Behaviour of Banks

[SamsarandaParticipant @samsaranda]

[SamsarandaParticipant @samsaranda]

Is there anyone out there who is a committee member/treasurer of a club or group who is still encountering problems with their organisation’s Bank, in the past there have been many postings about how stupid the Banks have been in interpreting the regulations concerning identification and regulation of their customers in respect of the prevention of money laundering.

I am the treasurer of a group that my wife runs, there are about thirty in the group and they are all retired ladies that meet fortnightly in our Village Hall to practise crafts including knitting and cross stitch, it is quite a social club because many of the ladies now live on their own and are very lonely, suffice to say there is always plenty of tea and cakes as well. Two years ago their treasurer was diagnosed with cancer and she decided to give up the treasurers position and as no one else volunteered I agreed to take over, it isn’t very onerous, it means banking their subscriptions every fortnight and paying the Village Hall rent every three months.

Last year we received a form from the Bank requiring that all the signatories to the bank account should prove their identities, bearing in mind that these people, myself included, had when being appointed, attended at the Bank and produced Passports/ Driving Licences etc to provide photographic ID. This form supplied to us required us all to go through another ID process and we are required to supply numerous bits of paperwork about the club, many of these documents do not exist as the club isn’t a trading entity with solicitors and accountants who can supply evidence relating to the trading status of the club in question.

This is a group of old age pensioners who meet fortnightly for a few hours in their local Village Hall and the income of their group activities amounts to just over a thousand pounds a year, hardly an organisation that is going to be money laundering for the regime in North Korea, however the banks have received a directive that all accounts must be verified to a certain standard and there appears to be no intelligence applied to how this directive should be applied in the case of small accounts that are obviously well outside the scope of those that are likely or able to be part of this money laundering enterprise.

Currently in respect of the account that I am looking after we have been issued a notice that unless we supply the Bank with paperwork that in our case doesn’t exist then our account will be closed down in 60 days. I have complied with their form, on more than one occasion, and sent all the documents that we can supply but this isn’t good enough to meet their requirements. One requirement that we are required to meet is that we have to prove that the club exists as an entity, the fact that it was formed 22 years ago and has banked with the same bank for all that time doesn’t meet the criteria to prove existence. The Bank has relented on that issue and has deemed acceptable an invoice from our landlord, the Village Hall, including the full name of the group and it’s registered address, the irony in that is that the Village Hall is having the exact same problems with its bankers and they refuse to accept that it exists as an entity considering they have been its bankers for the last 50 years since it was built.

The form that I received from the Bank was a very shabbily constructed document it wasn’t very professional in its layout, in fact I think a seven year old could have made a better job of it. Another issue that I find unprofessional in their dealings with us is that two years ago we added my name to the account and deleted the previous treasurers, they continue to address the statements to the previous treasurer despite being told a number of times that they are sending to the wrong person. One thing that really winds me up is that there is a banking crackdown that affects many small clubs and groups such as old age pensioners yet the biggest culprits of wrongdoing in the money system are the Banks themselves they have been caught many times indulging in practices that are morally and legally wrong, it appears that this exercise they are going through in respect of money laundering is to deflect attention away from themselves.

Well if the Bank does close down our club account then it looks like it will have to be a tin box under the bed, not exactly ethical but practical. Dave W

[Frances IoMParticipant @francesiom58905]

sounds like Nat West – their IoM subsidiary took over 2 years + a form 35 pages long to change 2 signatories so that our management company (5 flats – all owners are directors) could gain access to our bank account of some 30years standing following the death + move to a retirement home of two of our directors.

[blowlampParticipant @blowlamp]

Take the money out of the bank.

Martin.

[SamsarandaParticipant @samsaranda]

The Bank in question is Barclays, their level of service leaves me dismayed. In the local Bank they now only have one cashier desk staffed by a real person and this is a large town centre bank, when I took over as treasurer of my wife’s group I gathered together the takings, which is all in cash, and proceeded to the bank to pay into the account, because there is now only the one cashier desk that you can pay in the cash if it includes coin, I queued to wait my turn and it took 40 minutes to get served. I felt that my limited time left on this earth would be better served by not standing in a queue for 40 minutes if there was another alternative, consequently now when my wife returns from club meetings I take the monies collected and now make a transfer from my own current account into the clubs account at Barclays and the cash from the club goes into my pocket, not very ethical but way more practical than the alternative. We are currently bombarded with the premise that Banking is a Service Industry, however does that mean that the Banks serve the Public or is that the Public serve the Banks, not sure on that one ! Dave W

[SamsarandaParticipant @samsaranda]

Martin

The alternative if the bank close down the account is to open a separate account with my own Bank in my own name, have been with them for 58 years and no problems whatsoever, and operate it just for the club that my wife runs. I realise that is probably not ethical but it’s the banks stupidity in the way they interpret their regulations that are the driving factor. Dave W

[ChrisLHParticipant @chrislh]

I was in a similar position as treasurer of a gardeing club banking at Barclays. I tried to comply with the money laundering requirements 4 or 5 years ago but had to give up in the end as whatever I did we could not meet their demands. Relief came in the form of advice from a nameless employee to just leave it and put up with being investigated if the bank found it necessary. We have nothing to hide so that's OK. Meanwhile Barclays have closed their local branch so half a day's effort to use their nearest branch. I use the Post Office (another bunch of crooks who put a lot of employees in prison for crimes they did not commit) for transactions now so why do we bank at Barclays ? I'd change it if I could be bothered.

