Bank closing accounts

Ed-1

A friend of mine recently received notification from one of his banks that his accounts were to be closed in 60 days due to some recent risk assessment.

It seems that they picked up on the fact that he had been (legitimately) transferring some of his money to and from 2 of his current accounts in order to exploit the differing cut-off times of these two banks.

He initially thought fair enough - the bank can close his account if it wants as this is part of the terms and conditions. The problem has come in that he can't open a bank account elsewhere due to a 'misuse of facility' CIFAS that the bank registered.

Now firstly, am I right in thinking the activity (although obviously construed as suspicious/fraudulent) was legitimate? The money was his - the transfers weren't fraudulent so how can the bank justify a CIFAS marker? Isn't anyone free to move their money between their accounts as often as they wish?

Secondly, what can he do about it?

Archi_Bald

Might be worth your while to do some further research on the stoozing.com forum. I recall, from a few years ago, that several people had their accounts closed when they engaged in those shenanigans. Can't remember what they did about it and whether any of them got CIFAS markers.

butterflymum

Ed-1 wrote: »

The problem has come in that he can't open a bank account elsewhere due to a 'misuse of facility' CIFAS that the bank registered.

Now firstly, am I right in thinking the activity (although obviously construed as suspicious/fraudulent) was legitimate?
Secondly, what can he do about it?

Has he pointed out to his bank that the definition of this marker on CIFAS website ( https://www.cifas.org.uk/what_are_the_fraud_types_cifas_uses) says:

Misuse of Facility – Obtaining an account/policy or other facility with the deliberate intent of using that facility for a fraudulent purpose (for example, deliberately avoiding repayments or using an account to receive stolen funds or fraudulent transfers).

and asked CIFAS and the bank for further clarification of the term 'fraudulent', and asked the bank why they believe it applies to his circumstances?

starM

Which bank has put the CIFAS on?

Ed-1

starM wrote: »

Which bank has put the CIFAS on?

Lloyds has.

butterflymum

From 2 years ago, but worth a read:

http://www.thisismoney.co.uk/money/saving/article-2246643/I-branded-criminal-How-targeted-fraudster-unscrupulous-banks.html

Vortigern

By exploiting the different cut-off times of the two banks he earns interest on the same £xxx for the same day at 2 different banks. Why would this not be fraud?

starM

butterflymum wrote: »

From 2 years ago, but worth a read:

http://www.thisismoney.co.uk/money/saving/article-2246643/I-branded-criminal-How-targeted-fraudster-unscrupulous-banks.html

Interested. Banks at least should tell customers CIFAS has been registered so customer can provide evidence in order to remove it.

Customer will not know CIFAS has been registered. Many people in UK will not know what CIFAS is. They will just obtain their credit report. Not all CIFAS will show up on credit report. They will know once SAR has been made which will cost £10.

By that time application for credit card/current account and mortgage would have been declined. Possible existing accounts with other banks would have been closed.

Also CIFAS is now recorded for 6 years. Previously it use to be 13 month.

Archi_Bald

Vortigern wrote: »

By exploiting the different cut-off times of the two banks he earns interest on the same £xxx for the same day at 2 different banks. Why would this not be fraud?

For it to be fraud, it would have to break one or more laws. Which laws do you reckon would be broken, and why would an anonymous employee of a bank have the right to unanimously decide it is fraud, without even telling the alleged fraudster?

Incidentally, I have never engaged myself in shifting money about late at night in order to make some extra interest. It never appealed to me. But I think it is outrageous to label people fraudsters, without them having had a chance to defend themselves in a court of law.

xHannahx

Shifting money about as described is something money launderers do a lot of. Lloyds should of carried out an investigation but would not be allowed to advise the customer as that may constitute "tipping off" prior to placing the marker.

Archi_Bald

xHannahx wrote: »

Shifting money about as described is something money launderers do a lot of. Lloyds should of carried out an investigation but would not be allowed to advise the customer as that may constitute "tipping off" prior to placing the marker.

Money launderers are not swapping the same amount of money each night between accounts that belong to the same person.