Consumers need trustworthy banks that deliver the services they need

Banks need to abandon self-serving cultures and focus on providing competitive banking services for all, says Citizens Advice as the Parliamentary Commission on Banking Standards publishes its final report.

Citizens Advice Chief Executive Gillian Guy said:

“For too long banks have failed to provide day to day banking services to everyone. The payday loan industry has thrived as banks failed to offer responsible short-term credit. The poorest have been shut out of every day banking due to restrictions on basic bank accounts, leaving them unable to receive wages or save money by paying bills through direct debit.

“We need a revolution in banking that puts the needs of customers first and creates an industry that people can trust. Banks can look to profit from saving their customers money money as opposed to selling them unsuitable products.

“In some cases taxpayers have been propping up banks that reward failures and don’t provide the services customers need. The Parliamentary Commission on Banking Standards is right to call for better functioning and a more competitive banking industry, after its report revealed fundamental flaws.

“The Banking Commission’s step to get banks to agree to a minimum standard for basic bank accounts will stop the dumbing down of accounts. But we’d like to see these measures introduced by October this year, in order to support the introduction of Universal Credit where people will need a bank account to receive benefits.”

Citizens Advice wants the following minimum standards for basic bank accounts:

• open to anyone who wants one
• access to the entire LINK cash machine network
• unrestricted bank branch counter access
• the ability to deposit and withdraw money from the Post Office network, as well as to check account balances
• a debit card to give greater sense of inclusion, enable use of cash back and allow account customers to make purchases on the internet or phone
• a buffer zone*
• limits on level and incidence of charges, including some form of overall cap
• assistance when opening the account about ‘making the most of the account’ (for example, considering whether to set up direct debits and how to time the payment of these)

*A buffer zone is essentially a very small temporary overdraft of around £10 or so. The idea is to ensure account customers still have access to their cash via a cash machine which dispenses £10 notes if they only have, say, £6 in their account.

Citizens Advice report ‘Called to account’ (July 2010) exposed the experiences of undischarged bankrupts who are explicitly excluded as customers by almost all banks, also noting a worrying move to exclude people with Debt Relief Orders, with banks treating these customers as if they were undischarged bankrupts.

Notes to editors:

1. The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
2. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
3. To find your local bureau in England and Wales, visit citizensadvice.org.uk. You can also get advice online at adviceguide.org.uk
4. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers
5. Citizens Advice Bureaux in England and Wales advised 2.3 million clients on 5.4 million problems from October 2013 to September 2014. For full 2013/2014  service statistics see our quarterly publication Advice trends
6. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 3,000 service outlets across England and Wales.