No pledge from government to take action against banks on basic bank accounts

Citizens Advice is disappointed the Government has not pledged to take action against banks if they can’t agree on minimum standards for basic bank accounts within 12 months. The charity has also warned that the implementation of Universal Credit is at risk if claimants can’t access a bank account.  

The Parliamentary Commission on Banking Standards recommended that banks should voluntarily agree to minimum standards for basic bank accounts within 12 months, and if unable, the Government should force their hands.

Gillian Guy, Chief Executive of Citizens Advice, said:

”It is very disappointing that the Government has not pledged to take action against banks if they can’t agree on minimum standards for basic bank accounts.  For too long, some of the poorest people have been shut out of everyday banking as banks refuse to give them a basic bank account or dumb down their accounts to deter customers.  

“It is absolutely essential that everyone can get a bank account so that they can receive wages, save money by paying by direct debit and have easy access to their cash; this is a matter of urgency.  It’s vital, for the success of Universal Credit, that basic bank accounts are available to all before the roll-out of the new scheme which starts in October.

“The future of basic bank accounts is at risk of falling to pieces if some banks continue to hide their basic bank accounts from customers meaning other banks pick up a greater share of the market.

“Banks need to focus more on providing the services consumers need.  Bonuses rewarding bad behaviour and the PPI mis-selling pandemic has left consumer trust in banks in tatters so it’s essential government paves the way for a transformation in the culture of our banks.”

Citizens Advice wants banks to agree on the following minimum standards for basic bank accounts:

Make sure that identification requirements do not create barriers to opening a basic bank account

A commitment to provide basic bank account holders with the following:

• ability to make a full range of electronic payments
• access to the entire LINK cash machine network
• same access to branch counters as current account customers
• the ability to deposit and withdraw money from the Post Office network, as well as to check account balances
• a debit card to enable use of cash back and allow account customers to make purchases on the internet or phone
• assistance when opening the account about ‘making the most of the account’

Basic bank accounts must available to those who want them in time for the roll out of Universal Credit.

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.