YBS Turning down money?

funscott

I have had an offset mortgage account with YBS for the past 7 years and cannot complain about it (1.25%) . However I became a sole trader in febuary and I have been using the offset account as my sole trader deposit account (keeping it seperate from my day to day personal spending account. everything has been fine up to today where they phoned me up saying they cannot proccess any more forien money transfers ( I do 3 a month max) so they are happy to take money in via cash or money transfer but will not let me sent it via TT/ CHAPS /BACS.

Heres the kicker if i need to transfer money to my bank account to transfer money abroad I now have to do it in cash and they will only let me take out 5k per week and I need to give 2 days notice before I can do this. This also includes taking money from an atm. so if i take 5k out on a monday I cant use the account for a further 7 days.


Are they trying not make money? after all I thought that was their purpose in life.

rant over

premierfella

I suspect that if the savings account had not been linked to your mortgage they might have gone further and given notice of account closure (although I am surprised they have picked up the sole trader use within the space of a month).

The restrictions they have placed on your account appear intentionally designed to prevent you using it as a business account, which they appear unhappy about.

funscott

I have been sending / receiving large sums 5- 10k. yet I just spoke to my other bank where I have a switch card but most basic account and they say no problem sending money as they treat sole traders as a personal accounts so no need to have a business account.

Not doing anything illegal just importing from abroad. registered as a sole trader keep invoice / paperwork.paying my taxes

funscott

have i got a leg to stand on.? I now see all my online facilities have been disabled (i can view my statment only) and tells me my account has been restricted.

I cannot see on their site or within my documentation that the offset account can only be used for personal use as they are saying they are stopping my forien transfers as i am classed as a business now.

my other bank tells me they class sole traders as personal users so dont need a business account so why cant the ybs?. they are happy to take my money from incomming transfers or by cash but restircing my account that i cant do anything with it except take 5k out per week. arrhhhh

premierfella

funscott,

Just to clarify, I was not suggesting that you were doing anything illegal, or even close to such.

I was merely pointing out that the actions of the building society appeared to indicate that they do not want the account used as a business account - whether other banks allow their personal accounts to be used by sole traders is irrelevant. However, it is possible that they are restricting your account for other unspecified reasons.

I do not have a copy of the YBS account terms and conditions, but most accounts can be closed by the bank/building society on them giving notice to you. Given YBS actions thus far, you should at least prepare for that eventuality, particularly if and when you seek to press them to explain their actions.

cottager

If the offset a/c is a savings a/c I think that's probably the reason in a nutshell. Maybe I'm wrong and others know differently, but AFAIK business use isn't allowed on a savings a/c (unless it's an a/c specifically for businesses: these exist of course, but the interest rates aren't usually great, particularly for instant access).

If the 'other bank' you mention is a normal current a/c then this is probably the difference. Maybe the fact that YBS is a building society rather than a bank could also have a bearing.

OH is a sole trader and has a savings a/c for any surplus 'business money', but in his own name and to all intents and purposes it's a personal account -- there's nothing going on with it or through it which could be seen as 'business' or 'unusual'.

With a sole trader, as opposed to a limited company, I think it's rather a daft rule personally. For tax purposes you the person and you the business are treated as the same entity; and if it holds for HMRC you'd think it could for them as well (it's not as if you can't prove you're a sole trader, if they needed proof), but for all the personal savings accounts I've come across the T&Cs don't allow business use of any flavour.

A few years ago I remember we tried opening a savings account and without thinking sent the initial funding cheque from the business a/c. In fact this one wasn't even intended for business funds, but was genuinely going to be for personal savings (we treated the chq in the books as drawings), but it was just easier to write it straight from the business than TF the amount to a personal a/c first and then a cheque from there. They took one look at the business cheque and returned it immediately.

After that we opened a separate personal current a/c in OH's name (at the same bank as his business a/c) and anything for savings goes through that -- 2 steps instead of one, but it's instant with online transfers.

As premierfella says, YBS have evidently looked at your transactions and seen something they don't like; and to be fair I think I might look at foreign transfers on a savings a/c as 'unusual'. It could be they're looking at it as 'business' but in their eyes it could also potentially be money laundering... and if thinking along those lines they would suspend the account and not tell you the reason while it was investigated.