[SillyOldDufferModerator @sillyoldduffer]

Yeah, it's a problem! I see it as a consequence of past mismanagement, due to UK governments and voters choosing to ignore where bank profits were coming from. For 50 years the financial system was wide open to abuse, not only in overseas dependencies like the Cayman and British Virgin Islands, but much closer to home in the Isle of Man, Channel Islands and the City of London. Not a uniquely British problem because many other countries did similar.

Party on until it became painfully obvious that society was being undermined by a banking system that enabled large-scale corruption, tax-evasion, money laundering (drugs, people trafficking etc), sanctions busting, arms dealing, fraud, terrorism, and anything else dodgy involving money.  Got too spicy and now countermeasures being applied.

Unfortunately it's been extremely easy to open a bank account for a long time – for 50 years hardly any checks were made. As a result large numbers of existing accounts are bent, many masquerading as small businesses, charities, and clubs etc. The only way to find out who the malefactors are is to require account holders to identify themselves to a higher standard. Banks can't tell the difference between Samsaranda's Group and a small money laundering operation.

Banks have been reluctant to tackle the problem. Partly because putting legitimate customers through the mill upsets them, but a cynic might suggest banks prefer not to know where their profits come from. For whatever reason, progress has been slow and government and Regulators are leaning harder on financial institutions – sort this mess out or else. Again in cynic mode, it's possible Samsaranda's Bank has been set a target to prove 'n' accounts this year, and it suits them to pick on lots of small accounts that are unlikely to be wrong than profitable big money accounts that could be bent.

Who is guilty? We are. In the past, folk voted for tax-cuts or improved services rather than ask awkward questions about how they would be paid for. Or they knew what was going on and decided it was worth it. To my shame that group includes me.

Dave

 

Edited By SillyOldDuffer on 03/06/2023 11:45:54

[duncan webster 1Participant @duncanwebster1]

You could look into setting up a Registered Society. This then has legal standing. The downside is that you then have to file annual accounts with the FCA. The form is stupid, asks the same questions every year. When you could do it on paper I used to write 'same as last year' diagonally across the page, but you can't do that electronically. To add insult to injury you then have to pay to send it in.

If there are similar groups in your village, you could band together as the Much Binding Community, and then have subsections.

As a final grouse, when it was done on paper you had to send it to that nice cheap office accommodation in Canary Wharf. Surely it could all be dealt with in Scunthorpe. No disrespect, but I bet office space is a bit cheaper. 

Edited By duncan webster on 03/06/2023 12:09:59

[blowlampParticipant @blowlamp]

Cash is king, so that's what you should use. Forget the bank.

Martin.

[noel shelleyParticipant @noelshelley55608]

Having had a similar rigmarole with the parish counci, a charitable historical projectl and a gardening club, there are a few "banks" that may be able to help, CAF bank and others. The only problem may be that of opening a new account. That our interpretation of honesty and practicallity do not extend to the banks and their well remunerated staff. Here in N Norfolk ALL the local banks have closed and the only building society has reduced its hours, it CLAIMS to be there to serve it's members – as yet I haven't seen any evidence of that ! Noel.

[Frances IoMParticipant @francesiom58905]

S.O.D. given that every credit/debit card transaction is scanned for reasonableness then a small effectively non-profit group with small regular sums coming in and out should be easy to police – yet they cannot even police 100s of thousand pounds cash purchases passing thru a small jewellers.

[Clive HartlandParticipant @clivehartland94829]

Why not open an account in a Building society, You can take money out up to £500 a day. No cheques or cards involved apart from paying in, go visit and discuss with the manager. You are suplied with a paying in book which as far as I can see is enough proof of deposit and withdrawal. Clive PS. plus some interest too.

[noel shelleyParticipant @noelshelley55608]

A good idea clive BUT don't be supprised at the hoops, ID Etc, when a friend of mine tried they had problems, so I said give them 3rd party access, even that needed all the hoops Etc. Friends at Barclays helped out in the end ! And all for about £1200. Noel.

