“My word is my bond” – but not for EU citizens in the UK!

As many of you know, I recently moved to the UK to start a PhD. (that is also the reason why this blog has been a bit silent recently).  Everyone that has ever moved abroad knows that it is quite a mess especially in the first couple of weeks. In my case I had to settle down at the University, find a place to live, get a new phone number and a new bank account. As I lived in several other countries before, finding a suitable place to live is the most difficult thing to do usually (at least for me)…

But this time it was a bit different. Surprisingly, the most annoying issue surrounding my move has been the UK banks. (And I am not talking about the financial super crisis… and Gordon Browns rescue plans for the banks and himself).

The situation is as follows: I am a postgraduate research student with a studentship (= regular income for the banks, right?) and I am a EU citizen. What do I need? – Basically a cheap (preferably free) current account with a debit card that I can use everywhere in Europe. Since I will be travelling a lot, it would also be good to be able to use the debit card without any fee abroad. You might ask yourself how I came up with these specification? Well basically that is the kind of account I have in Germany. As you can see, I neither need a flexible overdraft scheme nor a proper credit card.

So what happened? Innocent as I am I walked into several high street banks and told them my story. I expected to be treated as a normal student (we are all Europeans, right?) and I expected to be offered a student account (which is usually free of charge and comes with a couple of freebies). But instead I was offered either an “international account” (for “only” £5 -7 a month!) or a cash account (free but usually given to teenagers, so the debit card is not really accepted everywhere).

So what is the problem? I don’t have a credit history in the UK! And I suppose because the UK has not joined the Euro they also do not accept credit histories from other European countries. OK, fair enough, but actually I would be flexible on that as I do not need a flexible overdraft scheme. What actually struck me most about it are two things: The inflexibility of the banks (since I always thought the financial sector is more flexible in the UK than elsewhere in Europe) and the absolute absence of any “European” rule. Basically for the bank it does not make a difference whether somebody is a EU citizen or comes from a country in Africa or South East Asia.  Needless to say that most banks charge huge fees on anything that happens abroad (withdrawals, purchases, transfers). I assume that all this is connected to not being a member of the Eurozone…?

In the end, I decided for one of the “teenager accounts” and I am planning to get another account next year with a different bank (because then I will have credit history…although having no overdraft scheme makes it a bit difficult to prove that). Another proof that something is not working properly here is the following. I have to wait for ONE week to get the account number and TWO weeks for the debit card. Every other bank in every other country (even Belgium!) I used so far was much quicker… I expected to get the number immediately and the card 3-4 days later…

And I really had to laugh while waiting at one of the banks. The TV showed Gordon Brown explaining the financial crisis and that the motto of most brokers is “My word is my bond”… It obviously only applies to brokers and not to customers.

PS: And while we are at it: Another issue that is clearly discriminatory is the issue of Research Council Studentships. You do not need to be British to get one but you must prove that you have been a UK resident (which is funny because there is no registration process….) for three years. At first sight that sounds like a reasonable thing but just think a bit further: British citizen would also be excluded if they decided to study in another EU country for their Bachelor. But the rule is not fair here: British citizens can always claim to have lived at their parents address for these three years…  So who is excluded from the whole scheme? EU citizens (that is Non-British) that on paper are supposed to have the same rights everywhere in the EU! Well of course it is also against the whole idea of making Europe the “most innovative knowledge based society”… but that is already the story of another blog post, I suppose.

Update 25/10/2007: So after 1 week I got my account number, after almost 2 weeks my debit card. I even got my activation code for the Internet banking. However, the PIN code for the debit card is still missing. After reading through the letter I learnt that I had to “activate” my debit card either online or by returning a letter. So after “activating” my online banking account (with the “online activation code”) I was really happy that the “activation” of the debit card actually worked online! So hopefully they will send also the PIN soon since without it the card is pretty useless. Then I had this crazy idea to actually “use” the online banking since I had “activated” it. So, I found out that I needed to order a “card reader” which I somehow expected since they did not send me any online PIN numbers … but the next surprise came immediately: It can take up to 15 days to deliver this card reader!!!

