Banks left outraged as government rules they must run illegal immigrant checks on all current accounts
UK banks are quietly outraged about new legislation which will force all banks to run checks for illegal immigrants against their current account customers.
Read more: New government rules will force UK banks to search bank accounts for illegal immigrants
The government has brought in rules requiring all banks to check their customers against a Home Office list of known visa overstayers, failed asylum seekers and foreign national offenders facing deportation.
High street firms are outwardly confirming their purported support for the measures, which will come into force in January. A Barclays’ spokesperson told City A.M. this morning: “We are happy to comply with the new legislation,” although was unclear on what the costs of compliance might be.
HSBC and Lloyds Bank had not responded to requests for comment at the time of writing.
But City sources have told this newspaper that behind closed doors, the picture is quite different.
“We are not happy about the sector being used for law enforcement,” one source said. “This additional push is going to place a lot of concerns on customers.”
It is understood that these arguments were raised with the government before the legislation was passed at the end of last year, but seemingly were not persuasive enough.
Read more: The immigration policies we need won’t come from Brexit
The Home Office has justified the regulations, saying: “We are developing an immigration system which is fair to people who are here legally, but firm with those who break the rules. Everyone in society can play their part in tackling illegal migration.”
What do the regulations entail?
Banks already have to check immigration status when opening a current account. But the new measures will mean they have to check all current accounts that are presently active, quarterly.
The Home Office will provide a list of known illegal immigrants to banks, supplied by anti-fraud organisation Cifas. The banks will then have a duty to notify the Home Office in case of a match.
In routine cases, the bank will then have a duty to prevent the relevant customer accessing their account. In cases where it is “necessary to exert some leverage”, the Home Office will seek a court order to freeze the account.
In an impact assessment completed in 2015, it said denying illegal immigrants access to banking services “will make it harder for them to establish or maintain a settled life in the UK and should incentivise voluntary departure”.
The Home Office expects to identify 6,000 illegal immigrants in the first year of the measures coming in to force.
But Caron Pope, managing partner at immigration law firm Fragomen, said:
Good luck to the banks with this. Understanding visa endorsements and the status of foreign nationals is often complex.
Employers already have to do this and often have to involve immigration lawyers when the situation is unclear. How banks can be expected to do this quarterly is quite frankly beyond me and the potential for things to go wrong is huge.