UK Banks Fail Consumers With Joint Accounts - Survey

Sandra Kilhof

8 July 2013

UK banks and financial firms are failing customers who need to safeguard their joint finances when relationships break down, according to a survey by SavvyWoman.co.uk, a money website for women.

The research found that banks’ procedures can be inconsistent and unhelpful, and that staff don’t always abide by clear policies when dealing with joint finances after a customer’s relationship fails.

Sarah Pennels, founder of SavvyWoman.co.uk, said that women had contacted the website after former partners had forged signatures and otherwise abused their trust by borrowing larger mortgages or taking out entire savings accounts. In one woman’s case, the ex-husband had withdrawn £1.6 million from a joint savings account.

The lack of information and dispute-resolution on joint finances pertains mainly to the retail banking sector, but Pennels told WealthBriefing that some reported cases indicated that the same issues exist within the asset management industry and pension funds, where couples have made joint investments.

As in many other cases, the woman was not aware that when consumers sign up for a joint account, both parties are equally liable for any debt on the account, regardless of who ran up the debt.

“However, this is often not explained clearly and may be hidden in the bank’s terms and conditions. When couples tell their bank they are in dispute and there is a joint account, banks should take reasonable steps to set up a facility so both partners have to agree to transactions, or to freeze the account as soon as possible,” Pennels said.

The findings are supported by the Financial Ombudsman Service, which also saw a continual increase in the number of enquiries about joint accounts and loans where a relationship breakdown had been a factor.

The gratis complaints service found that banks have been inconsistent when divesting information on joint accounts, and when dealing with disputes in conjunction with these.

Pennels added: “I am contacted regularly by women who are in debt due to joint accounts or mortgages, so it is clearly an issue and one the banks need to address. This can be done by making sure both partners have to agree to any extra spending or offering to freeze the account.”