The UK Government has recently published significant changes in the regulations governing the termination of contracts for payment services provided by payment service providers (PSPs). These changes are particularly aimed at addressing concerns arising from instances of “de-banking,” where customers have had their bank accounts or payment services terminated due to their personal or political beliefs.
The policy note, released by Her Majesty’s Treasury (HMT) on March 14, 2024, outlines the amendments proposed in the draft statutory instrument known as ‘The Payment Services and Payment Accounts (Contract Terminations) Regulations 2024′.
The primary objective of the reforms is to provide greater protection to consumers and other users of payment services against unjust termination of contracts by PSPs. Emphasizing the importance of safeguarding customers’ lawful freedom of expression, the reforms prohibit the termination of payment service contracts solely based on a customer’s personal or political beliefs.
While the prohibition on terminating payment services due to freedom of expression already existed, these reforms seek to reinforce and strengthen this stance. The policy note provides insight into the reasoning behind the proposed changes, particularly in response to recent incidents of ‘de-banking’ and concerns regarding the arbitrary termination of accounts.
These regulatory amendments reflect the UK Government’s commitment to ensuring fairness and transparency in the provision of payment services. By explicitly prohibiting the termination of contracts based on customers’ lawful expression, the reforms aim to uphold fundamental rights while promoting trust and confidence in the financial system.
