Joint bank accounts could end in disaster
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 joint account terms out 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.
SavvyWoman.co.uk, 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 10 (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 an account together.
Sarah Pennells, founder of SavvyWoman.co.uk, 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.”