Barclays basic bank account customers face pricey penalties
Basic bank account customers with Barclays face tougher financial penalties from next year, after the bank announced its intention to increase the penalty cost for missed direct debit payments.
At present, basic account holders have to pay an £8 penalty for missing direct debit payments if there are insufficient funds in their account. But from March 2012, Barclays plans to triple this charge to £24.
The charge will only apply if three missed payments occur in the same day. Barclays claims its decision is based on customer research but the campaign group Consumer Focus argues that recent research it has conducted indicates potential customers could be put off taking out a basic bank account because of the threat of these charges.
Oliver Morgans, financial services expert at Consumer Focus, calls the charges "a backward step" with the potential "to increase financial exclusion".
"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 holders at disadvantage
Consumer Focus calculates there are more than a million people in the UK without a bank account.
Basic bank accounts are current accounts made available to consumers with a poor credit history or debt record. Some restrict daily withdrawal limits and cash machine access.
Lloyds and RBS basic account customers are only allowed to withdraw cash from their bank's cash machines.
Exclusion is a potential loss or specific risk that an insurance policy does not cover and they occur in all types of insurance policies. Common exclusions include: natural hazards (exploding volcanoes, earthquakes) war, nuclear fallout, wear and tear (anticipated through the use of a product, especially motor insurance), UFO damage to vehicles, vehicles “stolen” by vengeful spouses, travelling any pre-existing health problems and travelling to countries the Foreign & Commonwealth Office deems too dangerous.
A no-frills vanilla bank account that allows you to have your salary paid in, to set up direct debits and standing orders for money going out and online access, but won’t allow you an overdraft, cheque book, interest earned on the balance or paper statements.