LISA provider keeps asking for further proof on funds

Kaizen917

I used to hold a cash LISA which I moved to investment one last summer. Over the past few weeks, my current provider started asking for source of funds. It appears the trigger for them was that I am using three different current accounts (in no particular order) to have it funded as they asked me to explain why Im doing that.

So they asked me to fill a form + provide a bunch of documents such as P60, payslips, statements to prove my source of funds just to come back and ask for further statements on other accounts I had. This is sort of never ending as Im one of the people with the likes of 10 regular savers and current accounts in any bank that may offer something good so its a constant rotation on some or all my funds. In addition they came back yet again asking for statements from the cash LISA I transfered to them + that they would rather if I sent them electronic pdf copies of my P60 instead of the scanned pdf which Im not even sure I can provide.

At this point, while not impossible to comply, I cant help finding this a bit over the top. Would it be an overreaction if I send a complaint to an ombudsman about it given the stage Im at with them? Alternatively, would they stop me from transfering to another provider and save myself the headache? They say I cant make withdrawals but its a LISA so not planning to in the next 20+ years.

dunstonh

Would it be an overreaction if I send a complaint to an ombudsman about it given the stage Im at with them?

The FOS cannot override anti-money laundering requirements.  The 5th directive recently came in and saw an increase in requirements.

Alternatively, would they stop me from transfering to another provider and save myself the headache? 

No.  But they may just add an potential fraud marker on you and destroy your ability to get accounts elsewhere.  

Kaizen917

hmm fair point and I totally get where they are coming from which is why I dont have a problem with the check itself, just didnt expect it to compete on documentation with the stuff I needed to provide when buying our property.Especially when ive had all sorts of accounts for years and that never happened.

There is an element of irony that the main premise is preventing money laundering by suspecting I would use an investment LISA for that.

wmb194

They are easy access so you could use them for laundering just as well as any other account. Apart from complying with the requests as best you can, my suggestion for the future would be to use just a single account to fund it - I have a great many accounts as well but I still have a main 'hub' current account.

Another issue that can trigger suspicions is where what you've stated as your employment status and income doesn't appear to match what they're seeing with your account activity e.g., if you stated that you're unemployed but you're depositing large sums.

Lomcevak

Kaizen917 said:

This is sort of never ending as Im one of the people with the likes of 10 regular savers and current accounts in any bank that may offer something good so its a constant rotation on some or all my funds.

It's worth remembering that what's normal for MSE is very much not normal for the general population, so by using multiple accounts and having complexity in source of funds checks you are likely to stand out as unusual in KYC / AML compliance.

george4064

wmb194 said:

They are easy access so you could use them for laundering just as well as any other account. Apart from complying with the requests as best you can, my suggestion for the future would be to use just a single account to fund it - I have a great many accounts as well but I still have a main 'hub' current account.

Another issue that can trigger suspicions is where what you've stated as your employment status and income doesn't appear to match what they're seeing with your account activity e.g., if you stated that you're unemployed but you're depositing large sums.

I do the same (have a main hub current account) and have no issues whatsoever.

Kaizen917

wmb194 said:

They are easy access so you could use them for laundering just as well as any other account. Apart from complying with the requests as best you can, my suggestion for the future would be to use just a single account to fund it - I have a great many accounts as well but I still have a main 'hub' current account.

Another issue that can trigger suspicions is where what you've stated as your employment status and income doesn't appear to match what they're seeing with your account activity e.g., if you stated that you're unemployed but you're depositing large sums.

I didnt and in fact my income which they can see credited on the statements is sufficient to cover the LISA limit in about a month or so. The money also gets moved electronically by myself between accounts as needed - no funny ATM withdrawals or cash deposits that would be more ambiguous. If my ISA provider was to ask for this, that would have made sense when the yearly limit we talk about is 4 times more.

But yes, the trouble is trying to make sense out of a person having different current/saving or regular saver accounts and up on the various transfers between accounts.

I suppose its a learning curve. Ive never seen it happen before but ill play ball to hopefully get it resolved and I already convinced myself to transfer to another provider in the upcomming year.

Bigwheels1111

This is why I fund all my products from one account only.
From November last year I’ve funded 7 fixed rate savings products, 1 isa, 1 more today, 5 regular savers and 4 easy access accounts.
All start from and are paid out to my main bank account. 

That way there is only one point of failure possible, or questions to be answered.