FINANCE NEWS: Banks slated for blocking tactics

High street banks have been accused of obstructing charities trying to open bank accounts with "ridiculous" procedures.

The man who helped negotiate a system of basic checking procedures on charity accounts six years ago now claims they have swung from a laissez-faire app-roach to the opposite extreme.

Stephen Burgess, now chief executive of Life Education Centres, says attempts by the charity to set up accounts for 14 local trading subsidiaries have been dogged by problems.

"I don't think we've had one easy experience," he said. "One bank even tried to insist that I parade all my trustees, from all over the UK, at the same time at a local branch.

"We're told the reason is anti-money laundering procedures - in case we're trying to hide money for Osama Bin Laden, perhaps."

He also claims that the regulations are onerous and that the banks operate them inefficiently, frequently losing documents.

Research by CAF earlier in the year found that information gathering by banks was seen as a bone of contention by charities "who view them as being overly intrusive or just plain bureaucratic".

In 1996, Burgess, in his role as chairman of joint purchasing body the Charities Consortium, helped persuade major banks to adopt a basic checking procedure with the Charity Commission register as a means of safeguarding against fraud when a charity applied to open an account.

He added that banks had introduced stringent new regulations, but many were not carrying out the basic check of asking the Charity Commission if the applicant was a registered charity.

A spokesman for the British Bankers' Association said the banks had to increase the checks on charities because of changes in the law. "All financial institutions are legally obliged to obtain proof of identity for all their customers, including signatories on charity accounts," he said.

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