How do I find out about basic bank accounts?

25 August2011

How do you find out about basic bank accounts? What will a bank tell you about them? How can you find out how they work?

As you might expect, there are rules and guidance about this, designed to make sure consumers are fairly treated and fully informed.

How do we know what banks do about basic bank accounts?

The British Bankers' Association describes itself as 'The voice of banking & financial services'. It's the leading trade association for the UK banking and financial services sector, representing over 200 member banks.

One of the many useful things it provides on its website is a range of 'guidance' documents that show what financial firms should do to comply with rules set by the FSA (Financial Services Authority).

One of those documents is the 'Industry Guidance for FSA Banking Conduct of Business Sourcebook' [BCOBS] - which 'provides examples of minimum standards that firms can adopt to comply with certain requirements of BCOBS and the Principles for Businesses'.

What does the guidance say about basic bank accounts?

The guidance has quite a lot to say about basic bank accounts. It calls them a 'useful tool in encouraging financial inclusion', and points out what firms that offer these accounts can do to show they're treating their customers fairly.

Here's a selection of the points it makes.

  • When customers go into a bank (or other financial services firm), they'll often find leaflets at the front telling them about the services the company provides. The guidance specifically states that this literature should refer to the company's basic bank account (if it actually provides a basic bank account, that is). It should tell customers about the availability of the account and where they can get more information.
  • When a customer asks about current accounts, the company should tell them about its basic bank account if it looks like they'd be better off with a basic account. It even describes who those customers might be - for example, people who:
    • want an account that doesn't let them go overdrawn,
    • are mostly reliant on state benefits, and/or
    • are happy with an account that doesn't provide (for example) a cheque book.
  • If a customer wants to open a basic bank account, the company should let them do that - as long as they fulfil the criteria for this.
  • However, they don't have to let someone open a basic bank account if:
    • they're an undischarged bankrupt,
    • they have a history of fraud, and/or
    • they already have a suitable account with that bank.
  • If the company needs to carry out a full credit check as part of the application for a basic bank account, they should explain exactly what that means - including whether or not it might affect the customer's ability to apply for credit in future.
  • If the company turns down a customer's application for a basic bank account, they should explain the most important reason why it was rejected if the customer asks - unless it was rejected on the grounds of suspicion of money laundering or fraud.

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Tags: find out, more, basic bank account, bank account, bank accounts, bank, rules, FSA, BBA, guide book

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