So, the only way that I actually can get my money is queuing at the cashier in a branch of the bank…. (I don’t think I have ever done that in my life…)

I have not yet given up hope as it might be the problem of this particular bank. However, I think this is just ridicolous and not acceptable. It basically can take more than a month until a bank account is fully functioning (+ all the other restrictions I have to live with!)…

Just to put that into perspective: I lived in Belgium, Germany (both famous for bureaucracy) and Romania (known for not being quite as efficient as the rest of Europe), but in all of these countries this whole process of opening a bank account (with debit and credit card, online banking and telephone banking) takes no longer than 3-4 days!


9 responses to ““My word is my bond” – but not for EU citizens in the UK!

  1. Captain Eurotrash

    Having recently moved to France I can empathise with your difficulties. Things that should work relatively seamlessly on paper are a PITA in reality. For the most part I’m just another foreigner and my rights are not a given; I have to explicitly demand that they be respected. I do not expect to be treated this way and I find it quite offensive.

  2. Actually, you can get your fees paid whether or not you are UK resident. It’s only the maintenance grant that is covered. This is the UK interpretation of ECJ case law on students’ rights. It might get challenged in the future. And I wouldn’t be too sure that someone who had done their undergraduate degree outside the UK, and but said they hadn’t been outside the UK by nominating their parents’ address, wouldn’t get “caught out” by the research councils. They do pretty rigorous eligibility checks and err on the side of chucking people out of the competition, not including them in. I sympathise on the banks issue. It’s a combination of ridiculous levels of compliance with money laundering legislation, plus a partiuclar “approach” to credit history questions.

  3. Thanks for the clarification. I should have been a bit more specific on the Research Council issue. It just came to my mind because some banks also stressed the residence rule in order to be eligible for a student account and somehow this seemed familiar…

    It is true that you can get your fees covered as a EU citzen but, still, I think this is discriminatory because British students get a maintenacne grant as well.

    Interesting that they really check these kind of things, I would have not expected that. However, the whole issue seems very debatable and I hope that it will get challenged in the future. If even British students can run into problems, there it is really a strong case for changing it, I guess.

    Somehow, the higher education system should focus more on quality and research than on rules about residence …

  4. It’s a very limited pot – support for research students from the research councils. Plus, it’s always been the case that the applicability of the non discrimination principle in relation to higher education financial support has always been limited under ECJ case law. Whether it’s challengeable under the current state of EU law is very moot.

  5. hey folks, here’s chuck! chuck doesn’t like banks. they are full of bad people who make even meaner plans and that are just the customers. so chuck thinks mr gordon and mr brown should adress mr bond as the prime minister announced. because otherwise our whole nationships and boats would be missing in action.

    farewell and c u soon with a quantum of solace!

    c. n.

  6. Agh, it’s so damned stupid… I’ve lived for most of my life in the UK hence they will really easily give me a massive credit limit on my credit card that I don’t need. Plus it’s all so damned system-based – there’s no way to show proof of income and hence make a bank be more flexible.

    I also suspect that you haven’t tried to register with a doctor because that is probably going to be a further exercise in futility.

  7. Show me the money!!! Show me the money!!!

    I guess they need a little Jerry Maguire over there …

  8. Good luck! You’ll find many odd things in the UK. As for banks, look at a few issues. First, in the UK banks are obliged by law to offer banks accounts for free. This means: they simply restrict access to bank accounts as a compensation. Second: the retail banking sector is a cosy oligopoly of a few highstreet banks. They don’t bother about penniless students (I had no pb opening a bank account with HSBC as a Master’s student at the LSE – PhDs and other universities are pbbly considered more risky). Transport infrastructure in the UK will be another puzzle, and general inefficiency of public services. Health care the same: it’s awful. But fully free and run by the government. And don’t forget: the UK is an island. The EU: the average Brit does not know what it is…. But after a few years you’ll probably be in love with the country, and its general openness and tolerance. You might find it hard going back going back to the Continent…

  9. Don't hassle the Hoff

    Nice to hear you’re in the UK, where are you studying?