Can banks insist on knowing your income, even if you are not a borrower?

BRF

What are banks entitled to know about you? I can fully appreciate that if you borrow money they need to assess the risk and have a full financial profile - but I don't. I'm in my fifties, financially secure, no borrowings (for anything, ever!), credit card paid off in full every month, adequate savings, funded pension, and routinely £10-20K in current accounts. I don't take financial advice from a bank (I don't trust them, have had bad experience, don't rate the staff giving advice etc) so I just use a bank to deposit and move money - nothing else. Yet they're demanding to know my income, which since I'll never borrow money from them appears to be stuff-all to do with them. It has amused me in the past that they have assumed they know my income, by assessing cash inflow to a current account (which actually wouldn't tell them anything, but I saw no value in disabusing them). They've also asked me outright in the past, and I fobbed them off with some old cobblers, which I am inclined to do again. Only my accountant and the Inland Revenue knows what my income really is. Any info the bank does hold on me is just used for trying to sell me things I don't want - are they legally entitled to insist on knowing your income? I know there have been legal changes on this in the last decade or so ... anyone clear on this?

Ballard

Banks are legally obliged to go through a procedure known as KYC (know your customer) for all of their customers. The idea is that it would be easier for them to spot money laundering.

Whether or not KYC makes a huge difference doesn't really matter. The important part is that banks have no choice but to comply. Knowing your salary would form an important part of their KYC procedure.

PeacefulWaters

BRF wrote: »

What are banks entitled to know about you? I can fully appreciate that if you borrow money they need to assess the risk and have a full financial profile - but I don't. I'm in my fifties, financially secure, no borrowings (for anything, ever!), credit card paid off in full every month adequate savings, funded pension, and routinely £10-20K in current accounts. I don't take financial advice from a bank (I don't trust them, have had bad experience, don't rate the staff giving advice etc) so I just use a bank to deposit and move money - nothing else. Yet they're demanding to know my income, which since I'll never borrow money from them appears to be stuff-all to do with them. It has amused me in the past that they have assumed they know my income, by assessing cash inflow to a current account (which actually wouldn't tell them anything, but I saw no value in disabusing them). They've also asked me outright in the past, and I fobbed them off with some old cobblers, which I am inclined to do again. Only my accountant and the Inland Revenue knows what my income really is. Any info the bank does hold on me is just used for trying to sell me things I don't want - are they legally entitled to insist on knowing your income? I know there have been legal changes on this in the last decade or so ... anyone clear on this?

The bolded bit contradicts itself. You do borrow, albeit short term.

Your bank has a legal requirement to "know your customer" under anti-money laundering regulations. It's highly likely that they'll use this to justify asking the question. Conversely, the Data Protection Act requires them only to hold relevant information.

More important is establishing if you have to answer that question.

Given that you have a credit card I believe it's reasonable of them to expect an answer from you.

I would think any court cases on the subject will be based around individual circumstances without setting precedent.

badmemory

Yes they can. Blame this government for giving in to the Americans over FATCA. Some banks (HSBC) are now so scared of the Americans that they will soon be asking what side we sleep on and closing our accounts if we don't tell them.

Ballard

badmemory wrote: »

Yes they can. Blame this government for giving in to the Americans over FATCA. Some banks (HSBC) are now so scared of the Americans that they will soon be asking what side we sleep on and closing our accounts if we don't tell them.

I'm pretty sure that FATCA has no requirement for salary to be known.

badmemory

Ballard wrote: »

I'm pretty sure that FATCA has no requirement for salary to be known.

FATCA itself doesn't but the banks are running so scared they are asking for anything & everything to prove they have filled the requirements.

Archi_Bald

BRF wrote: »

Yet they're demanding to know my income,

How are they demanding it?

Are you sure they're not just collecting it for their Marketing purposes? How could they tell whether the number you give them is correct? How would they get to know about changes in your income?

xylophone

How are they demanding it?

Perhaps the OP's trying to open an account - this information is requested on every bank account application I've made.

Ballard

badmemory wrote: »

FATCA itself doesn't but the banks are running so scared they are asking for anything & everything to prove they have filled the requirements.

I really don't think that it makes any sense to put FATCA behind this particular question.

masonic

Even if the credit card is with another organisation, holding a standard current account affords a credit facility (the unauthorised/unplanned/unarranged overdraft), whether or not it is used. So the bank is entitled to ask questions about income in order to determine whether to offer/continue/withdraw access to a full current account. I have no problem divulging the information in exchange for continued use of their products.

But a bank can't demand to know your income. You always have the option to refuse to answer the question and if either you or the bank is unsatisfied you each have the right to end your relationship without giving a reason.

teddysmum

They only want a very rough estimate and income , even low, doesn't seem to bar you from opening an account.