There are concerns that changes made by major banks to their basic bank accounts could exclude poorer customers from the banking system, according to a consumer watchdog.
Consumer Focus made the warning following alterations made by some High Street banks to their basic bank account, which could see customers charged three times the current maximum daily charge for missed direct debit payments - if they don't have sufficient funds in their account.
For instance, a customer could end up being charged up to £24 instead of the current £8 if they miss three payments in any one day. The watchdog warned that the risk of such high charges - even if the likelihood of being charged the maximum amount was slim - could lead to the 'poorest and most vulnerable customers' being discouraged from opening a bank account.
Financial services expert at Consumer Focus, Oliver Morgan, commented: "Living without a bank account can make it hard to live in the 21st century and can create financial penalties for the households who can least afford it.
"The Government already faces an uphill struggle to persuade customers to sign-up to a bank account when many people distrust banks and the charges they make. These changes will make that hill even harder to climb."
Basic bank account providers have been urged to put some minimum standards in place to ensure banking customers get the best possible access to this type of account. The proposed standards include:
- Guaranteeing all basic bank accounts don't put large fees on unpaid charges
- Offering full access to cash machines and the Post Office
- Ensuring customers can use a debit card and make free electronic payments.
A spokesperson for thinkmoney commented: "For banking customers concerned about high charges, some basic bank accounts don't come with any fees for bounced payments or any other hidden extra charges, just a straightforward monthly fee - for example, the thinkmoney Personal Account - our alternative to a basic bank account. Customers looking to open a bank account should always look carefully at the terms and conditions before making any decisions."