Banks accused of failing most vulnerable customers

The UK's financial regulator, the Financial Conduct Authority (FCA), has accused some of the country's biggest banks of failing their most vulnerable customers. According to the FCA, banks have been pushing homeless people and those in financial hardship towards unsuitable online applications instead of offering them basic bank accounts. These accounts are free, do not include an overdraft, and are designed for individuals who might otherwise be excluded from the banking system, with over four million people in the UK holding them. A mystery shopping exercise conducted by the FCA rated a third of experiences with basic bank accounts as poor or very poor. The exercise, which covered 298 interactions across branches and by telephone, found that 20% of cases were poor and 14% were very poor. Problems included failing to offer these accounts to people who needed them, particularly those with no fixed address, and pushing vulnerable customers towards online applications unsuitable for their needs. In response, the nine UK banks and building societies that operate basic bank accounts have agreed to FCA demands to make access more straightforward. They have committed to providing the right account for customers first time, making it easier for those without standard ID or a fixed address to open an account, and offering alternatives to online applications for vulnerable individuals. Peter Tyler from trade body UK Finance acknowledged that more can be done to ensure consistently good outcomes for everyone.