Banks have an obligation to crack down on fraud and prevent their accounts being used by scammers. But tight regulations mean opening an account can be tricky if you don’t have proof of address or are new to the UK. Do you think it could be easier or are the precautions justified?
When you move countries, there are challenges you expect – finding a place to live, immigration paperwork, even potential language barriers (including the discovery that ‘pants’ does not necessarily mean trousers in the UK).
But when I moved to the UK from Australia last year, I wasn’t expecting the biggest challenge to be something as mundane as opening a bank account.
For thousands of people – migrants, but also the elderly, young people or people in unconventional living situations – providing the paperwork necessary to open an account can be a significant hurdle.
To do so, you need identity documents and proof of address.
Caution on the part of banks is understandable given that bank fraud and scams are rife, so it stands to reason that they need to protect innocent people by checking the identity of anyone opening an account. But in my case, providing proof of address turned opening a bank account into a two-month ordeal.
Like many new arrivals, my husband and I initially lived with generous friends when we arrived in the UK. When we called the helpline of a high street bank to ask about becoming customers, we were told to bring a letter from the homeowner as proof of our address.
But when we arrived at our appointment, the bank refused to accept this as evidence. They also refused a letter confirming our NI numbers, letters from our employers, or letters from the Home Office regarding visa documentation.
No, we would need a utility bill or a lease. Yet few landlords are willing to let to tenants who don’t have a bank account in the UK.
For many, it’s a catch-22 situation – you need a bank account to let a property, but you need evidence of your address to open a bank account.
It’s not just migrants who might be caught out. Flat sharers may not be the person listed on the lease or paying the bills. Elderly people might move in with their children when they need care, while adults sometimes move back in with their parents.
If you’re in these circumstances, you might struggle to switch to a new bank provider or to change your address – especially if you aren’t able to go into the local branch.
A new app called Monese promises to allow customers to open a UK bank account without a UK address or credit history. But you should be aware that using it won’t give you access to the Financial Services Compensation Scheme (FSCS) protection if the company goes bust.
When the process gets frustrating, it’s worth keeping in mind how damaging fraud can be. In some cases, scammers have used stolen identities to open bank accounts and transfer stolen funds, or ruin their victims’ credit. So while regulations make it harder for some people to open an account, they may actually be protecting the public more broadly.
Ultimately, it worked out for us: we found a letting agent who would accept an overseas bank transfer and we found a bank willing to accept our lease as evidence.
Have you also had difficulty opening a bank account? Do you think UK bank regulations do enough to protect consumers, while still helping people access their services?