Home Office guidance for banks and building societies regarding immigration status checks

The Home Office recently published updated guidance for banks and building societies on carrying out immigration checks on current account holders. Here is what you need to know.

The guidance was updated to remind banks and building societies of their obligations to comply with immigration laws. Most notably, to prevent these financial institutions from opening or operating current accounts on behalf of individuals disqualified from accessing those services due to their immigration status. 

Who is disqualified?

If an individual does not have valid permission (but needs it) to be in the UK, they are disqualified from opening and operating a current account in the country. 

Prospective applications

Banks and building societies must check all prospective and existing current accounts of adults (aged 18 or over) against the Home Office database of disqualified individuals. If the check returns a positive match, the financial institution is obliged to refuse a bank account application. Further, the bank or building society must communicate the reason for refusal to the disqualified person unless their account is involved in criminal investigations, such as money laundering.

Existing accounts

The guidance specifies that checks on existing accounts must be done quarterly. If a match is found, the financial institution must notify the Home Office, which will then undertake additional steps to confirm the validity of the data. The Home Office will then issue instructions to the institution, which can range from no action to a freezing order or closure of the account. The financial institution must fulfil any instructions given, usually as soon as practicable.

What if the database holds incorrect information?

Where a customer is able to show that they are lawfully in the UK, the bank or building society should refer them to the contact details for the Home Office. The Home Office will investigate the matter, and if they agree with the customer, they will take the individual off the list of disqualified persons. The customer can then make a fresh application for a current account and be subject to the bank or building society’s usual approval criteria.

Freezing orders

Where the court makes a freezing order concerning an account in a bank or building society, the institution must prevent a disqualified individual from making further payments or withdrawals to and from their account for the duration of the order. However, there may be conditions under which certain withdrawals for living or legal expenses may be permitted.

What to do if my bank account is due to be closed or frozen?

Being deemed disqualified or receiving a freezing order can be a stressful experience. In such situations, it is common for banks or business societies to restrict access to your current account, leaving you with limited options. We recommend that you seek professional legal advice to see if the situation can be resolved.

How Gherson can assist

Gherson’s Immigration and Financial Crime teams are highly experienced in advising on immigration and financial matters. If you have any questions arising from this blog, please do not hesitate to contact us for advice, send us an e-mail, or, alternatively, follow us on Twitter, Facebook, Instagram or LinkedIn to stay-up-to-date.

The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.

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