Minimum standards for basic bank accounts essential for consumers
2 November 2012
Gillian Guy, Chief Executive at national charity Citizens Advice said:
"Citizens Advice has long called for a minimum standard for basic bank accounts so Consumer Focus is right to urge the industry to provide this.
"Basic bank accounts are a vital product for the poorest – opening the door for financial inclusion and giving them a safe way to manage their money and get wages from their employer.
"As it stands, these accounts are on a slippery slope. Recently some banks have eroded what they offer and who they offer it to. We believe all banks should offer a basic bank account that provide essential services – like a debit card, using the counters at banks and access to the LINK cash machine network - to help people get on with their daily lives and manage their money sensibly."
In the Citizens Advice report ‘Access to cash – don’t bank on it’ (July 2012), we called for basic bank accounts to provide the following minimum standards:
- 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 cashback 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)
- eligibility criteria with minimal exclusions.
*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 DROs as well, with banks simply treating these people as if they were undischarged bankrupts.
Notes to editors
- The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, 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 information in England and Wales see www.citizensadvice.org.uk
- 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. For online advice and information see www.adviceguide.org.uk
- Citizens Advice Bureaux in England and Wales advised 2.1 million clients on 6.9 million problems from April 2011 to March 2012. For full 2011/2012 service statistics see our quarterly publication Advice trends
- Out of 22 national charities, the Citizens Advice service is ranked by the general public as being the most helpful, approachable, professional, informative, effective / cost effective, reputable and accountable (nfpSynergy’s Brand Attributes survey, May 2010).
- Most Citizens Advice service staff are trained volunteers, working at around 3,500 service outlets across England and Wales.