Joint ac­counts: Be­ware the per­ils of a break-up

Birmingham Post - - BUSINESS - Vicky Shaw

MANY bank­ing cus­tomers sign­ing up to a joint ac­count with a part­ner could be at risk of be­ing pur­sued for se­ri­ous debts they did not re­alise they were li­able for, re­search warns.

Banks are be­ing urged to spell out joint ac­count terms more clearly as a sur­vey found wide­spread con­fu­sion among con­sumers as to how th­ese ac­counts work.

Three-quar­ters (74.1 per cent) of peo­ple do not re­alise that ei­ther per­son is li­able to pay the debt on a joint ac­count and that the bank may pur­sue ei­ther for the full amount.

SavvyWo­, which re­leased the find­ings with M&S Bank, says it re­ceives emails from those who have been left “high and dry” af­ter their ex has run up debts on a joint ac­count.

The sur­vey of more than 2,000 peo­ple also found seven in ten (70.1 per cent) do not know or wrongly think they need the ap­proval of both par­ties to set up ar­ranged over­drafts.

Nearly half (47 per cent) in­cor­rectly think the ap­proval of both joint ac­count hold­ers is needed to with­draw cash, or do not know whether this is the case or not. A sim­i­lar pro­por­tion (46 per cent) do not re­alise their credit re­port can be linked to some­one else’s if they have a joint cur­rent ac­count to­gether.

Sarah Pen­nells, founder of SavvyWo­, said: “Thou­sands of cou­ples open joint ac­counts each year and I’ve been con­cerned for some time that many of them don’t know what they’re sign­ing up to. If a re­la­tion­ship breaks down, one part­ner can be left with debts of hun­dreds or even thou­sands of pounds.

“We’re now go­ing to cam­paign to get all banks to do their bit to make joint ac­counts clearer so cou­ples know ex­actly what they’re agree­ing to.

“I’m look­ing for­ward to the day when I don’t get emails from women who have been left high and dry be­cause their ex has run up debts on a joint ac­count and they’ve been left to pick up the bill.”

M&S Bank pro­vides cou­ples with a one page sum­mary of key ac­count in­for­ma­tion.

Sue Fox, chief ex­ec­u­tive of M&S Bank, said: “As a re­sult of the re­search, con­ducted with SavvyWo­man, we also want to en­sure cou­ples bet­ter un­der­stand the fi­nan­cial link they’re mak­ing with their part­ner from the out­set, such as linked credit re­ports.”

A spokesman for trade body UK Fi­nance, which rep­re­sents banks and other bod­ies, said: “Joint ac­counts of­fer a use­ful ser­vice, but as with any prod­uct, it is im­por­tant cus­tomers terms and sign up.

“UK Fi­nance has pub­lished a help­ful guide to joint ac­counts, and ad­vise any cus­tomers who are un­sure about their ac­count to speak to their bank.”

Ms Pen­nells’ tips for cou­ples think­ing of open­ing a joint ac­count include:

Make sure you read the terms and con­di­tions be­fore you take out a joint ac­count.

Do not agree to an over­draft fa­cil­ity if you do not need one and, if you do, limit the amount you bor­row to what you need and are able to pay back.

Agree with your part­ner ex­actly what the ac­count will be used for be­fore you open it.

Check the ac­count reg­u­larly you know what it is be­ing used for.

Con­tact your bank im­me­di­ately if you and your part­ner split up, es­pe­cially if it is ac­ri­mo­nious. Ask the bank to change the way the ac­count op­er­ates so you both have to agree to any with­drawals or new pay­ees. fully un­der­stand con­di­tions be­fore the they so

> Joint ac­count hold­ers don’t re­alise they are both li­able for any debts

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