A homecoming nightmare you just wouldn't bank on

Direct debit mix-ups, interest-rate confusion and slow service are just a few of the daily hazards suffered by today's bank account-holder. However, Nicholas O'Hara-Smith has just faced a snag of a completely different kind. He couldn't open a bank account.

Mr O'Hara-Smith, a computer engineer, came back to the UK in August last year after seven years working in Toronto, Canada. After contacting friends and relatives and getting a place to live, he needed to find a new job and open an account.

So he went to a local branch of Barclays to do just that. After showing them his passport and a banker's draft worth £8,500, he was confident it would go through and he could start making transactions. Then a Barclays supervisor told Mr O'Hara-Smith the bank would not take him on.

'I simply couldn't believe what I was hearing. I showed them my passport, which bears a clearly identifiable photograph of me, my Canadian driving licence, and a banker's draft issued by the Toronto Dominion Bank, which has offices all over the world, but they still wouldn't accept me,' says 50- year-old Mr O'Hara-Smith.

Chastened by his experience, Nuneaton-born Mr O'Hara-Smith applied for a UK driving licence. It arrived six weeks later, confirming his new address in Isleworth, Middlesex. He then approached a local branch of Lloyds TSB. 'I felt very confident. After all, I had a UK passport and a UK driving licence which showed my permanent address,' he says. But, once again, he was turned down. 'The bank said I needed to produce a utility bill in my name,' he says.

By now it was mid-October - 10 weeks after he had arrived back in the UK - and he had only brought enough cash with him to cover his daily living expenses. Not surprisingly, he was getting desperate.

However, a few days later he received what he thought might be his genuine passport to success - a letter from NPower, the utility provider, confirming him as a new electricity customer.

He took the letter, his UK passport and licence to a branch of HSBC, confident that no UK bank, let alone any high street institution, could possibly turn him down again. But he was wrong. They proceeded to do just that - for the third time.

It seemed that no bank was going to accept Mr O'Hara-Smith as a customer. And he was even thinking of going back to Canada. Then he received an NPower bill. This time he decided to take a chance with a local branch of Abbey National. After a short interview and a blow-by-blow scrutiny, he was told that he could finally open the account he had been striving to get for so long. 'It was fourth time lucky and I was absolutely delighted. I was almost at my wits' end and virtually relying on the generosity of my friends and family,' he says.

However, his problems were not over yet. After paying in his banker's draft, Mr O'Hara-Smith thought it might take a week - or two at the very most - to clear. Two weeks later, he was still waiting. Most of December passed by until, a few days after Christmas, his money eventually came through. 'It had taken two months for the cash to go on to my account - and Christmas was a little bleak for me,' he says.

Now a more reflective Mr O'Hara-Smith says: 'We may have all the sophisticated technology in the UK, but we lack the means to put it into practice and we certainly lag years behind Canada and the US. Going through all this red tape and then having to produce a document that shows you are paying bills in a certain residence is quite absurd.'

An HSBC spokesman comments: 'We would accept a UK passport and a full UK driving licence that shows a permanent address. If the applicant has lived at the address for less than three months, he or she has to show proof of their previous address.'

A Barclays spokesman points out: 'When we take on new customers we have to establish both who they are and where they live. The best way to do this is to produce a utility bill.'

This week, Mr O'Hara-Smith heard he had been accepted for a Telewest broadband account - though it too took him more than a month to get: 'I kept phoning them for five weeks, but the company would not accept my Canadian Visa card as payment, or any of my other details. In the end I had to get a friend to help me out and establish my credentials.'

He adds: 'When I went to Canada in 1995, it took me only two days to open a bank account.'

Account for yourself

Banks have become a great deal more suspicious of new customers since the Government introduced laws nine years ago aimed at preventing criminals from using accounts to launder cash.

The British Bankers' Association has drawn up guidelines for banks on how to comply with the regulations, but banks operate differing systems. They may also change their vetting requirements from time to time to keep criminals on their toes.

A spokeswoman for the BBA recommends that anyone wanting to open an account should ask to speak to a senior member of staff. The BBA says that by law, staff must verify an applicant's identity and address, and cannot use the same document to verify both. Common documents requested are:

· Gas, electricity, water or telephone bills;

· Council tax bills;

· Driving licences;

· Passports;

· Known' employers' identity cards;

· Pension or social security books;

· Medical cards;

· Inland Revenue documentation;

· Insurance certificates;

· Mail order company statements.

The BBA says banks have procedures for dealing with people who cannot prove their identity with the usual official documents, though it warns that 'the law requires that you must provide satisfactory proof of your identity and address. If you cannot meet these requirements, then under the law the bank or building society must not open an account for you.'