Is Cycling Money through my accounts each month Illegal ?

AlisonGray

Help !, can someone please tell me the Legalities of this as I have just had a horrible idea that it might be looked upon as fraud or something and get my accounts closed or worse !.

I have 8 accounts that I cycle money through each month from my Barclays account, I use my own money as each account has a healthy balance, and I never use a overdraft or go overdrawn because of this, my view is it’s my own money, but I am not sure if the bank would share my view.

I need to cycle money through each to get the higher rate of interest and other benefits etc, so I have divided it to 3 times a month, on the 1st, 15th and 22nd of each month:

On the 1st I transfer £1000 to Lloyds and back to Barclays, another £1000 from Barclays to Clydesdale Bank and back to Barclays, then £1000 to Bank of Scotland for 1 vantage account and back to Barclays.
On the 15th I transfer £2000 to HSBC (Advantage Account) then back to Barclays and £1000 to TSB then back to Barclays.
On the 22nd I transfer £1000 to Bank of Scotland Vantage 2 then back to Barclays, then £1000 to Halifax Reward 1 and back to Barclays and then £1000 to Halifax Reward 2 and then back to Barclays.

It is all automated with standing orders so I don’t have to touch anything. But its £3000 3 times a month, that’s £9000 a month coming in to Barclays !, or £108,000 a year !, are they going to see it as £108,000 going in as Income !, if so £108,000 is a lot in a year !.

So is this legal ?

Archi_Bald

Which law do you think you'd potentially break?

YorkshireBoy

You could trim it slightly, to reduce the 'impact' on Barclays. For example...

Cross fund BoS, ie £1K BoS1-->BoS2-->BoS1, and

Manually, within the same online screen, fund HFX from BoS, ie £750 BoS1-->HFX1-->HFX2-->BoS1.


EDIT: Do you keep high balances in HFX? If not, that's a bit risky and could create problems if Barclays have a technical problem sending the SO.

AlisonGray

YorkshireBoy wrote: »

You could trim it slightly, to reduce the 'impact' on Barclays. For example...

Cross fund BoS, ie £1K BoS1-->BoS2-->BoS1, and

Manually, within the same online screen, fund HFX from BoS, ie £750 BoS1-->HFX1-->HFX2-->BoS1.

Thanks that's a possibility, but is it fraud no matter which way I do it ?

AlisonGray

Archi_Bald wrote: »

Which law do you think you'd potentially break?

Not sure, I guess the £108,000 got to me, it must set alarm bells ringing, I suppose it looks like I am artificially increasing my income ?.

Archi_Bald

AlisonGray wrote: »

Not sure, I guess the £108,000 got to me, it must set alarm bells ringing, I suppose it looks like I am artificially increasing my income ?.

There is no law that regulates how much and how often you can send money between your accounts.

If it puts your mind to rest: people like myself have been circling money around a huge number of accounts for years, and none of them got arrested or prosecuted. Nor will anyone get arrested or prosecuted for it.

Goldiegirl

If you are doing it for honest reasons, then no it's not fraud.


But, the process you are describing can look like the layering stage of the money laundering process. (moving money around multiple times to hide it's original source).


There could be an outside chance that a member of bank staff (probably Barclays) might think it looks a bit strange, and put in a report to the banks Money Laundering Reporting Officer. It would then be the MLRO's decision whether to look into it further.


I do cycling myself, and do it manually, I start off with Halifax, and transfer through Nationwide, Tesco and TSB, arriving back at the Halifax.


Doing it like this seems less likely to attract adverse attention.

TheBanker

There is a type of fraud which this may look like (although it isn't). By moving money out of and back into your Barclays account, you are artificially increasing your credit turnover which is one of the things they look at when considering loans/overdraft requests. It is in theory possible that Barclays could assume this is what you were doing and close your account.

I would agree with the suggestion above to reduce the credits going back to Barclays by moving the money directly between the other accounts.

What you are doing is completely legal and the above suggestion is simply something that may head off potential problems before they arise.

AlisonGray

Thanks everyone for all their help, but one last question.

Would the type of account also matter, for example if you had a basic account then £108,000 might look more suspect than if you have a Barclay's Premier account which has say a minimum funding of £75k+ a year, and high value transactions would be normal in that type of account.

Or does it simply not matter ?.

TheBanker

AlisonGray wrote: »

Thanks everyone for all their help, but one last question.

Would the type of account also matter, for example if you had a basic account then £108,000 might look more suspect than if you have a Barclay's Premier account which has say a minimum funding of £75k+ a year, and high value transactions would be normal in that type of account.

Or does it simply not matter ?.

I think it does in the sense that if your account flags as unusual on their internal systems, someone will manually review it and take into account the other information available such as the type of account, customer profile etc.

colsten

All the banks are completely aware of the minimum payments the various current accounts need and won't blink an eyelid if you swap the same amount of money month after month between the same accounts.