Do all banks credit check before offering employment?

[mumtomoley]

Can anyone help with this? Or point me in the direction of somewhere to find out? DP has worked in the city for 30 years (sadly not in a very well paid part of it!)

He has been contracting at a bank since April 2011. When he applied for that job he passed the credit check but the credit card default has happened since then. When they checked him for his most recent job they said that any defaults would mean he would fail the check and would not be offered a job so I know that he would now fail any new checks.

He has found out today that his contract is ending (news I have been dreading :() Before we decide what to do from here, I am trying to find out if there is any point in him applying for other Banking jobs or if they all credit check.

I have tried googling in various ways and I can't find a clear answer.

Does anyone have any experience of this? Either as a job hunter or a recruiter? I know that many banks do check but not sure if it's a requirement and there is therefore no point in even applying for other jobs.

I would be very grateful for any advice.

I have worked at a couple of high street banks (and kept an eye on positions within other banks in case anything better came along :) ) and all of them that I've seen will do a credit check. However, at least at the bank I worked at longest, there could be exceptions made depending on the role and also the reason for the financial difficulties. Were yours caused by anything specific? Also, are they in DP's name or is he simply a cardholder and you are the main holder?

I phoned and agency this morning and they said that most do. Unfortunately it's a recent default and for a large amount (10k) and still outstanding. DP is in debt management. It's caused by a period of unemployment in 2010-2011 when it all fell apart.

This is such a mess :( He's only ever worked in the City I can't see how he can get another job at all

Also the default is entirely in his name

Is the new job with the same bank? We used to be credit checked every 12 months, so it's possible they are happy to still employ him, I think personally I would speak to his employer and discuss it. Also, if he gets a copy of his credit report it should show any time a check was done, he will be able to see if it was done annually or not.

No it's not, he's a contractor for one of the big banks, and the contract is coming to an end. The default has occured since he started there so he passed their credit check ok.

But now he needs to find a new job, and can't see him getting in the door anywhere.

As permanent staff we had to have a credit check each year.

I think if he is upfront and honest about the reasons for it, and can show he has a repayment plan in place, it's still worth his while applying for jobs. It's not like he ran up loads of debts then buried his head in the sand about it and with the current economic climate, many people have got into unfortunate situations.

Defaults will always mean a very difficult conversation will be had with him before his employment is finalised. BUT, depending on the role, it is not a complete dealbreaker (unlike CCJs, which you can't really get around).

There are some areas of banks (eg Compliance) where this is more of an issue than other areas (eg IT), so it really depends on the specific work he gets offered.

Out of interest, has he thought about looking for work in overseas branches of non EU/US banks?

ok, it gets worse then as he's in a role that enforces FSA regulations so sounds like its going to be a real problem.

Overseas would be good but he has two sons here who live with their mother so I don't think we could leave the country, tempting as it is.

I meant London Branches of non-EU banks. Depending on their clients (if the bank branch operates only with professional authorised persons), some requirements are less onerous, because of FSA exemption. BUT, if he's an FSA expert, then those very branches wouldn't need his services. Bugger.

I still think it shouldn't necessarily be a deal breaker - especially as he is on a DMP and addressing it properly, but he will need to document a full history of what happened and why, and be prepared to discuss it at offer stage.

Thanks Still Squiffy :) So you think that non EU banks might be less rigorous in their checks?

He used to work in a more operational role before what he does now so there's a possibility he can look into something along those lines. (I am not hugely clear on the details.. what he does now is his department manages and enforces a process that is required by the FSA as opposed to being responsible for FSA compliance as a whole.)

What about other financial institutions? I work for a brokers and I don't think we do a credit check for new employees. Do you think any other type of financial institutions would be exempt?

Really appreciate your help. Do you work in the industry squiffy?

It's not so much about rigour in their checks as it is about having jurisdiction from an overseas body rather than the FSA - some regulators do not have the same specific 'fit & proper' requirements (but they can, for example, require different paper quals). You can easily check if a firm is FSA registered as the list is available on internet (and firms have to put it on their websites and all documentation). I thought that brokers were all FSA-regulated, so staff should be credit-checked too (but I could be wrong there)

If I were to hazard a guess I would imagine your DH works on doing stuff that feeds into reports required by the FSA (eg trade reporting, client classification, KYC validation, capital adequacy reporting), something like that? If so then I think you should try to relax. If he is not directly advising people or directly interacting with clients then I don't think its going to matter too much.

