MSE News: Banks urged to offer basic accounts to bankrupts

Former_MSE_Guy

This is the discussion thread for the following MSE News Story:

"Citizens Advice is calling on current account providers to treat people in severe debt fairly ..."

Read the full story:
Banks urged to offer basic accounts to bankrupts

DrScotsman

Charity Citizens Advice says the majority of banks refuse to let undischarged bankrupts even open a basic bank account, that does not have an overdraft facility, despite no legal justification for this.

Huh? I don't get this line. Surely the legal justification is that a business has the right to refuse service to anyone.

I'm not saying banks don't have a social obligation to offer basic bank accounts to bankrupts, but saying there's no legal justification for them to refuse is pants to be honest.

Lokolo

Has this come up before? Pretty sure there was something about people not getting basic accounts or something.

Alpine_Star

DrScotsman wrote: »

Huh? I don't get this line. Surely the legal justification is that a business has the right to refuse service to anyone.

I'm not saying banks don't have a social obligation to offer basic bank accounts to bankrupts, but saying there's no legal justification for them to refuse is pants to be honest.

There was a move by the Labour government to make it a legal obligation before the election but I don't know what's happened to it http://www.bbc.co.uk/blogs/thereporters/robertpeston/2010/03/a_legal_right_to_a_bank_accoun.html

The fact is that banks cannot be compared to any other business as the entire nation guarantees their very existence.

Bosie

What comes to my mind is that the public had to bail certain banks out from going bust:eek:

plumber2009

Im currently going down the BR route due to job loss and I have fought tooth and nail to avoid it.
People need access to a basic account for their day to day business.
I cannot see why banks dont offer these accounts more often because you cannot go overdrawn with a basic account and you cannot borrow through any overdraft/loan or credit card facility. Also due to having no debt the bank should make some money on the intrest.
When an iduvidual has been released from BR, he/she will need a way to rebuild their credit history and a basic account is the first step. It will take a very long time to recover from a BR and other altenatives should be considered before taking this step.

stclair

plumber2009 wrote: »

Im currently going down the BR route due to job loss and I have fought tooth and nail to avoid it.
People need access to a basic account for their day to day business.
I cannot see why banks dont offer these accounts more often because you cannot go overdrawn with a basic account and you cannot borrow through any overdraft/loan or credit card facility. Also due to having no debt the bank should make some money on the intrest.
When an iduvidual has been released from BR, he/she will need a way to rebuild their credit history and a basic account is the first step. It will take a very long time to recover from a BR and other altenatives should be considered before taking this step.

You can go overdrawn and be charged for example if a direct debit or standing order is returned unpaid.

Which then inturn takes you into an unauthorised overdraft. :eek:

plumber2009

stclair wrote: »

You can go overdrawn and be charged for example if a direct debit or standing order is returned unpaid.

Which then inturn takes you into an unauthorised overdraft. :eek:

This is a valid point for all to remember.:)

They will charge you fees but will not authorise any payment. A typical bank will charge £25.00 per unpaid item plus daily intrest.:mad:

I was offered a "thinkbank bank account" a few years back when i was on a DMP. The account was £8.00 per month but you would not get charged any fees if your account went in the red and the payment would be processed.

debtinfo

DrScotsman wrote: »

Huh? I don't get this line. Surely the legal justification is that a business has the right to refuse service to anyone.

I'm not saying banks don't have a social obligation to offer basic bank accounts to bankrupts, but saying there's no legal justification for them to refuse is pants to be honest.

There are certain companies that have an obligation to provide a universal service, the question is, should banking be one of them