Source of Funds Legislation - It's a Mess

fiscoking

Evening All,

Currently got hit by a source of funds demand by Vanquis bank in the UK. It's a large deposit so no surprise. They sent a leaflet explaining the documents I need to send over. Attached. I trigger 9 of the sources and need to go back 15 years.

https://i.ibb.co/2y8Csp2/proof.jpg

Legislation as it stands leaves it up to the institution to figure out what's acceptable or not, what format is acceptable, and how far back you need to go. Each institution can ask for something different. This has turned out to be an impossible problem.

The issue isn't with providing proof as I keep *electronic* copies of almost everything and submit yearly tax returns. The problem is the bank will only accept specific 'originals' via post, and anything electronic or copied isn't classed as original. They've already confirmed they won't accept B&W documents I've printed. The leaflet does say they'll accept certified copies, but I can't find anyone that will certify an electronic PDF. There's no original to compare it to.

I've asked how far they want to go back, but cannot get a definitive answer. The reply is always 'we need to see the source'.

I don't fancy going through this every time I chase a new % rate. A new house yes, but not a new account.

I know the bank is just covering its !!!!!!, but has anyone else run in to this problem? Did they accept email attachments or did you have to go and get paper originals.

Thanks.

Sg28

Sounds like a right pain in the ****. Can you not withdraw and take your business elsewhere?

fiscoking

Sg28 said:

Sounds like a right pain in the ****. Can you not withdraw and take your business elsewhere?

This was my first thought. They've waited over 30 days into a 90 day account to spring the request. The letter also confirms if I don't comply they'll return the money minus any interest as non-compliance will be viewed as an early closure.

There's no guarantee this wouldn't happen elsewhere in the UK though. The only place I've never been challenged is when opening & operating an account via broker like H&L. I've moved much larger sums about with no issue. Might just have been lucky.

dunstonh

I know the bank is just covering its !!!!!!, but has anyone else run in to this problem? Did they accept email attachments or did you have to go and get paper originals.

If you fail the electronic checks they have to revert to the old way. Many of the direct/app based providers appear to have made a decision to not really care if they don't get the business of a small number of people who cannot pass the electronic check.   The old way is quiet manual and time consuming by comparison.  

jimexbox

Anything under 85k isn't a large deposit in my eyes. I couldnt be bothered with the hassle. Have Vanquis frozen your cash?

fiscoking

jimexbox said:

Have Vanquis frozen your cash?

No. I'm still trying to establish exactly what they need to see, as it's going to cost me plenty to get it.

It doesn't help that they won't put a time on how far they want to go back. It finishes when they say it does & makes the whole exercise an open ended errand. The evidence requirements aren't part of their T&Cs either. Just an additional web page on the site. No time frame specified .... All very vague.

I'm not bothered about them closing the account, but I am bothered about the loss of interest which is significant.

If you look at the evidence requirements, the legislation doesn't really stop laundering either. One of the valid sources is a family member gift that just needs a hand written letter and a single bank statement from yourself showing receipt. No audit, accountant, certification... anyone so inclined could just wire the money to family member and have them pay it back to you via cheque to a different account in your name. The statement would show a cheque deposit to your account and you're golden. Talk about a loophole.

Kim_13

Given the number of sources triggered, I’d be minded to look for an accountant willing to look at your digital copies and provide the appropriate explanations on headed paper for the sources where that is accepted. 

What a nightmare. How long have they given you to get it before it’s deemed non-compliance? It doesn’t strike me that a mass paper statement request would be the quickest thing in the world.

Hoenir

Possibly the HMRC are aware. Large deposits made are within their remit. 

droopsnoot

I'm struggling with similar things, for a different situation, I have to prove where money has come from and it's savings I have built up gradually over twenty years or more, coupled with a few other bits. As I read it, I need to show statements every time the money moved, which is quite a lot because I used to move money around when the interest rates made it worth it, so it's gone through three or four accounts. Some providers require that money is moved via a current account, and I use my normal current account as the linked account, so a change would be money from savings to b/s current account, b/s current to main current, main current to new savings. Three statements for each move.

One key issue is that at least two of them are online accounts which never offered paper statements. When I sign in to online banking, I can only pick statements going back to 2021, which is no use as the money had been and gone before then. I requested statements, was told "we only have to keep this information for six years", but they have said they will be able to provide them.

But it's concerning that going paperless potentially leaves me in a situation where I can't show the chain of events to show money coming in one account is in fact the money that will be coming out of a different one. I've tried to avoid going paperless where I have the option, but it's tricky in some cases. I wish I'd been downloading annual statements for these online accounts, and had I realise the information wouldn't be available to me later, I would have done.

fiscoking

Kim_13 said:

Given the number of sources triggered, I’d be minded to look for an accountant willing to look at your digital copies and provide the appropriate explanations on headed paper for the sources where that is accepted. 

They won't accept that. I did ask. I have to stick to the evidence types listed on the leaflet, and not all list an accountants letter. They're just following procedure.This is why I think the legislation is a mess.

It's faster and cheaper for me just to launder the money. It seems absurd that as an honest tax payer I'd have to consider that, but it's not my fault the legislation has been written this way.

Lesson learned.

GeoffTF

If it was me I would ask for the funds to be returned, and submit a formal complaint demanding interest for the 30 days that they delayed contacting you.

I did not get any trouble from Vanquis when I opened an account with £50K three years ago. I did not do more than tick a box to say the money came from savings. If I was asked for more information, I would only go back one step: current account statement and savings account statement. If they want another step, let them ask for it. That is not very satisfactory if they are holding your money interest free, however.

On the general point, there should be a requirement for electronic financial statements to be cryptographically signed so that their integrity and authenticity can be verified.