Financial help urged for millions shunned by banks
17th February 2010
Banks are being urged to help millions of people in the UK who do not have access to banking services.
Nearly seven million people in the UK are excluded by the banks and cannot access loans, overdrafts and credit cards, says The Better Banking Campaign.
The campaign - which has been organised by a body of charities and local groups - highlights the fact that many people are forced to take out payday or home credit loans, which usually offer small sums with astronomical interest rates.
According to the Treasury, 1.75m people do not even have a basic current account with a bank.
Steve Wyler, spokesman for the campaign, criticised the banks, many of which had been "propped up" by the taxpayer, for not supporting the people and businesses most in need of financial assistance.
"Most people believe access to bank accounts and affordable credit are basic rights, so we want to see this as a priority for all the political parties," he said.
According to the Treasury, 1.75m people do not even have a basic current account
The campaign said millions of people with decent finances are being denied access to mainstream credit because they have no bank account, no credit history or no penalty payment charges.
It is demanding that incentives and obligations are given to financial institutions to ensure that they offer services to people who are currently excluded. It also wants a legal cap imposed on excessive interest rates.
It is also calling for banks to be more transparent and disclose where they get their money from and where it is invested.
A recent survey by the group showed that 70% of people thought having access to mainstream financial services should be a basic right.
The group believes that those excluded by banks could be pushed toward dangerous payday lenders and home credit companies which can charge "sky-high" interest rates of up to 2,500% a year, or in the worst case scenario, illegal loan sharks.
Useful links:
Payday loan complaints
Claims Financial