What has Starling Bank said after stopping customers from opening savings accounts due to “eligibility criteria”?

A major British bank has come under fire for rejecting savings account applications from their own customers. Applicants to Starling Bank’s ‘Easy Saver’ account have found the process anything but ‘easy’ after being turned down without being given a clear reason.

On February 10 this year, the bank reduced its 3.25 per cent current account interest rate paid on money up to £5,000 to zero which led to customers wishing to open a savings account where they could continue to earn interest on their cash.

However, Starling customers have been taking to social media in their droves to complain about being rejected for a savings account although they know of no reason this would have happened and the bank giving no clear answers for the refusal.

Chris posted to Twitter to say: “Hello there, so do I need a special invitation to open a savings account with you? I don’t seem to have the option right now…”

Also posting on his twitter account, Adrian Cox said: “When you turn people down for a savings account, how can anyone save with Starling? Your explanation, I don’t meet your criteria. Please explain what your criteria is. In my opinion very poor service.

It seems many people who have been rejected are simply told they “don’t meet the criteria” leaving customers in the dark. A statement released by Starling Bank doesn’t make things much clearer either.

A spokesperson said: "Although we have approved tens of thousands of Easy Saver applications since soft launching in November, we have had to decline some too in line with certain eligibility criteria. We are sorry about any inconvenience this causes, and we are working hard to open as many accounts as we can.

"We are currently subject to certain constraints around opening new accounts... The decision to decline an Easy Saver application may well be a result of the constraints, not an individual’s circumstances."

And their terms and conditions also shed no further light on the matter either. In the section headed “Who can open an Easy Saver”, it says: “To open and hold an Easy Saver, you must: Be 18 years old or older; Be a resident in the United Kingdom and hold the right to reside in the United Kingdom; Have an open personal current account in British pounds with us; Only use the account for personal purposes.”

However, the bank’s “constraints” regarding opening new accounts could be connected with “failings” highlighted last year. In October 2024 Starling Bank was fined £29 million by the UK’s financial watchdog for failings over its financial crime screenings, which the regulator described as “shockingly lax”.

The Financial Conduct Authority (FCA) said the bank “left the financial system wide open to criminals and those subject to sanctions”. Starling had only been screening customers against a fraction of the full list of those subject to financial sanctions, the FCA found. It also repeatedly breached a requirement not to open accounts for high-risk customers.

Some 54,000 accounts were opened for 49,000 high-risk customers between September 2021 and November 2023, according to the watchdog’s investigation.

Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said at the time: “Starling’s financial sanction screening controls were shockingly lax. It compounded this by failing to properly comply with FCA requirements it had agreed to, which were put in place to lower the risk of Starling facilitating financial crime.”

Starling accepted that failings said it has introduced “extensive additional safeguards” to ensure it complies with regulatory requirements, which may now mean the bank is being over zealous with application criteria, or instead redistricting the number of new accounts it opens at any given time.