Bank blocked deposit transfer .

[MarcyJay]

Hello,
We've agreed to use a sole trader to complete our bathroom renovations and he is due to start next month. He requested 50% deposit (just over £9.5k) which we thought was hefty but on researching it appears pretty standard practice. Tried to move the money across this morning and the bank has blocked it on the grounds that the trader has not passed the security checks. We can now see as well that they are not registered on companies house. Also to point that the trader had refused credit card payments due to the extra charge.
Now I'm wondering if we should use another company but have signed a contract.
What would you do ? Tia

Why are you expecting a sole trader to be registered at companies house?

I don't expect that; I was just giving all information.

I wouldn't give someone £9.5k deposit, it's far too risky!

It is only Limited Companies that are registered at Companies house. A sole trader could have a Limited Company but it is not a legal requirement. Ask your bank what they mean by saying he has not met their checks. Have you told your bank his bank account name, sort code and account number and whether his account is a business account or a private account?.
If you have told your bank it is a business account and it is actually a private account then this would show as ‘not meeting their checks’. You need to go back to the trader and confirm the information.

I wouldn’t say paying £9.5k upfront is normal , but presumably you have done as much due diligence as you can . Eg got 3 quotes first , saw examples of their work , have checked reviews etc , checked their insurance. I think the banks are only going to get stricter with releasing payments now they have to reimburse APP frauds/scams more . I would check with your bank exactly what checks he has failed , eg is the account not a name match , or are you paying into a personal account rather than business.

Could you not offer to pay for all materials direct with the companies you are ordering from , and have them delivered to yourself . That way the builder isn’t out of pocket , but if he does a runner you still have the goods to get someone else in .

I would simply not give that amount of money to someone without any security. There is nothing to stop him waltzing off with the money. I would tell him that the bank refuses to allow the transfer because he does not pass their secrity checks and so the contract is frustrated.

Have you told the trader he failed the bank's security checks..?

I have not yet told him that he failed the bank security checks.

It's quite frustrating and now I am full of doubts. We got three different quotes, looked through all the social media pages and their work and picked him.

You need to talk to his past customers and see the work in person surely if you are paying so much money? I could knock up a website I am afternoon with all kinds of pictures. Ask for recommendations from past clients and follow them up.

I'd be erring on the side of caution; there are two red flags here, IMO - the request for a substantial upfront payment of thousands to be made by bank transfer, and the bank's feedback.

I've paid a few small traders by bank transfer (most of them don't take credit cards because of the cost) but only after the job has been completed.

Ooof.

I wasn't allowed to transfer money to my husband a few weeks ago, I went to bank transfer it and it came up as high risk - because the only account details I could find was a random Monzo account he'd set up to do matched betting with. They were adamant that it was high risk and they wouldn't allow the transfer. I don't think he's done KYC on that account either, he hasn't used it in ages.

Tell the sole trader what's happened. Their take on it could be illuminating.

We had building work done a few years ago. When we were looking at builders, some said they needed a deposit before works. The one we eventually used didn’t. I asked him why. He said he had trade accounts with all his suppliers, so if he ordered materials to use he would have 30 days to pay by which time we would have paid him an instalment for works done.
£9.5k is a lot of money up front. I wouldn’t expect to pay more than 10%, and that’s to show good will on your side so you don’t pull out the day before he starts.

Feels like too much money to hand over. I wouldn't.

I would be wary of a 50% deposit.

If he's a one man band, what is the deposit for?

A bathroom shouldn't take long, so if he's ordering materials on account you will have paid him on completion before the bill is due.

If he doesn't have 30 day payment arrangements with suppliers that's a red flag to me.

If that's the case you should be ordering the materials for him, at least then they are yours.

The bank will have had a lot of experience of this sort of thing I'd take heed

When I had my bathroom done the trader had an account at the bathroom supplier and I was able to pay them for the materials in advance.

They then got paid for labour etc at the end.

Assuming that the bulk of the deposit is needed for materials, you could suggest paying the suppliers directly and having materials delivered straight to you. This mitigates losing money and/or stuff you think you have paid for.

I've just had a whole extension done and didn't pay anyone anything in advance. I did pay for quite a bit of the materials etc direct to the suppliers so no one was out of pocket on my behalf.

I'd be very uncomfortable to do that.

I’ve noticed recently that tradesmen prefer me to order and pay for all the big items ( cabinets, electrical, sinks, tiles etc) and they bill us for the work and additional materials. They say that it saves them a lot of admin and trouble dealing with suppliers for very very little profit ( A lot of retail sites now match trade sites or you can just use the trade sites yourself).

£9. 5k is a lot of money to hand over to someone you don’t know.

That must be some bathroom at £19k.
I've had 3 bathrooms done in the last few years. The 1st two were done by a builder who was also doing a bit of additional work for me at the same time. I paid nothing until the work was complete. Total was around £18k.
The 3rd bathroom was done by a local plumber who was a sole trader. I bought all the fittings direct from the plumbers merchants and had them delivered here. I then didn't pay the plumber until the work was complete. Total around £6k a couple of years ago.

I would definitely be suspicious of your trader and looking elsewhere.

It's actually a family bathroom, an en-suite and a cloakroom. I feel so rattled now and tempted to cancel the whole thing but not sure if that's going to cost me.