Scam? Big Brother? or USA takes over the World?

Spruance

This morning my elderly mother received a letter and some forms, purportedly from Saga Personal Finance with whom she has an investment product.

It is headed up...

"We require some more information from you for tax purposes"

Fair enough you might say but the letter goes on:-

"We are writing to ask for some additional information from you, to help us complete your account profile.

In order to comply with the law, we are required to review all of our existing customers, to determine if they are U.S. citizens or residents of the U.S. for tax purposes."

The questions go on to imply that they suspect my mother to be a potential U.S. taxpayer and require her to supply "a copy of a non-U.S. passport or other government issued identification to show that you are not a U.S. citizen". She is also asked to complete a U.S. government tax form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding Individuals.

Well, Mum is most certainly not a U.S. citizen. She was born in England has lived her entire life in the country and has never even held a UK passport let alone a USA one.

I felt at first sight that this had scam written all over it and having drawn a complete blank on a web search (of similar cases) this evening I am still thinking that this is one for the recycling bin.

So, my question is does anyone have any idea what this could possibly be about?

Keep_pedalling

The IRS has very lost tentacles and the only way a non dom US citizen can escape them is to renounce their citizenship. They will also come down like a ton of bricks on any company that lets a U.S. Citizen escape their taxes.

It sounds like your mother has some U.S. stock held with SAGA which is what the tax withholding form is all about. I am pretty sure this is not a scam.

noh

No it is not a scam.

The wording looks to be as i would expect.

Here are some links for you to read

https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_Act

and from SAGA sharedealing which would also apply to all investment and savings products from all providers.

https://sagasharedirect.co.uk/faq/category/fatca

Spruance

It still seems very fishy to me. The Saga letter does not include Mum's account number and she does not hold any USA stocks/bonds.Her investment product is a fixed rate savings account. In actual fact Saga in this case are acting as agent for Birmingham Midshires, which is part of Halifax Group and ultimately Lloyds Banking Group. Mum does not want to phone the number on the letter in case it's a scam but she is intending to visit the local Halifax branch tomorrow and says she will take the documents to show them.

It also seems very strange indeed that no-one else seems to have posted online about this.

Thanks for the FATCA link - never heard of that before, but incorporating that in my search routine has thrown up an interesting Q&A session on First Direct's website. Now presumably the Act is not open to interpretation and so this aspect highlighted by First Direct must surely apply across the board :-

Am I only affected if I am a citizen of the USA? No. If an individual's account holds any of the following eight criteria, first direct may request further information/documentation to determine if the individual is a US person under FATCA.

• US citizenship or US residence
• US Tax residence
• US place of birth
• US address including US PO boxes
• US telephone number
• repeating payment instructions to pay amounts to a US address or an account maintained in the USA
• current Power of Attorney or signatory authority granted to a person with a US address
• in care of or hold mail address which is the sole address for the account holder.

My Mum is not a US Citizen or US tax resident, She was not born in the USA, does not have a USA address or telephone number. She does not make payments to the USA and unlike me doesn't know anyone in the USA. She has no Power of Attorny linked to the USA and does not use a care of mail address. In short she has no connection whatsoever with the USA and I fail to understand why Saga are hounding her for this information.

Cook_County

All UK financial institutions are required to do this under the 2013 Finance Act signed by the Queen back in 2013. If an individual refuses to provide data the institution may decide to report to HMRC or close the account.

Voyager2002

It sounds as if the documentation is genuine, and I have in the past received letters with a similar wording. However, at the time my forwarding address was in the USA: from what you say the most probable explanation is that Saga sent a genuine letter to the wrong customer.

Spruance

Just quickly coming back to this...

I posted about this on Saga's Facebook page and one of their media managers has been in touch and we have been exchanging emails and have also spoken to someone within Saga Personal Finance to try to get to the bottom of the situation but so far Saga PF have been utterly clueless and can offer no explanation as to why these forms have been sent out or indeed why they have seemingly been sent to ALL Saga/Birmingham Midshires customers.

To reiterate, my Mum holds only a fixed rate UK savings account with Saga. She holds similar accounts with Halifax Bank, and has cash ISAs also with Halifax Bank.

How many millions of people are there in the UK in exactly the same position? Yet there is virtually nothing whatsoever online about holders of UK savings accounts being required to complete tax documents originating with a foreign government. No doubt the reason for this is because Saga have sent the forms to my Mum in error, something which we are still struggling to persuade them is actually the case.

agrinnall

Isn't the simplest way to close this down to just fill in the form and send it back?

EdSwippet

agrinnall wrote: »

Isn't the simplest way to close this down to just fill in the form and send it back?

It may be, but I'm all for throwing sand in the gears here. Any UK bank that demands a US tax form -- signed "under penalty of perjury" -- from UK citizens investing in purely UK savings vehicles is providing a terrible customer experience and deserves to be taken to task.

Also, something that seems to have escaped the notice of people who threw together the regulatory nightmare that is FATCA is that having a non-US passport does not prove that someone is not a US citizen. Dual citizens carry two passports.

Cook_County

Spruance wrote: »

Just quickly coming back to this...

I posted about this on Saga's Facebook page and one of their media managers has been in touch and we have been exchanging emails and have also spoken to someone within Saga Personal Finance to try to get to the bottom of the situation but so far Saga PF have been utterly clueless and can offer no explanation as to why these forms have been sent out or indeed why they have seemingly been sent to ALL Saga/Birmingham Midshires customers.

To reiterate, my Mum holds only a fixed rate UK savings account with Saga. She holds similar accounts with Halifax Bank, and has cash ISAs also with Halifax Bank.

How many millions of people are there in the UK in exactly the same position? Yet there is virtually nothing whatsoever online about holders of UK savings accounts being required to complete tax documents originating with a foreign government. No doubt the reason for this is because Saga have sent the forms to my Mum in error, something which we are still struggling to persuade them is actually the case.

The law is not foreign law, it is UK law enacted by the UK Parliament in the 2013 Finance Act.

Cook_County

EdSwippet wrote: »

It may be, but I'm all for throwing sand in the gears here. Any UK bank that demands a US tax form -- signed "under penalty of perjury" -- from UK citizens investing in purely UK savings vehicles is providing a terrible customer experience and deserves to be taken to task.

Also, something that seems to have escaped the notice of people who threw together the regulatory nightmare that is FATCA is that having a non-US passport does not prove that someone is not a US citizen. Dual citizens carry two passports.

Financial institutions are required to identify US persons; carrying a US passport is by no means the only test; a US place of birth would be an unambiguous indication of a US person.