Universal banking must offer claimants choice, says Postwatch
Fresh concerns have been raised about the new post office-based bank by a consumer watchdog which fears benefit claimants may not be given enough choice about how to cash their cheques.
Postwatch, the consumer watchdog, is urging Consignia – soon to be renamed Royal Mail – to consult urgently about the implications for four million benefits claimants.
The post office bank, known as universal banking services, is being set up to fulfil its aim of automating benefits payments next year. This will replace the present method of allowing claimants to receive their benefit in cash over the post office counter.
Doubts remain over whether the universal bank can be established in time to meet the April 2003 deadline. Senior banking sources believe the process of putting the infrastructure in place for the post office’s own bank should be further advanced than they are at present.
Postwatch today calls for more dialogue with potentially vulnerable people. “With just nine months to go until this change begins, Postwatch would like to see that it is implemented in customers’ best interests. There must not be any negative effects on these vulnerable groups, many of whom rely on a cash world, as result of these changes,” a spokeswoman said.
The main concern is that the benefits claimants who will need an account when the social security system is computerised will be confused by the different types of accounts on offer. Claimants could pick a traditional bank account, a more limited product offered by the banks known as a basic account or one of the new post office card accounts.
Postwatch believes that in formation should be provided to claimants in a clear and full manner, and that the potential costs of the different accounts should be made clear.
The post office-based accounts have caused contro versy from the outset, particularly with the high street banks, which were reluctant to fund their creation at a time when they were also being asked to set their own basic bank accounts for the so-called financially excluded.
A spokeswoman for Consignia insisted that the process of setting up the services was on track, but added that the issue of consultation with claimants was one for government.
Postwatch warned that the automation of payments services could affect all the 15 million people at present collecting their benefits and state pensions from post offices using order books and giros. Some four million are thought to have no banking facilities at all, and are the people most likely to be targeted first.
“The payments system must be in place, tried and tested, before April 2003. Benefit recipients should not be used as guinea pigs,” Postwatch said.
