Some of the UK’s largest banks have been told to improve access to basic bank accounts after the Financial Conduct Authority (FCA) found vulnerable customers were not always being given suitable support.

Basic bank accounts are designed for people who may struggle to open a standard current account, including those with a poor credit history, people who are bankrupt, those in debt recovery plans and customers without a fixed address. They are free, do not offer overdrafts and allow people to receive wages or benefits, use a debit card, and make payments by direct debit or standing order.

More than four million people in the UK use basic bank accounts. They are offered by Barclays, The Co-operative Bank, HSBC, Lloyds Banking Group, Nationwide Building Society, NatWest, Santander, TSB and Virgin Money.

However, an FCA mystery shopping exercise found that access was inconsistent. The regulator reviewed 298 branch and telephone interactions and rated 28% as good or very good, 38% as fair, 20% as poor and 14% as very poor.

The FCA found that some banks failed to offer basic bank accounts to customers who appeared to need them, particularly people with no fixed address. In some cases, customers in vulnerable circumstances were directed towards online applications or mainstream accounts that were not suitable for their needs.

The nine banks and building societies that offer basic bank accounts have now agreed to simplify the process. They will aim to offer the right account on the first attempt, provide options for customers without a standard ID or a fixed address, and make alternatives available to those unable to apply online.

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