Sex workers are facing increased difficulty accessing basic banking services in the UK due to closures and freezes on their accounts by major banks. This practice is known as debanking, and the country’s Financial Ombudsman’s Service has just reported a 44% year-on-year increase in complaints about the practice. Campaigners say it disproportionately affects a vulnerable population and pushes them towards unsafe financial alternatives.

The vast majority of the people in this industry are women, and one has launched a petition demanding MPs ensure sex workers have access to banking services. It has gathered 11,000 signatures. The petitioner said: “I work in the sex industry and have been refused for 15 bank accounts because of the nature of my job even though it is completely legal and I am registered with HMRC. People should not be discriminated against because they work in the sex industry.”

In response, the Government said it is “seeking to ensure everyone can access useful financial products and services. For individuals having difficulty opening a personal bank account, the nine largest personal current account providers in the UK must offer fee-free basic bank accounts to ‘unbanked’ customers.”

Online payments

As the use of cash declines, people are becoming increasingly reliant on online payments. Campaigners argue that denying banking services increases the risk of sex workers being forced to accept cash payments, making them targets for theft and violence. They also point out that sex work is legal in many areas, and workers deserve the same financial protections as everyone else.

Banks, however, are concerned about the possibility of being fined for handling money linked to illegal activity. The sex industry can be associated with human trafficking and money laundering, which banks are obligated to prevent.

Sex work and brothel-keeping is illegal in England and Wales, although selling and buying sexual services between consenting adults is not against the law. 

“Banks are, in effect, presently self-regulating their own licence to disenfranchise selected members of the public by unilaterally withdrawing (or denying) those individuals or groupings access to the banking system.”

Agnes Foy, lawyer

We spoke to seasoned commentator and lawyer Agnes Foy. She said according to Decrim Now, the campaign group led by sex workers, more than 80% of SWU (Sex Workers Union) members have experienced some form of financial discrimination.

“In my view, it’s not just irrational – it also amounts to institutionalised brutality (warped-values grade) – that, despite being required to pay taxes (because HMRC recognises that the exchange of sexual services is legal), banks are being allowed to eject sex workers from the banking services system.”

“Banks are, in effect, presently self-regulating their own licence to disenfranchise selected members of the public by unilaterally withdrawing (or denying) those individuals or groupings access to the banking system,” said Foy.

The All-Party Parliamentary Group on Fair Business Banking criticized banks for “offloading customers” seen as potentially high-risk or controversial, including sex workers, bookies, yacht brokers, crypto businesses and politicians.

The report said it exposed “an awkward truth – that the financial, regulatory and reputational pressures facing banks are prompting more and more firms to decide that many clients, and some whole industry sectors, are simply not worth the candle”.

Risk analysis and regulation

UK Finance, the trade body for Britain’s financial institutions, told GRIP that the freezing or closing of accounts was often done based on analysis of risk and regulations.

A UK Finance spokesperson said: “Access to banking is vitally important and we understand the impact of account closures. The APPG report rightly highlights that some groups carry increased risks to financial services firms, it also acknowledges that the financial sector is the ‘first line of defence’ against financial crime.

“Banks must comply with strict legal and regulatory requirements and while banking the proceeds of sex work is not a criminal offence, the potential related risks are very high. Lenders will make a decision about this based on their own risk appetite, but only after extensive review and investigation.” 

“By far the most common reasons providers gave for closing, suspending or declining an account was because it was inactive/dormant or because there were concerns about financial crime.”

FCA

A Santander spokesperson said: “Provided our onboarding checks are all successfully completed, we will consider applications from individuals operating legally in the adult entertainment sector.”

Any account would be assessed individually and in line with all relevant Santander policies, legislation and regulatory guidance and reviewed on an ongoing basis, they added.

We asked the FCA for comment and they referred us to the FCA’s review of how lenders are closing accounts. It said it is working with firms “to better understand the reasons behind, for example, the closure of accounts due to reputational risk.”

It added: “By far the most common reasons providers gave for closing, suspending or declining an account was because it was inactive/dormant or because there were concerns about financial crime.”

The debate highlights the complex relationship between sex work and financial inclusion. Striking a balance between protecting banks from illegal activity and ensuring the safety of sex workers is an ongoing challenge.