Group of claimants expected to seek at least £1.5m in damages over account suspensions Metro Bank is also facing a US class action suit over an accounting blunder on its loan book. Photograph: Beretta/Sims/Rex/Shutterstock Embattled lender Metro Bank has been hit with a fresh lawsuit by a group of Iranian customers who say their accounts…
Group of claimants expected to seek at least £1.5m in damages over account suspensions
Embattled lender Metro Bank has been hit with a fresh lawsuit by a group of Iranian customers who say their accounts were unfairly suspended without notice or explanation.
The group of 17 claimants, who are expected to seek at least £1.5m in damages, include dual British-Iranian citizens, Iranian citizens living in the UK and several UK-based businesses including an engineering firm and a consultancy.
Law firm Ronald Fletcher Baker said its clients were blocked from accessing their accounts and cash between May and September 2019 without notice and without explanation. It first contacted Metro about the issue in July and served the bank with legal papers last week.
Rokhsareh Vahid, a sanctions and banking specialist at the law firm, said: “Our clients are all UK residents and they have made it clear to Metro Bank that they did not use their accounts in an unlawful or illegitimate manner.
“Metro Bank has not alleged that any of the claimants were involved in any illegal or illegitimate activities and it has released the restrictions on some accounts during this process, which effectively confirms that our clients were not involved in any wrongdoing,” she added.
Vahid said her clients suffered financially and one business had been forced to lay off staff after its accounts were restricted for nearly two months.
She said: “One can imagine how difficult it would be for individuals to meet their financial responsibilities when their account is suddenly restricted without an explanation and the restriction continues for so long.”
The legal threat is the latest headache for Metro, which is also facing a US class action suit over an accounting blunder on its loan book between March 2018 and May 2019. It was filed after the lender revealed the error involving the misclassification of £900m of loans as less risky than they were. The lender is awaiting the result of a regulatory investigation linked to the error. Metro Bank has said that it plans to vigorously defend itself against the class action.
Metro is also reviewing its compliance controls after breaching US sanctions in Iran and Cuba between 2017 and 2019. There is no evidence to suggest that the breaches and the account suspensions referred to in the latest lawsuit are related.
Commenting on the fresh lawsuit, a Metro Bank spokeswoman said: “Metro Bank takes its responsibilities, in line with UK regulations, to ensure the integrity of the UK financial system and protect it from financial crime, very seriously. Metro Bank will defend itself vigorously should this go any further.”
Any potential trial is expected to take place in mid-2021.