The Daily Telegraph - Saturday - Money
Barclays debanks charity accounts for deaf and blind
Barclays has been accused of debanking charities for the deaf and the blind.
Two organisations, the Cumbria Deaf Association and Wakefield District Sight Aid, a charity based in Yorkshire, have said the bank suspended their accounts in October after key information was not kept up-to-date.
Caroline Howsley, chief executive of the Cumbria Deaf Association (CDA), said the freeze on the charity’s bank account has left it unable to pay the wages of three full- time and 10 parttime employees.
Faced with the prospect of making redundancies, the chief exective said she and her husband had paid £40,000 of their own money to cover the association’s running costs.
The charity’s bank account was suspended after Barclays asked it to update the details on its banking mandate, despite the charity insisting a paper form with the required information had been handed to the bank earlier in the year.
A Barclays spokesman said the charity had not correctly completed the forms or provided information for an account guarantor.
It said: “In this case the customer’s mandate required updating and on sending the customer forms twice, they were not completed correctly and returned to us.
“We work hard to avoid the last resort of account closure, but we fully understand the issues it can cause customers and in light of this we have offered to reopen the account to allow more time for the information to be shared.”
Barc l ays requires personal guarantors for some types of business accounts. Guarantors are held liable for debts if the business or charity collapses while owing money to the bank, such as an overdraft or corporate credit card.
Separately, Barclays suspended the account of Wakefield District Sight Aid, the Daily Mail reported.
Hayley Grocock, the chief executiuve, said Barclays froze £47,000 in October only to return the sum four weeks later as a cheque.
Barclays said the charity had not supplied “know your customer” information which is typically required by anti-money-laundering regulations.
A spokesman for the bank said: “We take the protection of our customers’ funds and data extremely seriously.
“As part of our ongoing responsibility to help prevent financial crime and to
‘As part of our regulatory responsibilities, we are required to ensure we hold up-to-date information’ meet our regulatory responsibilities, we are required to ensure we hold up-to- date information regarding our customers’ accounts.”
Last month the Charity Commission wrote to Britain’s banks warning over the “sudden closure” of accounts, saying short- notice suspensions risked driving small charity bosses into “unsafe practices” such as using their own bank accounts.
Helen Stephenson, boss of the regulator, said at the time: “The current stresses for charity trustees are heightened by avoidable frustrations at the availability of bank accounts and substandard service from banks.
“Too often, charities experience accounts being closed or suspended suddenly for long periods of time with poor customer service and administrative delays.” In November Bar
clays also suspended the bank account of a GP surgery in Royston, Hertfordshire, potentially putting patients’ lives at risk, according to one of its doctors.
Surgery staff did not notice a request from the bank to update the names on its banking mandate and treated emailed follow ups as a potential phishing attack to trick them out of their cash.
Nigel Farage, the former leader of Ukip, highlighted the issue of debanking after NatWest- owned private lender Coutts attempted to close his accounts because it did not agree with his political views. A Financial Conduct Authority investigation carried found no evidence of wrongdoing, although Mr Farage labelled the investigation a “whitewash”.
As recently as last week, bank staff were leaving voicemail messages with a former CDA treasurer which were intended for Mrs Howsley. She said this was despite several attempts over months to update the charity’s contact details. The Daily Telegraph understands that Barclays is now speaking directly to her about the future of CDA’s account with the bank.