Opening A Bank Account

Fear of banks
Why can’t I have a bank account?
Proof of identity

1 person in 6 doesn't have a bank account!
A fear of banks and of running up unmanageable debts were the main reasons given for not opening an account. And it’s poorest in society who are most likely not to have an account. The research also found that nearly half of the poorest in society, including those on state pensions, do not have an account.

The issue is important because from 2003, all state benefits and pensions will be paid directly into bank accounts.

But what we discovered On Your Behalf, is that not having a bank account also costs you money.

Fear of Banks

Fear of banks and of being seduced by easy access to credit are some of the main reasons why more than a sixth of the adult population does not have a bank account, according to research by the Financial Services Authority (FSA).

Other reasons include a misunderstanding about the documentation needed to open an account and the idea that you have to be employed before you can have one.

To help combat these misplaced fears, the FSA have a free booklet -‘No bank account? Why it could pay you to have one.’

This explains how the ‘introductory account,’ which many banks have begun offering in the past year, works and shows readers how to take their first step into banking.

Deborah Arnott, FSA Head of Consumer Education Services, said:-

"The FSA is concerned that misplaced fears are holding people back from applying for a bank account when they could benefit from having one.

The FSA’s new booklet sets out everything people need to know about opening an ‘introductory account’ and it also features a very useful table of all the banks offering one, which will help people to shop around for the best deal."

Amongst the poorest section of society (social grade E), almost half of people do not have an account. FSA research has also revealed that there are six distinct groups who do not have bank accounts:-

An ‘introductory account’ allows people to:-

The initiative forms part of the FSA’s programme of activities designed to meet its statutory role of increasing people’s understanding of financial products and services.

50,000 booklets will be distributed through Housing Associations, regional offices of The Big Issue, Further Education Colleges, Citizens Advice Bureaux, libraries and Trading Standards Officers.

Free copies are also available from the FSA Consumer Helpline on 0845 606 1234.

Why can’t I have a bank account?

A listener contacted the programme and told us about her experience of trying to open a bank account with the Northern Bank. She was told she needs photographic proof of identity, either a passport, driving licence or a household bill. But she can’t supply any of these.

We asked the Northern Bank why our listener was told she couldn’t open an account, they said:-

"Northern Bank has a legal requirement to ask for identity from new customers.

"We have reviewed and widened the identification criteria to include those who in the past may not have had the evidence to confirm their identity.

"Identity consists of:-

"In circumstances where the applicant cannot provide the required evidence of identity and where the Bank is satisfied that the individual cannot reasonably be expected to do so, evidence of a letter or statement from a professional person in a position of responsibility who knows the applicant will be accepted."

RELATED LINKS

British Bankers Association
Financial Services Authority
Identity Fraud

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