Help may be at hand for British expats in a muddle over holding a UK bank account.
The European Commission has stepped in to the row alleging banks failing to open accounts on the grounds customers live outside the country may be breaching their human rights.
Banks and credit card companies have cracked down on accounts held by expats mainly on the grounds that they cannot pursue debts if a customer lives outside the jurisdiction of British courts.
Money laundering laws and ‘know your customer’ rules imposed by UK financial regulators also require banks and financial firms to meet their customers face-to-face when they open accounts.
However, that has led to expats suddenly losing lines of credit, finding they cannot open new accounts even if they are already bank customers and poses problems with some pension providers who will only pay benefits into a British bank account.
Breach of rights
The European Commission is involved after the UK Competition and Markets Authority picked up around 50 complaints from disgruntled British expats. The authority pointed them at the commission as an investigation is already underway about cross-border access to banking services in the European Union.
The commission has sent letters addressing the complaints to the protestors telling them that discrimination on the grounds of residence is a breach of their rights within the single market.
The letter also suggests that the expats look at a new European directive relating to banking which becomes law before the end September 2016.
The payment accounts directive says every European Union citizen has a right to a basic bank account.
No change expected
Although the directive is designed to let around 58 million Europeans without bank accounts access basic financial services, the terms of the directive do not force banks or building societies offer their full services to customers.
In the UK, basic bank accounts tend to come with a debit card but no access to overdrafts or credit. They are offered to customers with poor credit histories as a means of managing their finances without credit.
“The directive in no way forces banks and other financial institutions to give a full range of services to every customer,” said a commission spokesman.
“Instead, it is aimed to deliver a basic service to customers on benefits, with poor credit histories or other reasons they can’t gain credit.”
In effect, the directive means little changes for expats.
