Lloyds cracks down on laundering by freezing 8,000 Jersey accounts

Lloyds Banking Group has reportedly frozen 8,000 Jersey-based offshore bank accounts following a crackdown on money laundering, with the account holders having failed to prove their identities.

The Financial Times said the bank had spent three years chasing the relevant customers for information such as certified copies of identification documents, with staff often working 12-hour days to cope with the issue.

"Unfortunately, where a customer has not provided us with this necessary information we have had to freeze their account until we get the information. This is also to protect the customer, as it prevents anybody else trying to use the account if the customer has stopped using it or has moved address," a spokesperson for the bank told the FT.

Lloyds' international business provides consumer and private banking services and financial advice for Channel Island residents and expatriates and, while Lloyds has not released official figures, reports suggest that less than 5% of its total number of expatriate accounts were frozen.

The bank had been forced into action in late 2018 in order to adhere to money laundering rules in Jersey, where its international business is based.

Earlier this month, Jersey Financial Services Commission proposed further strengthening measures to its local anti-money laundering requirements after a year-long consultation, with authorities on the island having faced pressure from transparency campaigners.

Meanwhile, HSBC, Barclays and Royal Bank of Scotland have also reportedly tightened controls in Jersey following recent money-laundering scandals on the European mainland hit continental lenders such as Danske Bank and ABLV.