Millions of current accounts to be scrutinised in hunt for migrants liable for deportation or who have absconded from detention

Banks and building societies have started immigration checks on holders of millions of current accounts under a government crackdown.

The scheme was introduced by ministers as part of attempts to create a “hostile environment” for those staying in the UK unlawfully. It requires banks and building societies to check the immigration status of all current account holders against details of known illegal migrants held by authorities.

Where an illegal migrant is found to be operating an account, this will be flagged to the Home Office. After checks, officials will instruct the bank or building society on what action to take, which could include shutting the account.

Immigration minister Caroline Nokes said the measures would “make it more difficult for people with no right to live or work in the UK to remain here.”

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She added: “This will not affect those who are in the UK legally but we must be firm with those who break the rules, as illegal immigration impacts the whole of society.

“Those living and working in the UK illegally can drive down the wages of lawful workers, allow rogue employers to undercut legitimate businesses and put pressure on taxpayer-funded public services.

“By tackling abuse in this way, we can build an immigration system which works in the best interests of the country and prevents vulnerable people from finding themselves at risk of exploitation.”

The Home Office said it was only sharing details of illegal migrants who are liable for deportation from the UK, or who have absconded from immigration control. Those with outstanding applications or appeals will not be affected – including asylum seekers – nor will those who have been granted leave to be in the UK, including refugees, the department added.

But campaigners criticised the measures. Chai Patel, legal policy director of the Joint Council for the Welfare of Immigrants, claimed the Home Office frequently makes mistakes determining immigration status.

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“What is shocking about this system is that people’s bank accounts, which they rely on for their jobs, their homes and every aspect of life, can be closed with no clear means of redress or compensation in case of errors,” he said, adding: “this places people affected at even greater risk of exploitation and of being driven into a cash-only economy at the mercy of unscrupulous employers and landlords.”