Charging for use of a bank account

To be clear -not an instance of claim fraud as such as client claimed intentionally & without persuasion AFAIK.

She has UC paid into another person’s bank account - that is not uncommon. However, this person charges £25 a time for her to withdraw any UC.

First question: is this unlawful? I’m no financial services expert but this looks like providing a financial service which the person whose account it is surely isn’t regulated to do….

Secondly: we are worried that if the arrangement is stopped & the client helped to open her own bank account, the money in the person’s bank account will simply not be released to her.

It appears that this practice may be widespread - a mini industry for people who would struggle to open a bank account (in this case I think the client could do so, with support - it’s not a payment exception service situation, though others might be).