More needs to be done to raise awareness of basic accounts

Banks, building societies and payment firms need to raise more awareness about basic bank accounts, the Financial Conduct Authority (FCA) says.

The regulators have asked account providers to review their approach to turning people down or closing accounts and make sure vulnerable people aren’t losing out.

Improvements the FCA wants to see

They say several providers have room to make it easier to apply for a basic bank account, which lets you make and receive payments without having an overdraft. You also don’t have any fees or bank charges with this type of account.

And the FCA says people shouldn’t be denied opening an account if they don’t have standard forms of ID – and it needs to be clearer which alternate forms of ID are accepted.

What are obstacles to opening a bank account?

Independent research by the FCA found the most common problems when opening even a basic bank account are:

• a lack of accepted ID
• no fixed address
• not knowing how to open an account
• language barriers 
• confusing forms

They said those who’d successfully opened an account had been supported by friends, family, charities or other services.

Banks and other account providers have an obligation under Consumer Duty to explain why they’ve closed your account or why they won’t let you open one. They need to explain this in a way you can easily understand.

Looking for a new bank account?

If you’re dealing with debt, it might be a good idea to open a new bank account – read more about the different types of bank account, and how to open one.