Post-prison bank accounts: Westpac to help those newly released

Sunday, 29 November 2020

It’s a struggle for many prisoners to get bank accounts opened after they are released.

Released prisoners are struggling to open bank accounts, and during lockdown things got so bad some were being released with $350 pre-loaded Westpac debit cards instead.

Rachel Ngatai from prisoner release support service Pars said a bank account was essential for people trying to reintegrate into society, but banks routinely shut people’s bank accounts when they went into prison.

On leaving prison many people lacked formal identification documents, and a permanent address, effectively barring them from getting an account.

Westpac chief executive David McLean hoped a pilot project between Westpac and the Department of Corrections would change that. He said he first became aware of the issue two years ago when he saw newly-released prisoners in a Westpac branch cashing release cheques because they couldn’t open accounts.

Westpac chief executive David McLean witnessed first-hand newly-released prisoners unable to open bank accounts.

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“I became aware of this issue standing in one of our branches and watching these guys come in on their release. Clean T-shirt, and jeans, and they had been given a cheque for something like $250, and a bus ticket to Auckland,” McLean said.

They were government cheques issued by Westpac, the government’s banker.

“They didn’t have bank accounts, so they had to cash the cheques,” said McLean.

“They’ve done their time and here we are saying to them, here's your cheque, good luck, get on with your life.

“It’s really impossible to imagine how you could function properly in society these days without a bank account,” he said.

The problem was strict anti-money laundering laws prevented banks from opening accounts for people who could not prove their identities, he said.

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“To open a bank account now, you basically need a driver’s licence or a passport, and many prisoners would not have those, and you need to have something like a utility bill to your residential address, and by definition, they don’t have that,” McLean said.

But Corrections could verify the identity of prisoners being released, and provide them with identification documents acceptable to the banks, he said.

So far, the pilot scheme had allowed 110 prisoners to get accounts using them, McLean said.

Not every prisoner would get an account, however, and to date, 14 prisoners who went through the pilot had been turned down.

McLean said: “Every bank would reserve the right to say, we’re sorry, we just don’t think you are our type of customer.”

Anyone who had been violent or aggressive to Westpac staff would not get an account, McLean said.

But banks would also make decisions on whether people posed a high risk of using their bank accounts for illegal purposes, including people who had been imprisoned for money-laundering, or paedophile offences.

In 2019, Westpac in Australia was forced to apologise when it failed to prevent paedophiles making international bank transfers to pay to view online child abuse.

'The notion that any child has been hurt as a result of any failings by Westpac is deeply distressing and we are truly sorry,' Westpac’s chairman Lindsay Maxsted said.

McLean said Westpac could limit the functionality of accounts they gave people, such as not allowing international transfers.

Ngatai welcomed the pilot, saying in her 17 years with Pars, problems for released prisoners opening bank accounts had been a persistent issue.

Some successful systems with banks, including Westpac and Kiwibank, had eventually broken down.

Ngatai said people deported from Australia on release from Australian prisons struggled to open accounts here.

Pars had been successful in opening accounts at Kiwibank for these deportees from Australia, until it realised the application addresses were quarantine hotels, which the bank did not recognise as a residential address.

McLean said he was not aware of the issue, but said he hoped the Westpac pilot could provide a blueprint for making it easier for other groups to get bank accounts, like homeless people.

Other issues also needed addressing, said Ngatai.

The Steps to Freedom Grant of $350, given to prisoners who had no money, to help them move back into society, had not been increased in more than 15 years, she said.