The fallout over the closure of Nigel Farage’s bank account has shed light on how financial institutions handle “politically exposed persons”, whom they may view as high-risk clients.
Farage, the former Ukip leader, who held a bank account at the NatWest-owned private bank Coutts, obtained and published a dossier showing that the bank closed his account after identifying him as a reputational risk. The internal report stated that Farage’s views “do not align with our values”. Two executives at NatWest banking group – CEO Alison Rose and Peter Flavel, head of the bank’s Coutts division – have since resigned.
But people who occupy prominent public functions are not the only ones to be affected by loss of access to financial products.
For people working in commercial sex, the often unexplained closure or denial of bank accounts is an all too frequent occurrence. And their experiences hardly attract the same quick government intervention and response from banks as Farage.
Escorts, in-person sex workers, cam and pornography performers, sexual products business owners and others operating in adult entertainment have discussed their financial exclusion ordeals on social media and in various news outlets around the world for years. More recently, sex worker organisations and researchers have begun collecting evidence of the extent and impact of this discrimination.
What is evident from the expanding research is that, even though their commercial sex practices are legal and earnings legitimate, sex workers and adult entertainers are frequently denied or revoked access from financial products. This can include business and personal bank accounts, overdrafts, mortgages, loans, merchant banking services, credit card services, e-wallets, e-payments and more.
A 2021 report from National Ugly Mugs, a UK charity fighting to end violence against sex workers, shows evidence of financial discrimination by various UK-based financial institutions.
The report highlights the experiences of sex workers who were explicitly told by banks that the decision to withhold their services was based on their involvement in the adult industry. Others received no justification for the closure or denial of bank accounts, but did not inquire further about the reasons of their exclusion, for fear of being denied accounts elsewhere.
‘They do not want you at all’
My ongoing research on sex work and financial exclusion with colleagues from the University of Nevada shows that people working in the legal adult entertainment industry in the US experience similar exclusions. As a sex worker operating in a legal Nevada brothel told us:
Once the bank figures out you’re a sex worker, they don’t want to offer you any services at all whatsoever. They do not want you at all.
Another participant told us that such exclusions can persist even after leaving sex work. She spoke of a friend who had been out of the legal brothel industry for more than a year, but was still unable to open a bank account.
Financial services are indispensable for carrying out most professional and personal activities. But our respondents felt they were not in any position to challenge the exclusions they faced. One told us that the fear of being permanently denied access to financial products stops them from speaking up:
Generally banks don’t exactly say why, [and] we don’t exactly say why either because it’s so dangerous.
She also described being “thankful that it’s not worse than that”, after having a bank account closed – but not having her funds seized.
Most of our respondents reported long-term freezing or loss of funds, specifically when dealing with online payment services. As most adult entertainment services are now facilitated online, access to digital financial infrastructure and e-payments is ever more important.
But many online payment platforms have a ban on “sexually oriented goods or services”. As Natasha Tusikov, an expert on crime, technology and regulation describes, this is a form of sexual censorship that leaves people with limited digital payment options, many of which charge high fees.
The toll of financial exclusion
Having to hide their occupation, living in a constant state of fear of being “debanked” (losing access to bank accounts) has a heavy toll on sex workers’ lives. This even more so for undocumented migrants, or others who face discrimination on the basis of their race, class, gender and sexuality.
Financial exclusion is not only a source of anxiety and depression, but has harmful ripple effects. It prevents people from accessing loans and mortgages, it reduces opportunities to save, plan finances for the future or change occupation. It can lead to homelessness and loss of financial autonomy.
As one of our respondents told us, missing a rent payment and getting evicted can lead to suicide:
When someone is debanked, people die, and I want to say this bluntly. This is a deadly issue.
Sex workers and organisations who advocate for their rights are challenging these practices. In 2021, a group of UK-based sex worker-led organisations wrote an open letter demanding the end of financial exclusion by financial institutions. In the US, sex workers and civil rights organisations have been campaigning to stop payment platforms from shutting down sex workers’ accounts without due process, and to challenge the exclusionary adult content policies of credit card networks.
But as our participants pointed out, the stigma that surrounds the adult entertainment industry prevents many from coming forward. Some are concerned that publicly challenging financial institutions might result in being permanently banished from them. Unlike well-known political figures, vulnerable people in a stigmatised industry have limited expectations of redress after being excluded from financial services.