[Brian WoodParticipant @brianwood45127]

I'm sure Which magazine would love to get their teeth into this. Sansaranda put together a well worded and succinct case, so why not give them a go at cutting through the smokescreen? Talking about it here airs some grievances but does nothing in furthering a change in bank operation. 

Brian

Edited By Brian Wood on 03/06/2023 17:42:50

[densleighParticipant @densleigh]

As a Parish Council we have just amalgamated two parish councils and created a new combined account.

 

The High St banks and even two B.Societies did not want to know about any of this.

 

Our Clerk found Unity Trust Bank who were very happy to take us on no issues around anything plus there is the facility for dual authourisation to guard against any wrong doings.

 

Be careful though there is a very similar named bank that comes up first in a google search – that one is based in tthat very wealthy country in Africa, with lots of people wanting you to encash zillions of $ !

Edited By densleigh on 03/06/2023 18:30:24

[DMBParticipant @dmb]

Hi All,

I am a Treasurer of a Miniature railway club and I had an awful bank form to fill in last year.

"The Register of Overseas Entities", launched in August 2022. It was intended to reveal the ultimate owners of 50,000 Foreign owned Properties in the UK. Nearly half failed to declare (in other words, just ignored letter and form from their bank). The foregoing was from BBC News and Transparency International a few weeks ago. Apparently there is now increased pressure on those culprits with threats of fines running into thousands £s.

I offer help based upon the form which I filled in and returned but not had any adverse reaction, so assume that it was satisfactory. This is what Lloyd's sent to me –

"TheForeign Account Tax Compliance Act"(FATCA) and The Common Reporting Standard (CRS) tax regulations require us by law to collect information from customers for whom we are unable to confirm their tax residency or FATCA and CRS entity status.It rambles on and the guidance wasn't very helpful. They say that it will help tax authorities around the world to have a clearer view of where people hold assets outside of their country of tax residency. The law requires the bank to report such certain foreign tax resident customers to tax authorities local to where their financial accounts are held.

All seems to point to this being instigated in the USA and oligarchs come to mind. They are all holed up in Turkey with their yachts.

6 Part form, Entity details and it's Country of Tax Residency, FATCA classification, CRS classification,Controlling persons and Declaration of accuracy.

The following were my answers.

Part 1 Legal Name of Entity put in name of club. Country of Incorporation or Organisation, put in United Kingdom.

Permanent Residence Address, I entered postal address of club premises. Correspondence address was entered as my own.

Part 2 Entity Country of Tax Residency TIN Reason for no TIN, A B C (select on for each CoTR)

Reasons for no TIN, A The Country of Tax Residency does not issue TINs. B is that country doesn't require TIN disclosure.

C is Startup Non Financial Entity awaiting TIN. I selected A because our HMRC issues tax numbers and UK doesn't issue TINs.

Part 3 FATCA classification. 3a Are you Inc or org in USA? "No", move to 3c Is the entity a Foreign Financial Institution? "No" move to 3f Non – Financial Foreign Entity (NFFE) is Non – Profit Organisation (NPO). Move to Part 4 all options. Part 4 CRS Classification. 4A Financial Institution (FI). Is the Entity an FI ? "No", move to 4b.Non – Financial Entity ( NFE) v Non -Profit Organisation (NPO) . Move to part 6 all options – Declaration. Sign, date, print full name and capacity – Club Treasurer.

I did in fact fill in part 5 – Controlling Person 1, enquires surname,  first name, address and TIN or not. I put in details of the usual 3 club controllers – chairman, secretary and treasurer. 

If you carefully read the above, it is obvious that you stick to NPO.

I have reorganised the club's bank account to have a relatively smallish current account balance, sufficient to pay normal club operations and Bill's. A separate savings account for around 80% of total funds which is shown in the club accounts as a contingency fund for various needs, including satisfying the lease requirements to return the site to previous condition in the event of the club vacating the site. The club has under 60 members and makes a small annual excess of Income over Expenditure, so easily passes the test of NPO.

Hope all the above may answer a few questions and maybe assist in filling the form in.

John

Edited By DMB on 03/06/2023 22:50:38

[DMBParticipant @dmb]

Samsaranda, please note that Lloyd's bank and EDF will insist upon calling the club's accounts, " my" business.

I am wondering what happens if I snuff it whilst still Treasurer. Would the 2 bank accounts be classed as part of my assets in the course of my executor having to fill in a Probate Form? I am planning to write a signed and dated letter to be kept with my will and an identical one with the club's papers, just in case….                                   The letter confirming that the funds are held in the name of and on behalf of, the club and in no way amount to personal assets, as no telling what may happen when I'm no longer around to argue.

John

Edited By DMB on 03/06/2023 23:00:54

[SamsarandaParticipant @samsaranda]

A further update on the saga that I started this topic with, I was recently informed by our Village Hall treasurer that the cheque our club had paid its quarterly rent with, had been bounced by the Bank as the clubs account had been closed down. Very nice of the Bank I should have thought that they would have the courtesy to inform us the account holder that they were closing the account, still not received any notification of that.

