Bank Insisting I tell them why I am making a Payment to my Daughter

[Gaggley]

I usually do my banking online but thought it would be easier to set up a standing order by calling First Direct today. After going through security, I was asked a number of questions about whether I had been forced to do this, had I been told to download software, was anyone watching me online etc. This is irritating, as it is incredibly unlikely that anyone who was being scammed would say yes, but I answered them none the less.

I was then asked how I had been given the bank details. I said that I had made the transfer before, but still had to give specific details as to how my daughter had given me the bank details, that I had successfully made manual transfers to multiple times over many years. After we'd got past this, I was then told I had to tell them why I was paying money to my daughter. I declined to answer, and was prevented from setting up a standing order. Complaints department confirmed that this was their procedure and they were knowingly preventing me from moving my own money around.

I asked them how much fraud they could quantify had been prevented by these arbitratry measures, they could not answer. But if I had done this myself online, then I would not have to justify my own decisions, could just do it at the drop of a hat. Bloody annoying. But a real problem for people who can't manage to use online services, who are forced to give up their privacy by rules like this.

Does anyone have a bank that will allow you to make transactions over the phone without justifying how they spend their own money, as I would like to switch to them?

It was over 10 years ago now, but I was still very surprised when my
local branch of Barclays didn’t ask why I wanted a hefty sum of $$$ in cash - the max you could then take into the US.

In fact it was to take to a DSis who’d just had a major op and had been widowed v young. I’d wanted to transfer money to pay for help, but she was too bloody stubborn to give me her bank details! But when I went in person and put the cash on the kitchen table she didn’t argue. 😀

You are most welcome. I have encountered it all in my line of work as a lawyer.

They do. All the time.

She wasn't paying for a boob job though, so I'm not sure what your point is? She was joking, clearly!

My mum doesn't do online banking or phone banking and the business doesn't accept cheques any more (who does?) so cash was easiest for her.

I used to work in trading standards. Honestly half the cases were about dodgy tradesmen marching elderly women to the bank to withdraw thousands for a shoddy 2 hour job. So pleased banks ask questions and I’m it sure why your mum just wouldn’t say she’s paying a builder

If you are talking to me, then she did say that she was paying a builder - but the story is funnier without the 'then she clarified what it was really for and after a couple more questions she was allowed to withdraw her cash'.

My elderly mum was taken advantage of by a rogue trader recently. Paid £4k for a job that should have been nearer £1k. I wish she had paid in cash and not by cheque as it might have been picked up at the bank.

I'm not sure what you feel you are correcting. The Consumer Duty Act literally specifies "duty of care" requirements. There isn't an expectation to catch any financial abuse, but certainly there are duties to protect vulnerable customers. You can read all about it here: www.fca.org.uk/publications/policy-statements/ps22-9-new-consumer-duty.

Financial.abuse is a form of domestic abuse under the Domestic Abuse Act 2021. It's referred to as economic abuse and is defined in section 1 (4).
It is also an offence under the Theft Act and known as Fraud by Abuse of Position.
The Care Act 2914 also covers financial abuse.
The maximum sentence for financial abuse is 5 years.

Barclays are crap. They pulled the same stunt on me, claiming I couldn't be my dad's (married) daughter because our names didn't match when I tried to repay him a loan. Then they almost cost me a house purchase by refusing to give me a bankers draft AFTER I had rung them 3 days earlier to confirm the process. I simply asked for the cash (£30k) which they refused to give me as it was "too dangerous" to walk the 25 metres to Lloyds where the solicitors' account was held. I laughed and asked if they were refusing to fulfil a reasonable request which was only put in because they had fucked up earlier, so they grudgingly allowed it. When I got to Lloyds, the cashier rolled her eyes and said "oh another one".

Santander were a nightmare with me, but the local manager went above and beyond to help and resolve things. They have also been great with DD2 when she was scammed due to her card being skimmed.

I've set up standing orders online with FD.

