March 07, 2006

Banking as a human right

There was a discussion on Radio 4, I think yesterday morning, which concerned banking and the 'essential' commodity of a current bank account.

One of the guests was arguing that the possession of a bank account was a human right, as life without one in this day and age is incredibly difficult. He said that he thought banks should not be allowed to refuse potential customers.

Now, I can understand the sentiment, but banks are ultimately profit-making organisations, and any other business would not be forced to do something they felt would be financially dubious, even if it were disadvantageous to a potential customer.

Also worth considering is that, for most of our other 'essential services', public organisations exist to cater for our needs: the NHS to provide healthcare, the police to enforce the law, state schools for education. Why not for banking?

So…

  • Should banks retain the ability to reject a person's custom if they want?

  • Is banking a human right?

  • If it is, but if we unhold the rights of the banks to reject customers, how do we resolve the problem?

- 9 comments by 3 or more people Not publicly viewable

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  1. Christopher Rossdale

    I know of people who, due to an inability to prove their existance to a reasonable degree (no passport, lost birth certificate etc), have been unable to get bank accounts and therefore unable to take on jobs. I think one is living on the streets now.

    07 Mar 2006, 13:59

  2. Forgive me if I sound harsh, but I'm sure there are avenues to prove your existence and identity even if you don't have a driving licence/passpot/have lost your birth certificate…
    And with the amount of fraud, money laundering and other financial crime surely those of us who maintain honest lives should be thankful that our banks are being cautious about who they accept as customers?

    07 Mar 2006, 14:18

  3. Lee Davis

    Unfortunately all those regulatioins only really cause problems for us law abiding citizens to open accounts. The criminals can quite easily produce the required fake documentation.

    As for the provision of bank accounts , the government are apparently withdrawing support for the post office bankasic bank accountsin a few years time which were supposed to be there to allow basic access to all (and ease payment of benefits).

    07 Mar 2006, 14:35

  4. Paul Hunter

    Proof isn't always enough!!!! My girlfriend recently (well 2 years ago) moved back from France, and despite holding a valid British passport and birth certificate really really struggled to get a bank account from HSBC because she hadn't lived in Britain for 3 years (despite her parents never selling their house in England!). Is this a case of 'nationalism gone mad?' or should 'foreigners' be denied this human right just because of their address.

    08 Mar 2006, 08:20

  5. My girlfriend recently (well 2 years ago) moved back from France, and despite holding a valid British passport and birth certificate really really struggled to get a bank account from HSBC because she hadn't lived in Britain for 3 years (despite her parents never selling their house in England!). Is this a case of 'nationalism gone mad?' or should 'foreigners' be denied this human right just because of their address.

    Bloody hell. Compare this for a cultural difference:

    A friend of mine, on holiday for a week in Spain, managed to open a bank account there (complete with combined credit/atm card) in less than 15 minutes. He had no documentation other than his passport, and no permanent address in Spain (and never had).

    Yet they would have asked him some pretty searching questions if he'd tried to depost 50,000 in notes – so it's hardly a money launderer's paradise.

    The regulation and the regulation culture in this country are ridiculous. Surely anti money-laundering regulations should only affect people who try and deposit large amounts of cash? I may be naive, but provided a) you can't go overdrawn, b) you don't deposit large amounts of cash, and c) you don't have a serious ciminal record, I don't really see what problem there could be opening a bank account? The banks can make a profit by paying a low rate of interest on the current account, and everyone wins! Or am I missing something?

    08 Mar 2006, 18:56

  6. Edward, yes I guess if you applied those conditions it would seem to work. However, you do have to define 'large amounts of cash', which might be difficult. Also, refusing to give accounts to those with a criminal record is, surely, failing those people whom this right-to-a-bank-account issue is trying to help. Why should a person who has served their time and is subsequently determined to live on the straight-and-narrow be denied something that is so vital to life in the modern world? And how do you define a 'serious' criminal record in this case (would you deny convicted fraudsters before murderers, for example, as their crime is related to the business)?

    09 Mar 2006, 11:58

  7. Why do we always talk of rights now and not responsibilities? It is not a human right to have a bank acount – it is possible to do without one! Also the NHS, education etc. is not a human right. It is something that our country has decided to offer to all subjects – it is a gift something to be grateful for. People always want rights but never responsibilities. Take for example the benefits system. There are those who abuse it, see it as their "right" to have have children no matter whether they can support them or not and expect the state to pay for them to be little more than baby producing machines while never paying into the system instead. Don't get me wrong, I am not against all benefits, but they should be there for those who have fallen upon hard times through no fault of their own. Whenever you think of rights you must think of responsibilities, what is my responsibility to this child? How will I (not the state ie someone else) support this child for the foreseeable future?

    The issue of whether the government should withdraw support for the Basic Post Office bank account which it set up just a short time ago is another matter. I think they are very short sighted to do so and perhaps even a bit dishonest (as they never let it be known they were going to withdraw support until quite recently after they set it up in the first place as a replacement to allow people to pay in benefits). Essentially I think government should be about increasing freedom where possible and it seems that by doing this they are simply doing the opposite.

    13 Mar 2006, 14:10

  8. Fair. I take your point: we should probably not be talking in terms of rights here.

    Is it really realistic to live without a bank account? Do businesses generally still offer to pay you in cash? Would it not be difficult to find accommodation if there was no standing order or prewritten cheque to assure payment?

    I guess with this entry I was really trying to consider the people who would be rejected by banks as a liability, not those who had been rejected because of national residential status issues (as per the first few comments). I was trying to suggest that as private companies banks should have the right to take on whomever they want, but that if it is judged that having an account is essential this service could be taken on by the government. After all, millions are spent on 'rehabilitating' criminals: if when they are released they cannot make something of their lives as a result of having no financial base, what's the point?

    13 Mar 2006, 15:00

  9. James

    Sarah,

    It's Friday afternoon, and I'm shortly to be summoned to more pressing concerns, but I'd just point out that one thing arising from the thread here is the confusion caused by loose terms such as 'human rights'. Whether one thinks there should be positive as opposed to negative impositions on the state (and I know people argue about the validity of the distinction in the first place), I can't imagine anyone thinking that positive human rights should be owed by a private company to private individuals. Would you include the many foreign banks trading in Britain?

    Public banks catering for the lower reaches of the socio-economic scale have been tried many times in many countries. They tend to be as inefficient and loss-making as every other state enterprise. I am sure there are ways of assisting those on the lower rungs without creating yet another state leviathan or by further disincentivising foreign investment in Britain

    24 Mar 2006, 16:30


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