A Merseyside-based homelessness charity decided to switch its banking provider after its account was blocked by Santander over Christmas.
Paper Cup Project, which supports people experiencing homelessness and runs a coffee shop in Liverpool, was founded by CEO Michelle Langan in 2015.
Langan first began experiencing difficulties withdrawing money from the charity’s account on 16 December when she was trying to pay staff ahead of Christmas.
In September, she contacted Santander to update the list of trustees who were account signatories and thought no more of it until the difficulties arose two months later.
Langan told Civil Society that despite hours of phone calls with Santander staff, she was only told that the charity’s account had been locked due to unspecified “missing paperwork”.
However, on 2 January, the situation escalated when Langan was informed that Santander had decided on 17 December that they would close the account due to allegedly not having heard from her.
Charity founder had to borrow from her own savings
In order to pay her staff before Christmas, Langan said she had to borrow £10,000 from her personal bank account.
She made this decision as not paying her staff felt cruelly ironic “because as a homelessness charity, we’re always saying most people are one or two pay cheques away from homelessness”.
Langan has said that although the charity’s bank account has been unblocked, she is yet to receive an apology from Santander or any offer of compensation. She has since made the decision to switch the bank account to a new provider.
“We have wasted more time than necessary trying to resolve this simple issue,” she said.
“I would urge all charities to choose wisely when they are opening a bank account.”
Other charities report banking issues
However, Paper Cup Project is not the only charity to have suffered from having its bank account blocked without explanation by Santander.
Since Langan’s story was published by BBC News on 5 January, two other charities have since contacted her for advice, disclosing that they have had similar experiences with the bank.
One of the charities – York Coronary Support Group Trust, whose most recently recorded annual income was just over £94,000 – has reportedly been left unable to pay nurses that it employs since November last year.
More broadly, according to research by the Civil Society Group published in November, over nine in 10 charities have experienced at least one banking-related difficulty in the past two years.
The Charity Commission has called on the banking sector to improve its services for charities in recent years and criticised a lack of progress.
Santander has been contacted for comment.
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