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  • FIRST POST
    • 2tosign
    • By 2tosign 13th Feb 18, 12:18 AM
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    2tosign
    How can an account be protected
    • #1
    • 13th Feb 18, 12:18 AM
    How can an account be protected 13th Feb 18 at 12:18 AM
    I need to protect the funds of someone with a head injury from themselves as they are vulnerable and easily confused but not so bad they shouldn't have any say over their money.

    I set up 2 accounts with 2 to sign /all to sign. One was a saver account with most funds, one was a current account. Both were accessed by the relative on their own. My relative was taken to the bank by a builder and tens of thousands withdrawn. Bank said it was set up incorrectly. They then said they had set it up correctly. Relative then accepted a bank card the bank handed out and went on huge spending spree and the funds from the saver account were transferred to this account for spending. Spent tens of thousands. Now account is overdrawn, an 8200 loan is due to this bank and no funds are left. Relative has limited income and is unable to pay loan. Loan is unable to be refinanced due to lack of income.

    As one of the signatories on the account I and another relative are now held responsible for the overdraft (but not the loan).

    I rang the bank today to find a way of protecting the accounts for the future. They advised a multiple signature mandate. I said I had used one and it hadn't worked. They passed me on to another department for advice. I was given the same advice. Again I explained it hadn't worked. I am now waiting for the area manager to contact.

    Financial ombudsman said the bank can't stop a bank card being issued on a 2 to sign/all to sign account - but they didn't even let everyone know let alone ask them if it was OK. Is this right?
    Last edited by 2tosign; 13-02-2018 at 4:20 PM.
Page 1
    • xylophone
    • By xylophone 13th Feb 18, 1:01 AM
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    xylophone
    • #2
    • 13th Feb 18, 1:01 AM
    • #2
    • 13th Feb 18, 1:01 AM
    Where an account was set up on a two (or more ) required to sign basis, I am surprised that a bank card can have been issued.

    On a family trust current account I know of, two signatures (solicitor and family member) are required and no ATM card has been issued.

    A similar case existed with a church charity account on which I used to be a signatory.

    Are you sure that you explained to the bank that you were dealing with a vulnerable adult?

    If you knew that you were dealing with a vulnerable adult, why did you not set up Trust Accounts which only you and another Trustee controlled?

    You could then have released money to the vulnerable person's bank account (or better to a savings account with ATM card) for his personal use.

    It would have been better to open building society accounts with no internet access and passbooks which required two signatures for withdrawals - you could have kept the passbook.

    If you can prove that the builder exploited a vulnerable person it may be worth reporting the matter to the police?
    • 2tosign
    • By 2tosign 13th Feb 18, 12:37 PM
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    2tosign
    • #3
    • 13th Feb 18, 12:37 PM
    • #3
    • 13th Feb 18, 12:37 PM
    We were told that no internet banking or cards would be allowed. The bank allowed cash withdrawals at the desk without 2 trustees, handed out a card (that was meant to be a special trust card that required 2 authorizations - but it wasn't) and allowed internet banking by a sole user.

    We have tried to notify the bank that they are dealing with a vulnerable adult. They (RBS) say they don't record such information.

    We are pursuing the builder through a solicitor - the police were not interested. We have a contract for them to finish the work. It is an extremely expensive process that the trust now has no money to pursue. There is no guarantee that he will not just disappear into the ether when pressed for money.

