How do I minimise the risk of having my bank account locked?

blue.peter

Banks have become notorious in recent years for locking customers' accounts if they see unusual activity.

At some point in the next few months, I'm going to need to transfer a large sum of money from my ISA (with Hargreaves Lansdown) into one of my current accounts (TSB) and then pay it on to my solicitor in order to buy a house. This will be an extremely unusual transaction - over 20 times the size of anything previously seen on that account. The risk is that someone at TSB (or an automated computer system) will flag it as suspicious and lock the account. Getting it unlocked could possibly take long enough to stop my house purchase, even though I won't have done anything even remotely naughty.

I've thought of two possible ways in which I could minimise the risk:

1. I could transfer the money to a TSB cash ISA and then from that into my current account. That way, TSB would be pulling the money in, and know that it's from an ISA. They'd presumably know more about it that way than if it was pushed by HL (is this correct?). Even then, they might be concerned that I was being defrauded. Another possible downside is that a transfer from an S&S ISA can be very slow. If memory serves, 30 days is allowed.
2. I could phone TSB in advance and tell them what's going on. But how effective would this be? Would they take any notice? Would they turn off any automated flagging?

Does anyone have any better ideas, or comments on those above, please?

[Deleted User]

If it's coming from an ISA, I wouldn't be concerned. It's when you receive large or odd transactions from individuals that banks tend to worry.

tacpot12

In November, I received the proceeds of a house sale and invested it with AJ Bell and Vanguard, and at the start of the new tax year I moved £20,000 from Vanguard to my current account and paid it to AJ Bell. None of this resulted in any delays or problems cause by NatWest, so I would think that you will be ok. I didn't speak to NatWest about it, and I'm not sure that it would have helped. 

I think you will be ok because of the amounts involved. You are probably going to have to speak to TSB to request the house purchase money to be sent to your solicitor as it will be more than the daily limit on your online banking service. 

Please call your solicitor by phone to check the sort code, account number and account name before initiating the transfer. 

[Deleted User]

Deleted_User said:

If it's coming from an ISA, I wouldn't be concerned. It's when you receive large or odd transactions from individuals that banks tend to worry.

I know this is anecdotal, but the fraud prevention measures appear to be a lot more sensitive than this in my experience. I've twice had accounts locked in the last year just from making transfers between my own accounts that were all under £5,000. I managed to unlock them but it took several hours on the phone each time. These weren't particularly odd transactions, I was simply moving savings from one account to another after an interest rate cut. It was just a case of computer says no and even the person at Lloyds that I spoke to the first time couldn't really understand why it had been flagged.

I'm not complaining about this incidentally, I understand why banks are trying to stop fraud, I'm just saying that the OP is probably right to be concerned that this could be an issue.

blue.peter

tacpot12 said:

I think you will be ok because of the amounts involved. You are probably going to have to speak to TSB to request the house purchase money to be sent to your solicitor as it will be more than the daily limit on your online banking service. 

Please call your solicitor by phone to check the sort code, account number and account name before initiating the transfer. 

I was thinking in terms of writing a cheque to the solicitor, rather than direct transfer - that's what they asked me to do when I had to pay them about £40k from savings to buy my present house. (Different bank, same solicitor.) You're right about it being well over my daily limit for online banking, though.

JosephK

Even asking the bank for advice, you likely won't get a definitive answer. Last time I made a large payment, queried beforehand if it would go through OK without query to be told "don't know, it might, it might not." Fortunately, it did.

blue.peter

JosephK said:

Even asking the bank for advice, you likely won't get a definitive answer. Last time I made a large payment, queried beforehand if it would go through OK without query to be told "don't know, it might, it might not." Fortunately, it did.

Yes, I realise this, thanks. That's why I used the word "minimise" rather than "eliminate". Of course, it would be great if I could eliminate the risk.

kuratowski

Option 1 sounds good to me.  I would go further and open the Cash ISA today, and initiate the transfer, not relying on the "30 days" target.  An ISA transfer should be in the normal course of business, and moving money between your own accounts with the same bank is normal as well.  That just leaves the cheque to the solicitor...

schiff

My main current account (Santander) has been locked twice in the last fortnight for no reasonable reason at all. On Monday I felt that I knew the trigger. I was making my usual raft of FPs to regular savers, it was the first working day of the month. I was making a FP to a Virgin RS account for the same sum as I have been doing to the same account for some months now. The account was listed, like all the others, in my payees. The block was instant.

The phone call is a nightmare. Apart from the usual ID I had to rattle off any payments I had made recently (easy as it happened as I had a list in front of me). Idiotic things like the number of the first and last numbers in my cheque book.
I argued my case vigorously, trying to keep my cool and it took ages. Spoke to two people - the first, after a lengthy inquisition, transferred me to the Security team and even the second MOS had to consult someone else.
It's not their fault, the way it's being handled is too demanding and there is no common sense on display.

I have my Virgin accounts listed with identifications for my own use, having overridden the warning that comes up. As a test I entered Virgin Money (Clydesdale Bank PLC) exactly as it showed when I made a start with the sort code 08-60-64.
I was then told that that particular bank was not in the system!

Crackers, but unfortunately we're stuck with it. Why not put a temporary block on the account while they phone you to clear things up? 

Thrugelmir

blue.peter said:

Banks have become notorious in recent years for locking customers' accounts if they see unusual activity.

Unless you are a money mule or conducting some other illegal activity, or contravening the terms of the account i.e. running a business through a personal account. You've no need to concern yourself.  Vast majority of people never encounter any issues. 

blue.peter

kuratowski said:

Option 1 sounds good to me.  I would go further and open the Cash ISA today, and initiate the transfer,

Thanks. I can't do this immediately, because I don't yet know the amount of the required transfer. My present house is on the market, but I don't yet have a buyer and nor have I yet found a house that I want to buy. I only know the expected difference in price to within about £20,000. I think that I'll discuss this option with my solicitor when I see her.

I know that it sounds as if I'm putting the cart before the horse. I think that I am. Unfortunately, there are some estate agents effectively forcing me to do it this way. When I phoned one to arrange a viewing, I was actually refused because I don't yet have a buyer lined up. "Because of the pandemic", she said. Being an old cynic, I suspect that the real reason was that it's in estate agents' interest. (I'm not too worried about missing out on that house. Although it had features that I loved, I think that there was a reason why it wouldn't have been suitable. Unfortunately, it's one of those things that you can't be sure about without standing inside.)

I can see myself keeping a prospective buyer hanging on so long waiting for me to find a house to buy that they drop out and we have to start again. I don't like doing it this way at all, but the alternative is that I give in to my buyer's pressure and end up buying a house that I don't really want. My estate agent understands, and I've told him explicitly that I want him to be completely open and honest about the situation with potential buyers.