Major banks are making changes to their basic accounts that could push more consumers out of the banking system, a consumer lobby group has said.
Consumer Focus made the warning as Barclays has revealed plans to alter its basic bank account charges.
- Barclays bounced direct debit charge to be up to £24/day
- Up from £8/day
- Consumer group fears this could put the vulnerable off banking
Customers with a Barclays basic account can currently only be hit with one £8 per day fee, if a direct debit or standing order bounces.
From March 2012, they can be charged up to three lots of £8 per day, for each bounced payment, so up to £24.
There is no overdraft facility with this type of account although there is a £15 buffer customers can go into where they won't be charged.
Consumer Focus says the risk of such charges, even if the likelihood was remote of incurring the maximum amount, stops many from opening a bank account.
Oliver Morgans, financial services expert at Consumer Focus, says: "These changes to basic bank accounts are a backward step by banks which could increase financial exclusion.
"Living without a bank account can make it hard to live in the 21st century and can create financial penalties for the households who can least afford it.
"The Government already faces an uphill struggle to persuade customers to sign-up to a bank account when many people distrust banks and the charges they make.
"These changes will make that hill even harder to climb.
"Minimum standards are needed to stop a race to the bottom for the poorest banking customers, and we need to see action from the banks and the regulator to make this happen."
The changes come on top of amendments RBS made last month which mean its basic bank account customers can only withdraw cash at RBS group's ATMs and not those of other banks.
Consumer Focus believes minimum standards for basic bank accounts must include:
- Ensuring all basic bank accounts do not place large fees on unpaid item charges;
- Full ATM access and Post Office access;
- Free electronic payments and debit card functionality;
- Buffer zones to cover small overdrafts.
A Barclays spokesman says: "Barclays Cash Card account is and remains the leading basic bank account in the market across the range of features it offers and levels of charging.
"We offer full channel access for these customers and are one of only two banks that make their basic bank account available to undischarged bankrupts.
"We want to ensure this product remains financially sustainable so that we can continue to help those at risk of financial exclusion gain access to banking.
"We also want to ensure the product continues to meet the needs of those it is designed for.
"The changes we are making are based on solid research of our customer base and Citizens Advice Bureau clients."
Earlier this month, Barclays axed the £2 per month fee for basic account holders to get text alerts when close to their limit. This service is now free.