    The money belonged to the vulnerable adult and the solicitor said he hasn't lost capacity so the aim wasn't to cut him out of the process and decision making but to prevent him acting on wild impulse. We didn't think we (as trustees) would end up with a debt due to this.
    • 2tosign
    • By 2tosign 13th Feb 18, 12:46 PM
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    2tosign
    • #4
    • 13th Feb 18, 12:46 PM
    • #4
    • 13th Feb 18, 12:46 PM
    Also, there is only one bank in town and no building societies so due to 2 people having to go into the bank to sort most transactions we wanted somewhere within short travelling distance. Vulnerable adult and me are the only trustees around on a regular basis. My teenage child has turned 18 now so we have had a quote to remove VA from the trust and add the teenager - estimated cost of £450. We didn't have this option when the problem arose and I would have been wary of adding a teenager.
    • 2tosign
    • By 2tosign 13th Feb 18, 12:57 PM
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    2tosign
    • #5
    • 13th Feb 18, 12:57 PM
    • #5
    • 13th Feb 18, 12:57 PM
    One last bit of info - the bank card was not handed out because VA asked for one. It was forced onto VA by the bank tellers because the bank tellers said they couldn't deal with any inquiries about the accounts without one (after around the 4th visit to the bank to see what they had done to address the problem of no access to the accounts). They announced they had solved the problem of having no access on a 2 to sign account by them applying for this card.
    Last edited by 2tosign; 13-02-2018 at 1:40 PM.
    • xylophone
    • By xylophone 13th Feb 18, 2:45 PM
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    xylophone
    • #6
    • 13th Feb 18, 2:45 PM
    • #6
    • 13th Feb 18, 2:45 PM
    We were told that no internet banking or cards would be allowed. The bank allowed cash withdrawals at the desk without 2 trustees, handed out a card (that was meant to be a special trust card that required 2 authorizations - but it wasn't) and allowed internet banking by a sole user.
    You could consider making a formal complaint to the bank - ultimately you can take your case to the FOS.
    • 2tosign
    • By 2tosign 13th Feb 18, 3:59 PM
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    2tosign
    • #7
    • 13th Feb 18, 3:59 PM
    • #7
    • 13th Feb 18, 3:59 PM
    I complained. They acknowledged that the account had been accessed by an individual on a 2 to sign account. They apologized and said take it to the FOS. FOS said they can't stop customers having bank cards for their own accounts even with 2 to sign.
    • PeacefulWaters
    • By PeacefulWaters 13th Feb 18, 4:26 PM
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    PeacefulWaters
    • #8
    • 13th Feb 18, 4:26 PM
    • #8
    • 13th Feb 18, 4:26 PM
    Challenge the FOS decision.
    • 2tosign
    • By 2tosign 13th Feb 18, 4:31 PM
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    2tosign
    • #9
    • 13th Feb 18, 4:31 PM
    • #9
    • 13th Feb 18, 4:31 PM
    I will do. Are they wrong?
    • xylophone
    • By xylophone 13th Feb 18, 5:11 PM
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    xylophone
    I complained. They acknowledged that the account had been accessed by an individual on a 2 to sign account. They apologized and said take it to the FOS. FOS said they can't stop customers having bank cards for their own accounts even with 2 to sign.
    You were told that no card would be issued.
    • 2tosign
    • By 2tosign 13th Feb 18, 5:28 PM
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    2tosign
    There is no proof of what was said, only that the 2 to sign mandate still holds on all accounts (they have shown me their records which are not correct but do have 2 to sign or all to sign on all accounts (they should be the same) and I have a paper copy of one mandate change from 2014 still not fully implemented on their system by 2018). Are the 2 mutually incompatible? Does acceptance of a bank card (issued with false information but again not provable) override the 2 to sign mandate? Online banking was set up in the same way and used to take money without controls. Is that indefensible or OK once a card has been accepted? They allowed online access to the saver account too. Again, is this indefensible or OK once the principle of online banking has been accepted? Is it OK for them to say they don't record vulnerable adult status.
    • xylophone
    • By xylophone 13th Feb 18, 7:39 PM
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    xylophone
    The situation is difficult - the trouble is that in general, a joint account is set up on an either to sign basis with the account holders as "joint tenants with rights of survivorship".

    When an account is specifically set up as a trust account or a "business" account, the situation is different.

    I don't think that the correct type of account was opened - the bank need to set up an account "Trustees of XYZ" with a chequebook, two of three or all signatures required and no internet access or card access allowed.

    If you explained your requirements to the bank and the bank failed to "know their customers" and set up the correct type of account then they could be held to have been negligent.

    I think you may need to return to the ombudsman and try again.
    • TheBanker
    • By TheBanker 14th Feb 18, 5:55 AM
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    TheBanker
    I've seen and dealt with similar cases before when I worked for a different bank.

    What reason did FOS give for rejecting the complaint? In my experience (working for the bank and interacting with FOS), they do tend to have a good understanding of this kind of situation. Did FOS actually consider the complaint and send a written decision, or did they discuss it as a general enquiry by phone?

    Whose name is the account actually in? The fact you are being held liable for the debt suggests it is actually a joint account - if it was in the VA's name with you as an additional signatory, you could not be held liable for the debt unless you had signed some kind of guarantee.

    You talk about being a "trustee" - is there a formal trust deed? If so the account should be in the trust's name.
    Make £10 a day challenge: Jan-18: £330 / £400
    • 2tosign
    • By 2tosign 14th Feb 18, 5:40 PM
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    2tosign
    There is a formal trust deed. There is either a 2 to sign or all to sign mandate on each account. The accounts are in the name of the trust and they are also joint accounts for VA and myself (as the original trustees) and 3rd trustee added (sort of - he is mentioned on the account details but not added properly as a signatory) as an additional signatory.

