Coutts accused of breaching client confidentiality in row over family finances
Coutts has been accused of breaching client confidentiality and data protection rules in a row over a family’s finances, raising further questions about controls at the embattled private lender.
The bank is alleged to have shared details of a customer’s finances with a relative who was not authorised to obtain the information, The Telegraph understands.
The case centres around a family dispute in which the Coutts customer’s daughter, who had ultimate power of attorney over her father’s financial affairs, did not consent for her estranged brother to receive information from Coutts about the account.
The row started when the woman attempted to close her father’s account at his request but the bank refused.
As the row escalated, the lender increasingly dealt with the woman’s brother, who was allegedly not authorised to access or control his father’s financial affairs without his sister’s prior consent, according to the terms of the power of attorney.
Coutts then attempted to hold meetings with the man without the woman’s knowledge, it is claimed.
In a complaint to Peter Flavel, the then chief executive of Coutts, in 2021, the woman said: “You were sharing confidential and personal information with [my brother] which is a clear breach of confidentiality.”
The letter, seen by The Telegraph, added: “The bank has tried to organise meetings with [my brother] to exclude me from my ongoing obligations towards my father as his attorney.”
The woman alleged that the bank’s treatment of her amounted to gender discrimination.
The case is likely to raise further questions about controls and procedures at Coutts, which has been at the centre of a de-banking scandal following its decision to shut Nigel Farage’s accounts.
The row began in June after Coutts, which is owned by NatWest Group, said it would close the former Brexit campaigner’s account with little notice.
It was later revealed that Coutts shut Mr Farage’s accounts because his views did not align with the bank’s “values” and were at odds with its “position as an inclusive organisation”. It also claimed that he was seen as “xenophobic and racist”.
Dame Alison Rose was forced to resign as chief executive from the FTSE 100 lender last month after admitting to being the source of an inaccurate BBC story that Mr Farage’s Coutts account had been closed for commercial reasons. Mr Flavel also resigned over the scandal.
Meanwhile, the woman involved in the family dispute case accused Coutts of breaching data protection rules and withholding information from her when she made a so-called subject access request.
Customers have the right to request information held about them using a subject access request, which is how Mr Farage received the dossier detailing why he was de-banked.
In telephone conversations with the bank, reviewed by The Telegraph, the woman’s brother stated that he was told by Coutts it was considering reporting her to the Court of Protection, in an apparent breach of data protection rules.
Senior bankers at Coutts also tried to obtain personal information about the woman by asking her brother about her marital status and whether she had children, according to the telephone conversations.
The woman also alleged Coutts withheld information from her after she made the subject access request.
She later received previously undisclosed information regarding her case with Coutts through the Financial Ombudsman, including the recordings of the telephone conversations.
Coutts’ decision to close Mr Farage’s accounts has been heavily criticised by the Government, with ministers vowing to crack down on banks unfairly kicking out customers.
Last week, Jeremy Hunt, the Chancellor, told the City watchdog to conduct a wide ranging review and fine lenders that blacklist customers over their political views.
In a letter to Nikhil Rathi, chief executive of the Financial Conduct Authority (FCA), Mr Hunt ordered the watchdog to launch an urgent review into de-banking to establish how widespread the issue is.
He said: “The Financial Conduct Authority has the right to fine banks very large sums of money if they find this practice is widespread.
“I want to know if it is, and I want to know what they are doing about it.”
Last month, the Government announced new laws that will force banks to give customers at least 90 days’ notice if they want to close their accounts, as well as a clear explanation for the termination.
NatWest has launched an independent review into Coutts, which will review account closures at the lender over the past two years.
Coutts was contacted for comment.