When you spoke to them, you didn't actually say they were business deposits did you, and quote what the 'other bank' said?

You're quite right to want to separate business money/activity from what you do personally, as it's much the best way from a record-keeping standpoint, but IMHO you should have another current a/c for this. Have savings by all means, but not as your one and only business account. Your first port of call should be the other bank who's told you they don't mind personal accounts being used for businesses -- there shouldn't be any problem opening a second a/c with them.

premierfella

Cottager. A very detailed and knowledgable post, and money laundering came to mind to my mind as well (although I didn't specify it specifically this is what I was thinking about as one of the unspecified reasons - again, OP, I would not in any way accuse you of this, but it may be in the mind of YBS).

I think the only real issue the OP has (which I fully understand) is that they want to use this specific YBS savings account because of the offset facility (and thus the effective interest rate on the credit balance). Clearly YBS will prevent this (based on their actions thus far) and ultimately I see no way in which the OP can challenge them on their actions without YBS simply then giving notice to close the offset savings account?

funscott

they have no problem with me bring in bags of cash from my other account to put into the savings account (now that looks dodgey). I have done around 13 transfer to the same person over the last couple of month.

Then cant close my account without taking my mortgage away as I require an offset account to have the mortgage.

I have transfered from my other bank without issue today. even with bring in a fat envalope of cash.

I am in the proccess of opening another current accoutn with my other bank to seperate the cash and i will regulary dump money back into my offset account.

premierfella

funscott wrote: »

I am in the proccess of opening another current accoutn with my other bank to seperate the cash and i will regulary dump money back into my offset account.

Problem solved then I guess.

I would be very surprised if there were not conditions under which YBS were able to close the offset savings account, whatever you require. However, you have those terms and conditions so of course I bow to your far superior knowledge on that point.

On the "bags of cash" deposits, they won't tell you if they suspect money laundering and they have already taken some actions to prevent you laundering money through the account (if that is what you were doing, which it is not) or using the account as a business current account (by restricting usage of the account).

All of my comments are speculative in any case, as only YBS really know why they have taken the actions they have. The complaints route always remains open to you...

cottager

premierfella wrote: »

I think the only real issue the OP has (which I fully understand) is that they want to use this specific YBS savings account because of the offset facility (and thus the effective interest rate on the credit balance).

I wasn't envisaging funscott closing it (and hopefully YBS aren't considering it either), but things can get tricky when you turn yourself into a business so I was only thinking along the lines of keeping it as they apparently want it to be. They evidently have a bee in their bonnet about something, and an online TF from another personal current a/c probably wouldn't raise the same concerns... and there's a clearer audit trail too if the need arises.

funscott wrote: »

they have no problem with me bring in bags of cash from my other account to put into the savings account (now that looks dodgey). I have done around 13 transfer to the same person over the last couple of month.

It probably took them a little while to figure out they were concerned!
It isn't really their fault... the regulations they have to comply with now are strict, but some can also be a little over-zealous applying them. From odds and ends picked up here at MSE I gather some banks' systems are more sensitive to what they see as potential fraud than others, and this can unexpectedly cause problems for many perfectly legit ordinary personal a/c holders for what seems no good reason; but something will get flagged up and then it has to be looked at.

funscott wrote: »

I have transfered from my other bank without issue today. even with bring in a fat envalope of cash.

We take a fair amount of cash through OH's business, but have a traditional business a/c so it's expected and doesn't raise any eyebrows... not with the bank anyway. Different state of affairs if HMRC start taking an interest, but that's another story! Suffice to say now you're self-employed, be sure to keep very good records... which as a sole trader will include your personal financial stuff as well.

There's good advice in this post on another thread on the Small Biz board, to someone who's just considering starting up in something which will also involve predominantly cash:
http://forums.moneysavingexpert.com/showpost.html?p=30629577&postcount=5

Being recently self-employed, if there's ever anything you need to ask or check, there's potentially a lot of help available from the Small Biz board, about all aspects of business, including taxation queries and all sorts of other stuff:
http://forums.moneysavingexpert.com/forumdisplay.html?f=27

funscott wrote: »

I am in the proccess of opening another current accoutn with my other bank to seperate the cash and i will regulary dump money back into my offset account.

Sounds like a plan