BY JIM WEBSTER

A growing number of people in the charity sector have been complaining about banks. I’m not talking about banks ‘unbanking’ people they disapprove of. Although why usurers, whose profession is frowned upon by all the world’s major religions, have suddenly become the guardians of decency, is beyond me.

I’m more talking about the problems charities have had getting any sort of service from banks. It’s obvious that banks don’t want to deal with charities. After all charities often have to have two signatories for cheques which means that they don’t do much online banking. Also, proving their antediluvian attitude to the modern world and profitable banking, charities are so uncouth that they still use cash. Can you believe it? How quaint and old fashioned!

Some banks now refuse to accept charity accounts. Others impose charges. Indeed, I saw a comment in one paper where the leader of a Brownie pack was considering abandoning the banking network and instead reverting to keeping the cash in a box under her bed because bank charges had become the pack’s largest single expense.

My own experiences are in keeping with this sad picture. I am the chair of a small charity (a parochial church council) and, as inevitably happens, we had to change signatories for the charity chequebook. Trustees move on, staff leave, trustees die … these things happen.

The bank demanded that the signatories had to be the chair, treasurer or secretary of the charity. Sorry, but since when is it the role of the bank to tell a charity who should sign the cheques? With our PCC (also a small charity) the chair and the treasurer are man and wife. They refuse point blank to both be signatories, pointing out that this is hardly good practice.

We did ask the bank why they insisted on this policy but got no answer. Then somebody pointed out to me that the bank was never going to check to see whether the signatories they got were the appropriate office holders. So, their structures could be relatively easily circumvented. But some things are more problematic, and why accept being put in a position where you have to break silly rules?

Every so often one runs into a mixture of ignorance and incompetence that makes life difficult.

Let me paint the picture…

There exists a small PCC in the deepest English countryside. Due to circumstances, there has been a change of personnel. Names are changed to protect the innocent. We have a lady we will call Janet. She has been on the PCC for three or four years. She is a signatory and can sign the cheque book. We have the chairman, let us call him John. He is also a signatory but has moved out of the area. But before he went he arranged with the bank to make the new treasurer, let us call her Livia, a signatory. There have been other signatories but they are dead, or are suffering from advanced dementia, or have just disappeared.

The first thing that happened, or didn’t happen, was that the treasurer, Livia, never got any bank statements. John had assured her, before he moved, that she would do. He had arranged it with the bank. So, Livia contacted Janet, but Janet hadn’t received any bank statements. So Livia contacted the bank. The bank stalwartly insisted they had been sending out the statements.

So Livia asked where they were sending them but obviously they couldn’t tell her because of GDPR.

So Livia pointed out that the bank was sending the charity bank statements to an unknown address no longer connected with the charity. Was this entirely wise?

The bank then stopped sending out the statements, which may or may not have been sent out in the first place.

Livia then asked why they couldn’t send them to her. She was told that it was because she wasn’t a signatory. Thus they couldn’t discuss anything with her.

So Janet went down to the bank. After spending forty minutes in the bank, she was told that she too wasn’t a signatory, in spite of the fact they had been accepting cheques signed by her for the past couple of years. So she asked who was a signatory?  

Obviously they couldn’t tell her because of GDPR.

So Livia and Janet put their heads together. They knew where John was, so they sent him an email. Now John is one of those methodical types. When he added Livia as a signatory, he did it online through an online chat. He had copied the chat, pasted it into an email and sent it to himself. He forwarded this email to Livia and Janet.

Livia, armed with a cup of coffee and a Sudoku (she knew what to expect, she had phoned the bank ‘consumer service’ department before, so this time she was prepared) telephoned the bank.

When they finally answered, Livia brought up the detail of the online chat and asked why the bank had lost the details.

Apparently there was a gratifying silence. So, she forwarded the email to some appropriate personage within the bank and eventually she got somebody who admitted that the bank had made a mistake.

Livia then pointed out the amount of time that had been wasted for Livia, Janet and John, all because of the bank’s incompetence. The voice at the other end agreed. Matters would be arranged.

A few days later, Livia got a phone call from a lady at the compensation department. Would £300 be enough?

Snatching the money with both hands (the cheque was made payable to the charity, thus making the bank the largest single contributor to its funds this year), Livia agreed it would suffice.

So far Livia has a cheque book and has even received one bank statement. We await with interest to see if she will receive subsequent.

As an aside I would suggest that more people remember Livia and ask their banks for compensation. It might concentrate minds at the other end?

Sadly, ours is not an uncommon tale. Indeed, there have been so many complaints that bodies like ACRE, NCVO, and any number of others have been putting pressure on the Charity Commission to act.

And finally, the Charity Commission has acted. It has written a letter to the CEOs of UK banks.

They point out that “From our work with charities, we know that they are:

• Having accounts closed or suspended suddenly for long periods of time

• Facing a reduction in bespoke banking services

• Experiencing poor customer service and administrative delays

• Finding that online banking is not designed to match the way charities operate.”

The Charity Commission does suggest some remedies:

“There is much more that banks could be doing to make this easier for charities. Thankfully, some work is underway – there has been worthwhile dialogue through UK Finance and its charity and community banking project, which we as charity regulators have supported. Through the project, we are working together to improve information for charities to help them better interact and understand what is required. However, banks need to do far more to step up training and customer service, or the community banking project will not address the challenges faced by charities.

In our view there are solutions that you as banking providers should take forward:

•The process for setting up a charity bank account could be made more straightforward and how to support charities could be better explained to banking staff, recognising that it is in all our interests to safeguard donated funds, and to support charities to prioritise meeting the needs of their beneficiaries.

•Training materials would ensure bank staff are aware of the different charity structures and how they are governed, so they request correct documentation and prevent avoidable delay driven by misunderstanding within banks.”

I confess that I await with interest to see just how the banks respond. Unless of course some harassed clerk misfiles the Charity Commission letter and posts it to wherever they were sending poor Livia’s bank statements.

Jim Webster farms at the bottom end of South Cumbria. Jim was encouraged to collect together into a book some blog posts he’d written because of their insight into Cumbrian farming and rural life (rain, sheep, quad-bikes and dogs) It’s available here.