Cancellation & Disputes

When you open a joint account, each account holder has equal access to the account and equal rights to make deposits and withdrawals. It is vital that the account holders trust one another, and that each holder agrees to act fairly regarding the account. If you have any doubts about the suitability of a joint account for you, do not open one. Some banks and building societies offer joint accounts where every account holder must authorise each payment made when it exceeds a certain limit: these accounts are often known as 'all to sign' accounts. However impractical this approach may seem at first, it does ensure that noone can make a large withdrawal from the account, or authorise huge payments from joint funds, without the agreement of the other account holders.

However, if a dispute arises betweent the account holders, or one or more holder wishes to cancel the account, notice must be given to the banking institution. Usually, when the bank or building society is aware that there is a dispute or cancellation services will either be withdrawn or suspended, and/or every account holder will be required to authorise each withdrawal and payment.
However, it is at the discretion of the bank or building society whether or not they choose to freeze an account on notice of an account holder dispute. If the bank or building society chooses to keep the account open without restraints, each account holder remains liable for the operation of the account and any debts incurred, and each holder retains their right to authorise withdrawals and payments from the shared funds. For example:

Kayleigh and Mike rent a flat together and decide to open a joint account to enable them to pay bills automatically. Kayleigh and Mike both agree to make equal monthly deposits into the account, and authorise the bills to be paid via direct debit from the shared funds. A few months later, Mike becomes redundant but fails to tell Kayleigh that his situation has changed. He stops making monthly deposits to the account. Kayleigh views the account balance and notices that Mike has stopped making regular deposits: the bills still need to be paid.

• The financial institution which operates the joint account on Mike and Kayleigh's behalf would not intervene: this is a private dispute between the account holders.
• Kayleigh and Mike could authorise closure of the account, and find an alternative way to pay their bills.
• Kayleigh could keep the account open if she is confident that Mike will be able to continue making deposits in the near future.
• Kayleigh can contact their creditors if she is worried about paying the bills alone, and inform them of the situation. She may be able to negotiate lower payments.
• Kayleigh and Mike can request an overdraft facility from the banking institution which operates the joint account, to help them manage their finances.
• Kayleigh and Mike can also contact the local job centre and a local debt management advisory service, such as the Citizens Advice Bureau, to find employment and a financial compromise.

It is important to note that for complete closure of a joint account, all account holders must agree to the decision and each sign a form which authorises the account to be closed.