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Banks letting Scots down again

One in 10 Scots are having to survive the economic crisis without a bank account – despite government efforts to force banks to make accounts more easily available.

A report published today by Citizens Advice Scotland (CAS) shows that many Scots have been unable to open a bank account. In an age when financial transactions are increasingly electronic, this leaves them with no means of receiving benefit payments or salaries, or of accessing any form of credit and therefore of managing their day-to-day finances.

The CAS report, ‘Banking on the Basics,’ is based on evidence both from CAB clients and from a survey of members of the general public. It shows that:

  • One in ten Scots do not have a bank account, although two thirds of people without an account have tried to open one.
  • The problem affects at least 5% of Scottish households, which is higher than the rate in the UK as a whole (3%).
  • In Scotland, 1 in 5 households in the 15% most deprived areas don’t have a bank acount.
  • Young people and those living in rural areas are among those worst affected.

Publishing the report today, CAS Chief Executive Lucy McTernan said,

“For those who have a bank account it may seem a trivial thing, but not having one means that you can’t receive money, either from the benefits system or from employers. We have seen cases where unemployed people have had to turn down a job because the employer wanted to pay them by bank transfer and couldn’t do so.

“The reasons why people are refused bank accounts are often related to poor credit history. But we believe that even people who have had such problems are entitled to operate a bank account. 10 years ago the UK government tried to address this problem by calling on the major banks to make available a ‘basic bank account,’ which was an account which has no overdraft or credit facility, and therefore carries no risk for the bank but allows the client to manage their funds.

“This seemed the ideal solution, but our evidence today shows that the banks have been refusing applications for such accounts. Sadly, it seems that the major banks are letting people down again.

“We believe that everyone should have the right to a bank account, and we are calling on the mainstream banks to facilitate that. We are also urging the UK and Scottish Governments to support organisations who offer alternatives to banking services, like Credit Unions. We’re delighted to have secured the support of politicians across parties at both Holyrood and Westminster (see below) in this.

“The issue here is exclusion. Vulnerable people in Scotland are being financially dis-enfranchised. The very people who need the most help are being once again left behind.”

CAS staff are available for interview about this report, either recorded in advance or live on Wednesday. For more details please contact Tony Hutson on 0131 550 1010.