Member Article

Banks Failing Low Income Customers

Many of the UK’s low income citizens are being denied access to a bank account or unfairly penalised when they open one, according to a new report by the Citizens’ Advice Bureau. The report – Banking Benefits - is based on evidence from nearly 300 Citizens Advice Bureaux. It suggests that banks are “paying lip service to helping their most vulnerable customers” while in reality failing to meet their needs. The charity accuses banks of putting “put unreasonable obstacles in the way of people opening accounts, insisting on certain forms of ID, or failing to provide any information about basic accounts.”

Citizens Advice Director of Policy Teresa Perchard said: “These days a bank account is absolutely essential to function in everyday life, yet one in 12 households – 2.8 million adults - in the UK still don’t have one. Many of the most vulnerable are denied access to a bank account in the first place, or unfairly penalised when they open one. Our evidence shows that the consequences and costs of this can be severe, including escalating debt and the threat of homelessness. “Banks have made commitments to offer basic bank accounts but there is still a very long way to go to meet their ambitious target of halving the number of people without bank accounts by the end of 2006. The issue of access to bank accounts has become all the more urgent with the Government’s announcement that from 2010 it will no longer fund Post Office Card Accounts, which are currently used to pay pensions and benefits to around four million people. At the moment many banks are just paying lip service to financial inclusion. Our recommendations can help them make it a reality.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .