U.K. Banks Warned by Industry Regulator Over Sex Worker Debanking

LONDON—The Financial Conduct Authority (FCA), a financial services industry regulator independent of the United Kingdom's national government, recently warned against banks denying banking products to adult entertainment industry businesses and sex workers.  According to a September 4 press release, the FCA published the findings of a new report that encourages banks and lenders to do more to support banking access. The report specifies findings derived from roundtable discussions and information gathering involving adult entertainment companies who reported being denied or discriminated against when it comes to banking product access. Other companies facing concerns include United Kingdom-based charities and pawnbrokers. "We’ve seen examples of really good practice—with account providers helping people access a product vital for financial inclusion—but also areas where there is room for improvement," said Sheldon Mills, FCA's executive director of consumers and competition, in the same press release. "By sharing both, we want to achieve more consistent outcomes, with people being aware of what accounts there are that might be right for them, more support for the vulnerable, and people not being denied access without good reason." The report, titled "UK Payment Accounts Access and Closures: Update," indicates some of the challenges adult entertainment companies and sex workers have faced in acquiring, maintaining and retaining access to financial services products throughout the country. "We recently led a roundtable which focused in part on consumers working in the adult entertainment industry," the report says. "We heard observations that support the concerns identified above, including reports of the payment accounts of relatives of those working in the adult entertainment industry also being terminated." The rationale given by the banks for closing accounts for consumers working in the adult entertainment industry and their relatives stems from claims of countering harm to reputations and countering potential criminal activity. This claim is common with banks in the United States, too, which have said that accounts for porn stars might be open to greater scrutiny even if no criminal activity is directly or indirectly linked to how the funds earned by the individual were acquired and deposited.   "With regard to the adult entertainment example, several firms noted that they would, in theory, onboard customers from the sector," notes the report. "However, in practice, we have seen examples of those firms denying or terminating adult entertainment business accounts." The report explains, "The rationales given by firms for these exits were usually based on financial crime or reputational grounds.   "But, as adult entertainment industry representatives explained to us, these account denials or terminations could lead to significant harm for individuals running those businesses, particularly if they then had to rely on cash or personal bank accounts for their work, with the latter revealing their name to their clients and therefore exposing them to blackmail," the report's findings conclude.   FCA then goes on to recommend steps for financial institutions to provide greater access for these people.   Financial discrimination and debanking have remained a consistent issue for sex workers and adult entertainment professionals in Europe and North America.   In the United States, it is increasingly challenging for sex workers to have reliable access to financial services.   Also, being that many sex workers identify as LGBTQ+ individuals, BIPOC people, or members of other historically marginalized communities, debanking has directly harmed these individuals' abilities to work, earn incomes, and exercise their First Amendment rights.   These factors have compelled adult industry trade group the Free Speech Coalition to begin exploring the possibility of forming an industry-only credit union.