Am i likely to get in trouble or mortgage declined for this?

JustAnotherSaver

Nationwide are sticking on our proof of deposit again. Basically we're depositing £55k, which is all legit.

One question they had was about the £1,000 transfers from my current account each month. I explained to my IFA that this £1,000 completes a circuit - it starts & ends with my bank account. There are bank accounts requiring £1,000 credit in order to get their offer (4% with TSB, £5/month with Halifax (ok that's now £750 credit each month, but as £1,000 is on the move i just leave it at that), so on & so forth - you all know the accounts & their offers by now).
One thing is though - is that i also transfer to my sister. She then transfers it back to me the same day. This is because she has a Nationwide ISA offering 4.25% & she doesn't earn enough each month for the criteria, so just waits for my £1k to be on the move.

So basically it goes to her & she then sends it back to me. Perhaps a bit naive, but i didn't think they'd question that transaction specifically.

1) Am i likely to get into trouble for doing that?
2) Are they likely to decline the mortgage based on that, even though we have a legit £55k?


Furthermore...

They wanted a statement of my ISA which i gave, which they then said wasn't detailed enough.
I went back & got more entries & now they're questioning it.

I transferred my ISA from Halifax to Santander & one of them ballsed up. This meant that £17k came in on 2nd April, went out on 7th April & then back in on the same 7th April.
They're questioning this & they want proof of where it comes from - though i just called Halifax & they said they can't access closed accounts.

Goldiegirl

I have often posted on these boards that the practice of churning money around various accounts looks the same as the layering stage of money laundering.

Every time I've mentioned this, I've had a negative and even agressive response from posters implying I'm being ridiculous blah, blah, blah.

But here we have an example of the sort of situation that can arise when people make multiple transfers though their accounts, on a regular basis , for no apparent reason.

It you are doing it for innocent purposes, you won't get into trouble.

But, now it's been noticed, they'll going through your accounts with a fine tooth comb to get to the bottom of what's been going on, so they can satisfy themselves that the situation is innocent.

If they can finally prove the £55000 is legitimately yours and saved by you, then there's no reason they wouldn't accept this.

But maybe your unfortunate situation will make all the other money churners think for a few moments about the possible consequences of money churning

BobQ

Goldiegirl wrote: »

I have often posted on these boards that the practice of churning money around various accounts looks the same as the layering stage of money laundering.

Every time I've mentioned this, I've had a negative and even agressive response from posters implying I'm being ridiculous blah, blah, blah.

But here we have an example of the sort of situation that can arise when people make multiple transfers though their accounts, on a regular basis , for no apparent reason.

It you are doing it for innocent purposes, you won't get into trouble.

But, now it's been noticed, they'll going through your accounts with a fine tooth comb to get to the bottom of what's been going on, so they can satisfy themselves that the situation is innocent.

If they can finally prove the £55000 is legitimately yours and saved by you, then there's no reason they wouldn't accept this.

But maybe your unfortunate situation will make all the other money churners think for a few moments about the possible consequences of money churning

I do agree with you that the behaviours the banks are encouraging (and indeed allowing us to engage in) could be confused with money laundering particularly when they involve third parties. But the point the OP needs to consider is that she has done nothing wrong. Its all legal and does not breach the terms and conditions of the accounts concerned. Its her money, she has the right to move it around as she pleases. Its not illegal to give your sister a loan for 24 hours. Ultimately what matters is whether the total in all of her accounts is increasing each month by no more than a reasonable proportion of her income.

So my advice is that the OP can do nothing about it now: her accounts tell a story that potential lenders need to unravel. The only lesson I would learn for the future is to keep it as simple as possible so that its easy to demonstrate what has happened. Maybe banks need to consider whether the churning they encourage is wasting their time too.

BobQ

JustAnotherSaver wrote: »

1) Am i likely to get into trouble for doing that?
2) Are they likely to decline the mortgage based on that, even though we have a legit £55k?

Furthermore...

They wanted a statement of my ISA which i gave, which they then said wasn't detailed enough.
I went back & got more entries & now they're questioning it.

I transferred my ISA from Halifax to Santander & one of them ballsed up. This meant that £17k came in on 2nd April, went out on 7th April & then back in on the same 7th April.
They're questioning this & they want proof of where it comes from - though i just called Halifax & they said they can't access closed accounts.

1) You have done nothing wrong.
2) Anything is possible if they suspect something in not above board. But you cannot do any more than help them resolve their concerns. You have done nothing wrong, just explain the facts.

RE the 17k just tell them what happened. Paying £17K in electronic money to someone and having the transaction reversed trhe same day is not money laundering. Had you deposited £17K real money in cash at some point that would be something they might need more explanation about. Surely your account just shows £17K in and £17K out on the same day?

JustAnotherSaver

2 things -

I know what you're saying (so i'm not meaning to be picky), but it wasn't even in my sisters account 24 hours. The money doesn't even stay there 10 minutes. I give her a shout, i transfer, she logs on, she transfers back, sorted. 5 minutes at the very most?