I telephoned the Business Division of Barclays Bank with whom our account is held, eventually got through after waiting about 20 minutes on the phone and spoke with an employee who was less than helpful. I put to them that it would have been courteous to inform us in writing that they had closed our account, I asked how they were going to pay over to us the two thousand odd pounds of club money that was in the closed account, the reply was that they would issue a cheque for the balance, my question then was who were they going to make the cheque payable to, the reply was to the Club, I said well that’s not a lot of use as the Club no longer has a bank account as you have just closed it down. After a long discussion it was agreed that they could issue a cheque to one of the signatories to the old account if all the present signatories signed that they were in agreement. Sent the required letter over three weeks ago but heard nothing so telephoned a week ago and was told that the process required that they send the money to another part of the Barclays organisation who would then comply with the request, apparently the cheque is in the post this was eight days ago so I won’t be holding my breath.

Our Club is not the only victim of this ludicrous situation with the Banks, I live in a relatively small village in East Sussex and ours is one of four organisations, that I know of, that has had its bank account closed down, most notably our Village Hall that has been with the same bank for 50 years has received the same treatment.

My Sister worked all her working life for Barclays Bank couldn’t get out of the door fast enough when her retirement came due, she complains bitterly about service nowadays at the Bank, it took her two hours recently to organise transfer of a large sum of money to an account in Luxembourg, nothing appears to be easy nowadays as far as Banks are concerned, it would appear that they want to divest themselves of small community accounts because then they will need less staff employed and would correspondingly reduce their overheads, I will repeat my comment from before are the Banks there to provide a service to customers or are customers there to serve the Banks.

[Chris CrewParticipant @chriscrew66644]

When someone contacted a radio phone-in program with a similar issue a few years ago, I recall money-saving-expert Martin Lewis stating that ‘the banks’ are a commercial business whose whole raison d’etre is simply to maximise profit. The ‘service’ they provide to the customer is simply the medium by which this profit is produced. This is exactly the same, in principle, as any of the retailers who we may use to purvey tools and materials or any other commodity for that matter. If a product or service becomes unprofitable or does not produce a satisfactory return on any investment, then it will be withdrawn because businesses are not charities and their directors are required by law to act in the best interests of the shareholder, not the customers. This is a fact of life in all things that are not provided on an altruistic basis, like the presence of your village hall which exists for the benefit of your local community rather than to make a profit, so I would say the customer is there to serve the banks, rather than the other way round. Sad, but true?

[duncan webster 1Participant @duncanwebster1]

It is pretty much impossible to live in today’s society without some kind of bank account. The government could make it a requirement of having a banking licence that a minimum level of service is provided to small clubs etc. The UK govt once owned a bank which dealt with benefits, pensions etc, but of course it was privatised to give the banks more profit. This bank could have provided this service. As it is even a one man business (limited company) has to have a business account which not only pays zero interest, you have to pay them for the privilege. And before you ask, as an independant contractor I had to have a limited company or I wouldn’t have got any work. It then cost me £800/year for an accountant. Tried doing it myself, but the system is designed to confuse, probably by accountants

[SamsarandaParticipant @samsaranda]

Chris I fully understand the obligation on companies including Banks to make profits for their shareholders, my complaint with Barclays was in the way that they treat their customers, surely they have an obligation to inform the account holder that they have closed down their account thus preventing the issue of cheques being refused payment and the problems that causes to the recipient of the refused cheques.

Duncan, the way the Banking system is operated and only loosely regulated is reminiscent of a Casino in the Wild West, those responsible for regulation seem content to stand aside and not intervene until something drastic happens like the crash of twelve years ago, then it’s the publics responsibility to fund a rescue. Meanwhile the Banks are becoming essential players in our changing society and increasingly have more influence on how our lives are conducted.   Dave W

[HollowpointParticipant @hollowpoint]

Close it, use cash. Job done. 😀

[Graham TitmanParticipant @grahamtitman81812]

Good morning Hollowpoint last year our local pub was taken over to become a Balti house sign on the door payment by phone, card, or watch NO CASH !Graham

[Graham Titman]

On Graham Titman Said:

Good morning Hollowpoint last year our local pub was taken over to become a Balti house sign on the door payment by phone, card, or watch NO CASH !Graham

Doesn’t surprise me. I assume they deliver, so saves drivers handling (or ‘mishandling’) cash – plus risk of robbery etc. and also they are guaranteed payment if ordering online.

Back to the main topic, have mentioned this before when this topic aired, after a lifetime with HSBC without problems, then they closed all the local branches – moved to Nationwide BS. Couldn’t be happier – dead easy to change, real people almost on the doorstep & good service. No personal connection except a happy customer.

Mike

 

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