Strict money laundering rules that were designed to trap drug dealers and terrorists have been frustrating savers when trying to open a new savings account.
Building societies and banks are required by law to verify the identity of any new personal or business bank account holders. However the application of these rules is preventing some from opening telephone or internet savings accounts.
Most banks require either a passport or driving licence to be presented for identification. Some older pensioners may not have these documents. This could prevent them from benefiting from finding the best savings deals.
Some also feel that banking institutions may be using the regulations improperly. Select financial providers request employer and salary details, and others have been reported to use credit agencies to look into the financial affairs of some prospective customers.
Furthermore many savers feel compelled to switch banking providers to get the best deal. Building societies and banks often launch accounts with a promotional bonus interest rate attached to them. These introductory rates usually expire after the first year, reducing the interest to sometimes as little as 0.1 per cent before tax.
Many savers have found it too much of a hassle to swap providers, however. They feel that the process involved in opening a new account – sending important documents such as driving licences, marriage and birth certificates, and passports through the post – is too dangerous and inconvenient.
Sometimes sending a copy of the requested document isn’t enough. All copies need to be certified by either a bank manager or a lawyer before they are accepted as proof of identity. These certifications are always carried out with a fee attached.
One married couple recently applied for savings accounts with two separate banks. The husband was approved on both occasions. The wife however was subject to further identification by both banks. This was in spite of the married couple sharing many financial details such as a common address and other accounts opened elsewhere.
Spokespersons from both banks declined to comment on why she was subject to more verification than her husband.