Debanking Rules 2026: 90-Day Notice, Reasons and the AML Exceptions

When a bank or payment provider closes an account because of financial crime concerns, the customer often gets little notice and no explanation. New UK rules that came into force on 28 April 2026 change that for many accounts, while keeping the exceptions that anti-money laundering (AML) compliance requires. This guide explains how the rules work, based on the text of the Payment Services and Payment Accounts (Contract Termination) (Amendment) Regulations 2025 (SI 2025 No. 688) and a law firm summary. They apply to payment providers and banks, not to accountancy firms, but they matter for any professional who advises clients on banking problems, handles client money or works in financial crime compliance. This is general information, not legal advice.

What the regulations do

The regulations were made on 12 June 2025 and came into force on 28 April 2026. They apply to payment service providers (PSPs) under the Payment Services Regulations 2017. Separate amendments to the Payment Accounts Regulations 2015 apply to designated credit institutions. The new termination rules in regulation 51B cover framework contracts concluded for an indefinite period and entered into on or after 28 April 2026. Contracts entered into earlier stay under the old rule, which keeps the two-month notice period where the contract provides for it. The law firm TLT's summary adds that the rules cover payment services under framework contracts, including e-money accounts and merchant acquiring.

The core protections

• 90 days' notice. For covered contracts, the PSP must give at least 90 days' notice before termination takes effect, instead of the previous two months. A shorter period applies only in the cases listed below.
• Reasons. The notice must explain the reasons in enough detail for the customer to understand why the contract is ending. Reasons need not be given where providing them would be unlawful.
• Complaints. The notice must explain how to complain to the provider and state the customer's right to complain to the Financial Ombudsman Service.
• No contracting out. Discharge by agreement cannot be used to avoid the main requirements.

The AML and crime exceptions

The 90-day notice requirement does not apply in several situations, which regulation 51C lists. The ones most relevant to financial crime compliance are:

• where the PSP must apply customer due diligence under the Money Laundering Regulations 2017 but cannot do so;
• where the PSP has reasonable grounds to suspect that a service has been, is being or will be used in connection with a serious crime, which the regulations define by reference to the Serious Crime Act 2007 and equivalent conduct elsewhere in the UK;
• where the FCA, the Treasury or the Secretary of State requires termination;
• where a payment account must be closed under section 40G of the Immigration Act 2014; and
• where the PSP reasonably believes the customer has engaged in, or is likely to engage in, an offence while supplying goods or services to a third party, and a service under the contract was used in connection with that conduct.

Regulation 51D separately removes the minimum period where the customer's conduct towards staff amounts to certain public order or harassment offences, or where the customer gave incorrect information at onboarding and the PSP would not otherwise have entered the contract. In those cases notice must be given without delay after the decision to terminate. If another legal requirement conflicts with these rules, the other requirement prevails to the extent of the conflict.

How this fits with tipping off

One tension is obvious. A bank that closes an account because it has filed a suspicious activity report cannot say so, and the rules recognise that reasons need not be given where that would be unlawful. For more on what can and cannot be said to a customer, see our guide to suspicious activity reports and tipping off. The practical result is that customers may still receive limited explanations in the cases that matter most.

What it means for firms and advisers

1. If you advise clients, explain that new accounts opened after 28 April 2026 carry stronger notice and explanation rights, but that exceptions exist and older contracts may still be on the two-month rule.
2. If you hold client accounts, check your own banking terms and contingency plans. An account closure can disrupt client money handling quickly where an exception applies.
3. If you work in compliance at a provider, record the basis for any termination, including which exception applied, so you can show it later. Our guide to client risk rating, acceptance and exit covers the same discipline for professional firms.
4. Keep onboarding information accurate. Incorrect information at onboarding is itself an exception to the minimum notice period.
5. Do not use exit as a shortcut. If due diligence cannot be completed, the exception applies, but you should still document what you asked for and why it could not be obtained. See KYC and customer due diligence for accountancy practices.

Frequently asked questions

When did the new rules take effect?

28 April 2026, for framework contracts entered into on or after that date.

How much notice must a provider give?

At least 90 days for covered contracts, unless an exception applies.

Can a provider close an account without notice if it suspects crime?

The 90-day requirement does not apply where the provider has reasonable grounds to suspect a service is being used in connection with serious crime, or cannot complete customer due diligence, among other cases.

Do the rules apply to my existing account?

Contracts entered into before 28 April 2026 remain under the earlier rule, which keeps a two-month notice period where the contract provides for it.

Do they apply to accountancy firms?

No. They apply to payment service providers and designated credit institutions. Accountancy firms have their own client acceptance and exit obligations under the AML regime.

Next steps

Read the regulations on legislation.gov.uk if you need the exact wording, and check the terms of any account you rely on. To keep building your financial crime knowledge, explore Learnsignal's CPD courses.