Regulators criticise banks for providing ‘unacceptable’ service to charities


The UK’s three charity regulators have criticised major high street banks for providing “poor customer service” to charities and abruptly closing or suspending their accounts.

An open letter signed by the Charity Commission for England and Wales, the Charity Commission for Northern Ireland and the Office of the Scottish Charity Regulator has called for “big banks” to “improve services for charities”.

The letter says charities are having their accounts closed or suspended suddenly and are experiencing “poor customer service and administrative delays”, as well as unsuitable online banking services.

The letter gives the example of a charity that contacted the Charity Commission when its account was frozen after a bed-bound trustee suffering from cancer was unable to sign a document that dozens of other trustees had already signed.

The letter said: “Charity trustees are obliged by law to account for the money they raise and the funds they distribute.

“Adequate banking provisions and control over cashflow are critical to robust financial governance procedures, and that underpins the sustainability of the sector.

“Inadequate banking provision drives charities to rely on unsafe practices, such as trustees using their own bank accounts, or keeping large cash reserves unsecured – and public trust in charities may become eroded.

“Those impacted most tend to be smaller local organisations. These issues are of concern to us as charity regulators and should be of concern to banks.

“There is little more that we as regulators can do. The action needed can only happen with support and leadership from UK banks. 

“Working with charities is key to acting as a responsible business within our society, and the best way that banks can do so is by streamlining services to help charities operate in a way that does not create serious governance issues for them.”

The regulators have called for the banks to make setting up bank accounts more straightforward for charity trustees and to improve staff training at banks for handling charity accounts to prevent “avoidable delay and unnecessary account freezes”.

Speaking today at the Charity Commission’s annual public meeting in Liverpool, Helen Stephenson, chief executive of the regulator, is expected to say: “Charities are on the front line of the current cost-of-living crisis, providing vital support to people across the country at this challenging time. 

“Many are themselves facing financial difficulties.

“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.

“This letter makes clear that we consider the service charities experience is unacceptable.

“The scale of the response from banks needs to improve, now, and at pace.”

Products You May Like

Articles You May Like

Regulator closes case into emergency response charity after ‘toxic’ culture claims
‘Serious weaknesses’ in safeguarding at religious charity exposed children to sexual abuse, regulator finds
Animal welfare charity to close
Charity leaders become MPs after historic election
Former charity worker to lead government department containing civil society brief

Leave a Reply

Your email address will not be published. Required fields are marked *