Consumer groups warn of basic accounts threat

Consumer Focus says banks have begun to withdraw services from people with basic accounts, with RBS and Lloyds denying access to the LINK ATM network.

However, one in five UK adults – around 8.4 million –  depend on a basic bank account.

Mike O’Connor, chief executive at Consumer Focus, said: “A bank account is an essential product in the modern world. The last thing these consumers need is a race to the bottom  between banks which keep chipping away at the features these accounts offer. Without  intervention these accounts could become less useful or more expensive for low income consumers.

“We are calling on banks to work with government and regulators to produce minimum standards for basic bank accounts.”

Michael Ossei, personal finance expert at uSwitch.com, said: “ Banks have spent the last few years talking about rebuilding consumer trust, but without action talk is cheap. The whole point of basic bank accounts is to protect vulnerable customers and to help eradicate financial exclusion – giving everyone access to a bank account and their money for free. As it is, only four in ten (43 per cent) people think that banking will still be free in a year’s time. ”