The other thing -

I'm a bit concerned about how far back this is likely to go.

As said, the money is all legit, but how far back are they going to want me to prove it's mine? This could potentially be disastrous.
I started properly saving around 2001-2003 IIRC. Around 2008-2009 i got interested in what many people here do with banking. I opened a lot of accounts & closed a lot of accounts - all for offered incentives etc.

So if they want to go right back to where i had literally £0.00 to my name, then the chances of me proving every single penny are very very slim. In fact, non existent.

holly_hobby

Well the 1k in and out of the sisters account, so she can circumvent the min 1k deposit for pref rates etc, is a bit iffy, as it will prob be the terms that the 1k deposit belongs to the acct holder, and even if not, it demonstrates to an UW some contrived manipulation of the account for benefit which the OP is party to ...

GG you are spot on, and I would never berate you over raising this for others to consider, but I can guess the usual suspects whom prob did try and have a dig or 2 ...

OP - if the 55k is all from legitimate sources, none of its gifted and you have reasonsing and audit trails tracking the money - then it should be ok re ML regs. However, the lender may feel that they are uncomfortable full stop with the amounts of money being moved about between various accounts, on a regular basis (inc the sister account feeding arrangment), and having the jitters may accordingly choose not to lend or withdraw any offer - which of course is their perogative - regardless of whether your actions are perfectly legal.

You'll have to be super detailed, and wait for them to go through it all - they can go back as far as it takes them to satisfy themselves of the sources - records of financial accounts should be retained by the provider for a period of at least 6 yrs post closure/cessation - so anything closed from 2007 onwards should be ok for any proof you may need.

Hope this helps

Holly x

JustAnotherSaver

Thanks Holly.

I just wonder where this ends.

The wife has to show that she transferred £6k from Santander to Nationwide.
She'll be going to Nationwide to get paperwork saying the amount was transferred. She'll also (to try & think 2 steps ahead) be going to Santander to get a statement from her old, closed ISA showing the £6k in there.

One problem - this will show OTHER entries on there. Are Nationwide then likely to go ... where does X come from on that one then, where does Y come from & where does Z come from.

So you explain them with more statements which in turn have other entries on them .... and will they want theses ones explained too?

Which brings me back to the question - where does it end? When you explain every single penny that's ever come into your possession? Who on earth can do that?

holly_hobby

It ends when they are satisifed that the funds are not part of any money laundering exercises.

That can take as long as it takes, they can ask for what they want, etc .... this is not them being awkward but for them to demonstrate they satisfied POCA (proceeds of crime act) and ML Regulation requirements, in determining the funds are wholly from legitimate sources.

Hope this helps

H x

JustAnotherSaver

Thanks for the clarification.

Due to me opening & closing so many accounts to meet so many offers, i can see this taking so long that our sellers pull out.

BobQ

holly_hobby wrote: »

Well the 1k in and out of the sisters account, so she can circumvent the min 1k deposit for pref rates etc, is a bit iffy, as it will prob be the terms that the 1k deposit belongs to the acct holder, and even if not, it demonstrates to an UW some contrived manipulation of the account for benefit which the OP is party to ...

Holly - you say "circumvent" but I cannot see anything in the NW T&C that says that it breaches the rules to accept money from someone else or make a payment to someone else. Of course NW could choose to be difficult but it does not breach their rules.

As GG and the OP notes, it is the banking industry that is encouraging us all to do these things, to chase better rates and do not seem bothered about this kind of behaviour.

holly_hobby

I agree but not when you're having to satisfy mge UW, and as I said my comments re the sister set up, are not whether the feeder arrangement is illegal or even a technical breach of t&cs, but from a underwriting and perception stance.

What I mean by that, is that the OP is depositing 1k into sister's ISA account, purely to satisfy the 1k capital deposit t&c's for her to qualify for an enhanced rate of return under her ISA - which has nothing to do with the OP, nor obviously is she his spouse. Then, the min deposit requirement having been satisifed by the OPs capital, providing her with a higher than standard rate fo return, the sister then immediately returns the OPs funds back to them ... and round and round we go - so you can see the reasons why I think the Underwriter (UW) may have an issue.

The point I am making is that, whilst there may be nothing clear in the ISA t&cs saying you cant deposit someone else's money (and I haven't checked so don't know), and then remove it, in order to meet the critieria - it may considering the above, appear a little off and a tad underhand to an UW, and having had many yrs experience of them, know just how they can interpret and view things. With they not being overjoyed about the underlying basic reason for the arrangement between the OP and his sister - as I said earlier the actions don't necessarily have to be illegal or a technical breach of any T&Cs for an UW to feel jittery, it will be enough for them that it just doesn't sit right.

On the flip side of course they may have absolutely no issue at all with the arrangement - we'll of course know more on the whole matter after the UWs having examined the various docs supporitng the transactions & motivational explanations, and subsequently reveal their assessment.

Fingers crossed that it'll go smoothly ....

Hope this helps

Holly x