Bankrupt Brits refused banking
Tuesday, 08 September 2009 10:14
Brits who have been forced into bankruptcy are finding only two banks will offer them basic bank accounts.
Around half a million people have been made bankrupt since 2003 - when basic bank accounts were first introduced to increase financial inclusion - and 29,774 were declared bankrupt in the first three months of the year.
However, research by talkaboutdebt.co.uk finds only Barclays and Co-operative Bank offer basic bank accounts to undischarged bankrupts.
Otherwise, they have no day-to-day banking options until they are discharged - making them unable to have basic debit cards or pay cheques into accounts.
NatWest offers no accounts for people within the six-year bankruptcy term, while Lloyds TSB only offers discharged bankrupts a cash account with only a cash card, but not a debit card.
Jessica Bown, at talkaboutdebt.co.uk, said: "Since the government introduced basic bank accounts over half a million people have fallen into bankruptcy.
"For most this is a last resort, accompanied by a feeling of shame that is perpetuated because they are refused access to even the basic banking facilities necessary for modern life."
She added banks were treating undischarged bankrupts like "criminals", as they dealt with in the same way fraudsters are, and "making it harder for them to pick up the pieces of their lives and improve their financial situations".
Different basic bank accounts
| Bank and Account name | Direct debits and standing orders | Charge for unpaid direct debits | Charge for unpaid standing orders | Debit card | Reasons for application being declined |
|---|---|---|---|---|---|
| Abbey, Basic account | Yes | £5-£35 | £5-£35 | No | Undischarged bankrupt, record of fraud |
| Alliance & Leicester, Basic cash account | Direct debits only | £25 | No standing orders | No | Undischarged bankrupt, record of fraud |
| Bank of Ireland, Basic Cash Account (Only N.I) | Yes | £38 | £38 | No | Undischarged bankrupt, record of fraud |
| Bank of Scotland, Easycash | Yes | £15 | £15 | Yes | Undischarged bankrupt, record of fraud |
| Barclays, Cash Card Account | Yes | £8 | £8 | Yes | Record of fraud |
| Clydesdale, Readycash | Yes | £35 | £35 | Yes | Undischarged bankrupt, record of fraud |
| Co-operative Bank, Cashminder | Yes | £19.50 | £19.50 | Yes | Record of fraud |
| First Trust Bank, Basic Bank Account | Direct debits only | £38 | No standing orders | No | Undischarged bankrupt, record of fraud, record of bad debts |
| Halifax, Easycash | Yes | £15 | £15 | Yes | Undischarged bankrupt, record of fraud |
| HSBC, Basic Bank Account | Yes | No | No | No | Undischarged bankrupt, record of fraud |
| Lloyds TSB, Cash Account | Yes | £20 (max 3 per day) | £20 (max 3 per day) | Yes | Undischarged bankrupt, record of fraud |
| Nationwide Building Society, Flex Cash Card | Yes | £30 | £30 | No | Undischarged bankrupt, record of fraud |
| NatWest, Step Account | Yes | £38 | £38 | Yes | Undischarged bankrupt, record of fraud |
| Northern Bank, Northern Personal Finance | Yes | No | No | Yes | Undischarged bankrupt, record of fraud, record of bad debts |
| The Royal Bank of Scotland, Key Account | Yes | £38 | £38 | Yes | Undischarged bankrupt, record of fraud |
| Ulster Bank, Step Account | Yes | £30 | £30 | Yes | Undischarged bankrupt, record of fraud |
| Yorkshire Bank, Readycash | Yes | £35 | £35 | Yes | Undischarged bankrupt, record of fraud |
(Source: British Banker's Association, August 2008)
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