Immigration: more bank accounts checks

When 2018 rings in, all UK banks and building societies will have to carry out 70 million more immigration status checks every quarter on bank accounts. We look at the requirements and what they mean in practice.

Schedule 7 to the Immigration Act 2016 requires banks and building societies to check whether the account is operated by or for a disqualified person. This is because disqualified persons are prohibited from opening a bank account. A disqualified person is an individual in the UK who needs - but does not have - leave to enter or remain, and for whom the Secretary of State considers a current account should not be opened.

The 2016 Act was implemented on 30 October as part of the government drive to create a ‘hostile environment’ for illegal immigrants in the UK.

Under the Immigration Act 2014, banks and building societies are already required to carry out checks when opening current accounts for the purposes of identifying ‘disqualified persons’.
Next year will bring tighter obligations on institutions to check individuals who hold or are opening accounts. As well as increasing the number of checks required, a wider range of accounts will become subject to the checks – to include “any financial product by means of which a payment may be made”.

How will the searches be undertaken?
These checks will be done by way of searching the person’s name, date of birth, and address on the Credit Industry Fraud Avoidance System (CIFAS) database (supplied by the Home Office).

What happens if a check reveals the individual is a disqualified person?
The Home Office must be notified if a check identifies an individual suspected to be a disqualified person. The bank or building society must then await Home Office confirmation as to whether or not that person is a disqualified person. If they are a disqualified person, the Home Office can apply to court to freeze or close the account (this can be done without notice).

If an account is frozen, the individual might be entitled to a reasonable sum (to be decided by the court) from the account to cover their living expenses and legal costs. An exception may also be made to allow a joint account holder to make withdrawals or payments from the account.

As an alternative to applying to have an account frozen, the Home Office can notify the bank that is under a duty to close the account.

What does this mean?
Apart from the obvious resources required to implement these initial checks, there are initial concerns that there could be cases of mistaken identity, or where there are mistakes or insufficient details entered in the Home Office Database. As Zoe Harper of the Immigration Law Practitioners’ Association has said: “The Home Office frequently provides incorrect or out-of-date information about a person’s immigration status and the closure of their bank account in error is likely to have an extremely disruptive impact given the need for an account to receive a salary or meet ongoing rent or mortgage payments.”

The risk of someone wrongly being suspected (or even identified) as a disqualified person and having their accounts frozen has potentially serious implications for the individual involved – particularly if they face losing their job, or have a family to support.



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