Image © Pound Sterling Live
UK high street lenders have been accused of "outrageously failing" British expats living in Europe following weekend reports that they would be shutting down their accounts after the UK leaves the EU at the start of 2021.
"Most of the UK’s high street banks are plotting to unceremoniously abandon their customers across Europe within weeks," says Nigel Green, the CEO and founder of deVere Group. "Once again, traditional banks are outrageously failing their clients."
It was reported Lloyds, Barclays and Coutts are among amongst those UK banks that have starting giving notice to expatriate customers to say they will close their accounts at 11pm on December 31.
Coutts is owned by Natwest Group, which hints that the same will apply for customers right across the group.
"Accounts will be shut and debit and credit cards voided – regardless of how much or how little you have in those accounts or how long you have been a client - as it becomes illegal for UK banks to service British customers living in the EU without applying for new banking licences," says Green.
According to a report in the Sunday Times, the end of the withdrawal agreement makes it a "bureaucratic nightmare" for UK banks to provide for British customers in the EU post-Brexit, with many simply choosing to pull their services.
"Once again, traditional banks are outrageously failing their clients who now need to take urgent steps to continue to be able to access, use, and manage their money," says Green. "The move by these banks will be a major inconvenience to many tens of thousands of Brits living in the EU."
Before post-Brexit rules come into effect, those affected are being urged to find alternatives to avoid potentially serious financial disruption.
"I would urge expats to now seek a financial services provider that already operates under pan-European rules," says Green.
The Sunday Times says the decision to withdraw services to Britons living in the EU comes as the UK's financial sector looks set to lose "passporting" rights. Passporting allows financial firms across the EU to offer services in other EU countries, without such rights firms cannot operate.
"The 1 January 2021 will bring big changes. UK firms will lose the benefit of financial services passports. This should not come as a surprise. We have been warning about this for the past 3 years,” said EU Chief Negotiator Michel Barnier on June 30.
Barnier warned financial services firms based in the UK that they should make rapid preparations to ensure they are ready for the loss of passporting rights into the EU come January 01.
"The UK is trying to keep as many Single Market benefits as it can. It would like to make it easy to continue to run EU businesses from London, with minimal operations and staff on the continent," said Barnier. "We will only grant equivalences in those areas where it is clearly in the interest of the EU; of our financial stability; our investors and our consumers."
From January 01 it will be illegal for UK banks to provide for British customers in the EU without applying for new banking licences.
A source at one leading British bank told the Sunday Times: "In some cases, continuing to serve customers would be incredibly complex, extremely expensive and very time-consuming, and simply would not make economic sense. This is passporting — this is the reality of Brexit.”
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