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Some of the UK’s biggest banks are laughing at their most vulnerable customers, the financial regulator has revealed.
Banks are pushing the homeless or financially strapped into inappropriate online apps and away from basic bank accounts.
These accounts are free, involve no leverage, and provide essential banking services for those unable to open a master account.
Now, nine UK banks and building societies that operate basic bank accounts have agreed to make access to inquiries from the Financial Conduct Authority (FCA) easier.
Basic bank accounts have the same functions as a standard current account, but are intended for those who may be isolated from the banking system. More than four million people in the UK have these accounts.
They are offered by Barclays, The Co-operative Bank, HSBC, Lloyds Banking Group (including the Halifax and Bank of Scotland brands), National Building Society, Nat West (including the RBS and Ulster Bank brands), Santander, TSB and Virgin Money.
Features include:
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Accepting payments such as wages and benefits and allowing account holders to make payments via debit cards, direct debits and standing orders
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Free, but without useful utility
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It is available to those with bad credit, bankruptcy or an official debt recovery plan.
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Limited access to homeless people by working with charities to verify a person’s identity
But a mystery shopping exercise by the FCA rated a third of people’s experiences with basic bank accounts as poor or very poor.
The exercise involved 298 contacts through branch and telephone and found 28% of cases to be good or very good, 38% fair, 20% poor and 14% very poor.
Problems include not providing these accounts to the people who need them, especially those without fixed addresses.
In some vulnerable situations, it drives customers to online applications to open accounts that do not suit their needs.
