Home / Business and Economy / Banks Fail Vulnerable: Basic Accounts Denied
Banks Fail Vulnerable: Basic Accounts Denied
7 Jul
Summary
- Financial regulator reports banks failing vulnerable customers.
- Banks pushed people to unsuitable online applications.
- Basic bank accounts are free and essential for many.
The UK's financial regulator has found that some of the nation's largest banks have failed in their duty to support vulnerable customers.
These institutions have reportedly steered individuals experiencing homelessness or financial hardship toward inappropriate online application processes, neglecting to offer them basic bank accounts. These essential accounts are provided free of charge, do not include overdraft facilities, and serve as a lifeline for those excluded from mainstream banking.
Following criticism from the Financial Conduct Authority (FCA) after a mystery shopping exercise rated a third of interactions as poor or very poor, nine UK banks and building societies have agreed to improve access. They have committed to providing the correct account from the outset and simplifying the process for customers lacking standard identification or a fixed address.
Basic bank accounts, used by over four million people in the UK, offer vital functions like accepting payments and enabling outgoing transactions via debit cards and direct debits. They are accessible to individuals with poor credit history or those undergoing debt recovery plans, and some banks work with charities to help homeless individuals verify their identity.
