Basic Bank Accounts

hopelesswithmoney_2 · 3 May 2005 at 4:21PM

Hi there
I'm a debt adviser working for a charity.
Really struggling to recommend banks that will offer 'basic bank account' facilities to people with financial difficulties.
Despite not requiring a credit facility i.e. overdraft or cheque guarantee card more and more banks are either performing 'blanket' credit checks which excludes most people with debt problems or they are choosing to withdraw their basic bank accounts.
I can understand that there is no 'profit' to be made on basic accounts but surely they is a moral obligation to provide them otherwise it could be classed as 'social exclusion?'
I would love to hear from anyone who has had positive experiences with basic bank accounts either with banks or building societies.
Thanks
JB

virgin_moneysaver · 3 May 2005 at 5:58PM

my only experience is with the Natwest basic account - Step account - which is primarily for people with low/no income or only in receipt of benefits, & who have a limited credit score. This offers no overdraft or cheque book but they can have standing orders/direct debits & the basic solo debit card (but not a switch/maestro card)

jen_jen_2 · 3 May 2005 at 8:50PM

although banks do blanket credit checks they should not refuse the basic account on a failed credit check. most will refuse if fraud however. the basic account has to be offered by the banks because the goverment told them to. they dont like to publicise it or make it easily available because they dont like to have people use the accounts because they dont make money - call me cynical! The more ethical banks tend to have better policies regarding social exclusion, problems with id etc, try the Co-op

the banking code standards board has done some mystery shopping into this (i think it was them) and have concluded that the banks are improving, the problem i have found with the banks is that the same bank can behave differently depending on the branch.
I notice you are in the north west, is it Liverpool?

Str4berr3 · 3 May 2005 at 9:45PM

ohhh! now is that why natwest still has'nt rung me to arrange for a appointment to open a step account? and this is my second application....
because they cant be bothered.

jonesMUFCforever · 3 May 2005 at 10:18PM

Some banks do not conduct 'credit searches' for Basic bank accounts. They only check for electoral roll and for bankruptcy.
Next point I would like to make is that Banks are there to make a profit for their shareholders and serve their customers. You are right in saying that these accounts make no money for the banks but take up staffing resources to open and maintain them.
Perhaps you should lobby the Government who wanted benefits etc. to be paid into bank accounts to open up their own bank for this purpose.
Eric

ffs · 4 May 2005 at 4:55AM

I recommend Coop Basic Account. It was a struggle to open because of the address and ID checks (your address has match their database - not so easy if you live in a flat), but it has saved me hundreds of pounds in charges.

seese · 4 May 2005 at 7:34AM

My husband opened a basic account with the HSBC bank last September it has proved to be one of the best things in helping overcome our financial problems.

Debt_Free_Chick · 4 May 2005 at 7:56AM

The Financial Services Authority has a list of all the basic bank accounts on offer, including any restrictions e.g. where they won't open one for discharged bankrupt. It's here and there's a handy table at the back.

Often, these accounts are best opened in person, so that circumstances can be discussed openly. If you apply online, often "the computer says no" and no opportunity for a human to apply a little discretion.

I would suggest that you try and build a relationship with someone at a few selected banks - get to know someone and then you can always call them to discuss an individual account.

For bankrupts i.e. those who have literally just filed, then the Co-op (not Smile) and Nationwide seem to be particularly understanding.

fatbelly · 4 May 2005 at 8:27AM

A friend was in this position and got turned down by all the major banks. I suggested the Co-Op and they were very helpful. He now has a Cashminder account with them.

I don't think moral obligation cuts much ice with the big banks these days. It's profit, profit, profit.

frepol · 4 May 2005 at 10:42AM

You are right in saying that these accounts make no money for the banks but take up staffing resources to open and maintain them.

I'm sure they can just about afford it.

frepol · 4 May 2005 at 5:06PM

Next point I would like to make is that Banks are there to make a profit for their shareholders and serve their customers.

Fine, but the banking unions will be expecting us to be up in arms and in sympathy the next time one of the banks announces thousands of redundancies. I'll remind you then that banks are there to make a profit to serve their shareholders.

You are right in saying that these accounts make no money for the banks but take up staffing resources to open and maintain them.

Maybe preventing some of those redundancies? All businesses have a social responsibility - in the wider ecological aspect of the world. Maintaining a bank account so that mainly vulnerable people can be included in society and allowed to avail of discounts for DDs on their utilities and not having to carry around large amounts of cash is, and should be, the banks' contribution to this.

Basic Bank Accounts

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