anything but they use my money for various reasons

 

[Radiant]

I feel that tthe couple had every right to know why their accounts were closed. I bank with the Commonwealth and I wonder if other banks have such policies of non-disclosure. My first thought is that the banking ombudsman should do the right thing by their customers/clients and bring the banking fraternity to task on this issue ie it is their money - borrowed or otherwise - and hence have a RIGHT to know what is happening to their account. Cheers Dave

Quite agree and why has the recommendation to disclose reasons not been actioned?

Must be something else going on that we don't know about.

my bank (Westpac) refused to bank my cheque and made me use the machine. I felt that I should not have to do this but if I wanted it to go in I had no option but to comply. I’m fed up with queues and few tellers to assist me. I don’t feel safe handling the machines