Banks have been urged to allow bankrupts access to basic
accounts and to treat them fairly. Citizens Advice commented
that undischarged bankrupts were being denied a basic
account (i.e. with no credit facility) by the majority
of UK banks irrespective that there was no legal justification.
Basic bank accounts are offered by 17 building societies
and banks, however only 2 offer a basic bank account.
This would enable those within the bankruptcy process
to open an account.
The charity urged banks to make basic accounts available.
They also saw the inability for bankrupts to have a basic
account as further financail exclusion. The amount of
people going bankrupt between 2000 and 2009 increased
by 249%.
An unexpected change in circumstances was put forward
as the main reason for an individual going into bankruptcy.
These circumstances included illness, job loss, a breakdown
in a relationship and an accident.
Citizens Advice commented that it was compounding the
situation when an individual can not start afresh and
take control of their finances. It was also impractical
and demoralising. It also led to dependance on family
and friends for acount use.
The other issues were it excluded bankrupts from paying
bills by direct debits and potentially receiving discounts
and/or having the facility to purchase goods online. An
extreme example may well be losing a job or being unable
to secure a job as employers invariable work with BACS
to pay wages.
Citizens Advice commented that although great strides
had been made to improve access to accounts for many groups
undischarged bankrupts still struggling to access a. Basic
tasks can become costly and huge obstacles. People within
bankruptcy are often seen as being at a vulnerable juncture
in their lives.
An independent Banking Code review and the Treasury Select
Committee have urged more banks to make available basic
accounts to undischarged bankrupts.
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