An adviser to a new charitable incorporated organisation that spent more than a year trying to open a bank account has blasted Barclays for its onerous demands and disproportionate due diligence.

Learn Appeal, a new charity that aims to help the elearning industry use its specific skills to benefit society, applied to Barclays Corporate on 23 March 2013 for a bank account.

This was the start of a long and tortuous process during which the bank made endless requests for documentation and signatures from the charity’s administrator and trustees. After nine frustrating months the charity abandoned its efforts with Barclays and turned to HSBC.

HSBC’s process was not altogether simple either, but it did finally open an account for Learn Appeal in March this year - one year and three days after the charity had first applied to Barclays.

Jan Morgan, a consultant who has been advising the charity on its establishment, described the process as “ridiculously complicated and eternally frustrating”.

She said that every time the charity provided the forms that Barclays required, the bank would ask for something more.  

“They said they needed one trustee’s signature on a form, but when we provided that they told us no, they needed all the trustees’ signatures – even if the form stated it only required one trustee to sign it. This happened again and again,” Morgan said.

As all the trustees live in different parts of the country, it was a long and arduous task to get all four signatures on various forms.

The bank also demanded large amounts of personal detail about each of the trustees, even though two of them already had bank accounts with Barclays.  And at one stage it required the physical presence of all the trustees at the bank at the same time. “It was as if they didn’t believe they were real people,” Morgan said. “It was beyond a joke.”

In the end she became so frustrated that she lodged a formal complaint with Barclays’ chief executive, but received no satisfactory response to that either.  “We did get one email asking for a form to be signed by the chair simply so they could send me the outcome of my formal complaint…at that point we gave up and approached HSBC.”

Morgan said the reason given by the bank for its zealous due diligence was that it needed to protect itself against the risk of money-laundering.

The fact that Learn Appeal was a CIO probably didn’t help, she said, because all the bank’s forms referred only to limited companies.  But she was convinced that Barclays “didn’t understand charity either”.

“They had no concept of the legal role of trustees,” she said. “I don’t think our experience would have been markedly different if we had been a conventional charity.”

Negative repercussions

The long delay in getting a bank account open has had significant repercussion for Learn Appeal.  It has been unable to fundraise or register with HMRC for gift aid, and Morgan is fearful that the organisation may also have lost some credibility among the industry it is seeking to work with.

Learn Appeal has been talking to the elearning industry about its ideas for nearly two years now, and at first the elearning companies were supportive and enthusiastic, said Morgan.

The charity had hoped to launch at the annual elearning show at Kensington Olympia, first in January 2013 and then, when that was missed, in January this year, but was forced to miss both because of the lack of a bank account.

“We couldn’t raise funds if we had nowhere to deposit them into,” she explained.  “We couldn’t even get a raffle going. We’ve lost at least a year of fundraising activity.

“And because we’ve missed two years of the annual event, we’ve rather lost some of the momentum we’d built up at the start, so it’s had reputational consequences too.”

Barclays Corporate refused to respond

Barclays Corporate declined to respond to enquiries from Civil Society News about Morgan's claims, first requiring confirmation that Morgan was "legally authorised to speak on behalf of Learn Appeal". 

A spokeswoman for the bank said: “Before we can respond we need to make sure the trustees are aware of what’s been said to you and are happy with this information that’s been relayed to you.

“It wouldn’t be appropriate for us to talk to you about a business that could have become a client if the board of trustees weren’t aware it was even happening; it wouldn’t be fair to the organisation.”