Builder could be under the VAT threshold so no VAT payable.

My bank will make a huge deal about setting up a standing order with regards to my rent

But will freely hand out my money to anyone who asks for it in a different country.

Yet if I inform them I am going out of the country they will cancel my card because someone could potentially be scamming me.

The worse though is the upgraded security they put in to protect their customers which judging by the comments and reviews online I am not the only one who has found that it has become so upgraded that we as customers can no longer access our accounts

I can only be thankful I never cancelled my paper statements.

@Reugny agreed & that is something I expect the bank would be checking one way or another if a customer were withdrawing a large amount of cash to pay a builder. Eg they might ask to see an invoice.

Just been to my bank today to pay some cash into my daughters bank account to be told I can’t because of money laundering. I’m beginning to wonder if it’s worth having a bank account.

@Q2C4 The only bank whose business it is on how a sole trader/company conducts their tax affairs is the bank that that sole trader/company uses. So the customer's bank doesn't have a right to see an invoice, they can only do a basic check to see if the trade/business seems legit.

BTW I pay a lot of trades in cash as they do small jobs however they deliberately have a text message conversation with me about how much it is going to cost as well as dates of work. As they want to have a written record of doing the work. I have had a conversation with a couple of them as they are known from elsewhere on the reasons they do this.

Just found this report.

Thanks @CharlotteBog but it was actually the Halifax. We have all our accounts there and they can see we are mother and daughter and still said no. 🤷🏼‍♀️(She’s under 18)

@Reugny that's not altogether correct. If a bank customer pays a builder cash in hand to enable the builder to offer a lower price due to evading VAT, the evaded VAT is effectively sitting in the bank customer's account. That's the proceeds of a crime which the bank can't handle without risking committing a crime themselves.

The VAT threshold is £85000.

Many trades whether they are builders, plumbers, electricians, plasterers etc will not have a turnover that will reach it so they don't register for VAT. If they however message clients about the job and the cost they have created a record.

I have used firms that have been VAT registered e.g. gardeners, electricians, builder but that is because they do a mixture of large and small jobs.

I know that some builders will have turnover below the VAT threshold. However, there are a portion of dishonest traders who have turnover above this threshold but who don't register for VAT, flying below the radar by accepting payment in cash. I've had decorators offer me two prices - the lower one always in return for receiving cash payment.

It's that risk that banks needs to manage. Banks can't harbour any evaded tax remaining in the customer's account.

I work for a bank. It's an annoying rule but basically - you can only pay cash into an account you're named on. So you must be the account holder, joint holder or some form of registered POA/COP/third party (that has been approved by the bank) etc.

Banks can use discretion if needed. An example - you need to pay cash into your husband's account because he's in hospital and needs to cover his debt payments urgently.

Even if DD is under the age of 18, if it's a Debit card account she will be the only named holder. So that could be why. With savings accounts only one parent can be named nowadays. A bit frustrating for a parent to come into branch and not be able to pay money in due to that technicality.

It's all getting complicated isn't it! 😞

Point me to where they do that.

I’ve had zero clear communication from my bank about how these sorts of measures are supposed to help. They have told me they’re going to ask questions and told me that it will help. But they haven’t told me how. When I’ve asked in a branch the people behind the counter can’t explain, just say that it’s policy and then confuse money laundering requirements with protecting me from scams.

And then lots of people like you and @FutureThroughLensOfThePast claim that it’s all made clear but never manage to provide evidence or conflate other efforts with asking intrusive questions.

@Hangonasecondd it is getting complicated. Particular when the advise was to pay it into my account then they’d transfer it to my DD’s. I appreciate it’s the rules but it just annoying that nowadays it’s as much an issue to have money in the bank has having nothing in there at all.

@NumberTheory rather than asking customer facing bank staff to explain how and why the law is as it is, you could go & read some of the freely available background on the legislative framework which banks are required to follow?

You are likely to get more information that way.