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Nationwide frozen student account

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I was wondering if I could get some advice. I opened a student account with Nationwide a couple of months ago and have used it for a couple of daily living expenses. The first student loan payment is due to go into the account in August.

This is my first year at university and prior to this, worked full time. 


I received a tax rebate from HMRC of around £1000, this was sent to me as a cheque. I deposited the cheque into my Nationwide account and it was promptly frozen. I had been trying to access my banking app for a number of days however it simply showed the message 'you have no current accounts with us'. I couldn't use my debit card so contacted Nationwide who initially refused to tell me anything.


After a lengthy discussion with customer services, I was informed that the account had indeed been frozen (as opposed to my initial worry that someone had accessed my account) but I could not be told why, who made that decision or when it would be reviewed.


Further complaint revealed that I could be contacted up until the end of this month (making that around 4 weeks since freezing the account).

I was told, if possible, to visit my local branch.


I went into my local branch the same day and took the letter from HMRC that the cheque came with, the receipt from the bank where the cheque was deposited and my ID. The bank manager contacted whichever department at Nationwide and explained the situation.


He was told that my account would not be unfrozen and I was told to wait until the fraud team contact me.

Whoever he spoke to on the phone then seemed to suggest that it was against their student account terms and conditions for me to work.

I had to answer questions about the hours I worked before I highlighted the fact that the rebate is from the previous tax year and had nothing to do with my current, full time university student status (which required proof upon opening the account).


I made a complaint to customer services in the initial phone call, stating that I was unhappy to not be contacted (only realising when my debit card did not work) and that initially, customer services wouldn't even confirm that my account had been frozen. 


I've now received contact from the complaints department who began the phone call with 'we will not uphold your complaint because we've followed our terms and conditions'.


Any suggestions for what I should do next?

I've been left without a current account and a suggestion that I have done something wrong, simply for depositing a HMRC issued cheque. 

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No direct answer for you I am afraid but their actions are surprising. Although banks can and do question unexpected large payments into bank accounts (large relative to what usually comes in) you wouldn't expect a payment from HMRC to be considered a suspicious transaction under money-laundering rules. And you've done the right thing, gone into branch with ID and proof of the source of the payment. Hopefully they will soon unfreeze your account.Sady in all banks local managers have virtually no say in what happens, it's all down to head office fraud and money laundering team.


Their suggestion that student accounts don't allow you to work is surely nonsense. The requirement in their t&c is that you must be on a full time course, not that you can't work as well. Their t&c say " You must be aged 18 or over and studying on a full-time UCAS registered course of two or more  years’ duration...". Nothing in the t&c about not being allowed to work as well, they made it up. It would be a strange student a/c that said you couldn't work ever - Nationwide must know  that most students need to take part-time/holiday jobs to pay their way through university (and have done for as long as student accounts have existed - at least 50 years!)

Edited by Ethel Street
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