    The response from FOS came in an email after a phone call. They said that they can't stop someone using a valid bank card and that an account doesn't exist that does what I want it to do (he should know what I want it to do after our long phone call but he doesn't seem to). It doesn't say in the letter but on the phone he said that a bank can't stop someone getting a bank card from their own account. It also says I should have put all the money in my name and I have a duty as trustee to make sure the trust money is only spent on the purposes it was set up for. I am not sure how I was meant to do this on my own - maybe he expected me to get a bank card and withdraw all the money without the other trustees agreement and then dish it out as I saw fit.
    • xylophone
    • By xylophone 14th Feb 18, 6:29 PM
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    xylophone
    I think that you are going to have to make a formal complaint in writing to the bank, get their final response and then make a formal complaint in writing to the FOS if required.

    If the accounts are in the name of the Trust then they are not joint accounts- they are Trust accounts with the Trustees as signatories.

    This being the case, bank cards should not have been issued and no internet access should have been allowed as no one Trustee had the power to act on the account without the authority of at least one other Trustee.
    • 2tosign
    • By 2tosign 14th Feb 18, 6:49 PM
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    2tosign
    We did formally complain to the bank (they apologised) and the official response from FOS was that I should have put all the money in my name and should remove the VA from the trust (but its his trust and that is not what the solicitor wanted). FOS seem to think they know better about how this should have been set up (without ever talking to VA) than the solicitor involved.

    The names might be an issue. The bank named the account after the trust but I think they filled in our names as joint owners. Is that a problem? We have tried to address the name issue a few times and I don't know if it is addressed now or not.
    Last edited by 2tosign; 14-02-2018 at 7:15 PM.
    • xylophone
    • By xylophone 14th Feb 18, 8:45 PM
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    xylophone
    The name of the account is "The xxxxx Trust".

    A Trust has Trustees.

    The Trustees are joint legal owners of the assets within the Trust and so are named on the account because they legally own and manage it.

    It is their duty to manage the assets for the beneficial owner of the assets.

    The Trustees have joint responsibility for the management of the assets and must have the agreement of at least two Trustees before funds can be disbursed.

    It appears that this was explained to the bank when the account was opened and the appropriate mandate(s) were set up.

    Therefore only a chequebook should have been issued.

    The chequebook for our family trust simply has

    [B"]Trustees of the.......Will Trust"[/B] on the chequebook - it is clear therefore that at least two signatures are required.

    It seems to me ( although I'm no expert in law) that you do have the right to complain that a card was issued since the mandates were clear that at least two signatures were required for disbursements.

    The very fact that the account was in the name of the Trustees of a Trust should have alerted the Bank Clerk to the fact that to issue a card could be inappropriate and that he should check the situation before doing so?
    • 2tosign
    • By 2tosign 14th Feb 18, 8:56 PM
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    2tosign
    Thank you. It will help in my response to FOS and dealing with the bank. FOS seem to be arguing that accepting the bank card overwrote the mandate - although they don't spell that out clearly in the letter. They just say that a valid bank card was used correctly and then lecture me on how I should have kept the money.

    Our cheques don't have the trust name on, only name of 2 of the trustees (as they haven't ever dealt with the 3rd trustee properly despite informing them in 2014. The trust name is something held in the record of the bank. Does this matter?
    • xylophone
    • By xylophone 14th Feb 18, 9:18 PM
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    xylophone
    Our cheques don't have the trust name on, only name of 2 of the trustees (as they haven't ever dealt with the 3rd trustee properly despite informing them in 2014. The trust name is something held in the record of the bank. Does this matter?
    Before issuing the card the clerk should have checked the mandate?



    https://bankomb.org.nz/news-and-publications/quick-guides/item/account-mandates

    It seems to me that issuing the card went against the mandate.

    How can one signatory "override" a mandate without the consent of the other signatories?
    • TheBanker
    • By TheBanker 14th Feb 18, 9:33 PM
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    TheBanker
    The response from FOS came in an email after a phone call. They said that they can't stop someone using a valid bank card and that an account doesn't exist that does what I want it to do (he should know what I want it to do after our long phone call but he doesn't seem to).
    Originally posted by 2tosign
    The FOS are wrong. The bank I used to work for would not allow a card to be issued on a 2 to sign account. So such accounts do exist. However...

    ...it depends on the trust deed. I do remember a case where the beneficiary of the trust was able to appoint and remove trustees at his discretion. So when he was told he couldn't withdraw money because the other trustee hadn't signed, he removed her from the trust completely.

    I think there is a decision to be made. If the VA lacks the capacity to make decisions, then the trust needs to restrict his access to funds. If he has the capacity to make decisions, then he will always be able to make the decision to spend his money or borrow more money, one way or another.
    Make £10 a day challenge: Jan-18: £330 / £400
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