What I would do, if I were him, is to speak frankly to a placement agency or headhunter in his specific line of field to ask them if they have come across any similar issues.

Perhaps it's changed since I started at a brokers (6yrs ago) or I just don't remember!

I am just looking for a list of firms that are FSA registered - and it seems to include all banks whether inside the EU or not? At least all the non EU banks I can think of are on there (Japanese, Chinese etc) I am looking here www.fsa.gov.uk/register/home.do Do you know if I am looking at the wrong thing or misunderstanding?

You are right in your guess as to what DP does. I think the size of the default and that it is recent mean chances of him getting through are slim to nil. He's seeing a friend next week for advice (he failed a credit check with an American bank for having a CCJ (failed business behind him) but then got a job at an American brokers) Maybe he will know something useful.

This is what the FSA say in regards to Financial Soundness (Fit and proper person test)

In determining a person's financial soundness, the FSA will have regard to any factors
including, but not limited to:
2.3.1
(1) whether the person has been the subject of any judgment debt or award, in the
United Kingdom or elsewhere, that remains outstanding or was not satisfied
within a reasonable period;
(2) whether, in the United Kingdom or elsewhere, the person has made any
arrangements with his creditors, filed for bankruptcy, had a bankruptcy petition
served on him, been adjudged bankrupt, been the subject of a bankruptcy
restrictions order (including an interim bankruptcy restrictions order), offered
a bankruptcy restrictions undertaking, had assets sequestrated, or been involved
in proceedings relating to any of these.
The FSA will not normally require the candidate to supply a statement of assets or
liabilities. The fact that a person may be of limited financial means will not, in itself, affect
his suitability to perform a controlled function.
2.3.2

So I think 1) and 2) are perhaps the problems? 1) sounds like it's talking about CCJ's but does this cover defaulting too?

Also where it says in 2 'the person has made arrangements with his creditors'. Does this mean that rather than being a good thing, being in a DMP would actually mean he falls short?

I'm sorry these are very specific questions but would be grateful for another opinion that is better informed than mine!

DP is also going to see a recruitment consultant on Tuesday to discuss.

Is he actually an FSA approved person as opposed to just working in FSA related matters?

He's Just working in FSA related matters. ie. back office at a bank, rather than being say being an IFA but apparently this forms part of the pre-employment checks at all banks now.

Banks will require a credit check yes but the FIT rules only apply to approved persons not everyone who works for a bank. It is up to the bank what they want to do if defaults show but if he has no access to client funds, no access to the bank's money and the problems are under control he may be ok. He should be upfront about it before the credit test takes place

oh ok, thank you :)

So do you think if they can be explained and we can show that we are dealing with it (i.e. the debt management plan) that some banks (only needs to be one of them!) could conceivably say it was ok?

He has no access to money in his job etc.

He's going to see a recruitment consultant tomorrow to see what they say as well - though the worry is that they won't be interested in helping him as he'll be too difficult to place.

Thanks for your help :)

Possibly. The only time I've come across this sort of situation was someone who we had offered a secretarial job to a couple of years ago. Some defaults came up but they refused to discuss what they were and instead withdrew themselves. I imagine we could have taken a few if we were satisfied they were being dealt with.

The other concern of banks can be if he had access to sensitive information which could have a value attached which could be attractive if he had debts.

I'm the OP on this thread but have namechanged since starting it.. Resurrecting a zombie here but thought I'd update on what happened in the end incase anyone else comes across it looking for the same info that I was.

Although DP's contract came to an end, they offered him a permanent position at the same bank. He did fail the credit check, so they went through a secondary process whereby they got management approval to say they were happy to employ him despite failing the check.

So basically, it's not necessarily the be all and end all. Although it obviously helped that he had been there for 2 years so they knew what they were getting with him.

Glad he got it sorted :)