Thread: Natwest Business-they have closed account-Advice needed

In April 2007, I opened a business account with National Westminster Bank

During the first quarter of 2008, I lost my largest customer having gone bust. This threw me into extreme financial difficulty and I went into an unauthorised overdraft with the bank.

I wrote to the bank explaining my position, but they never replied. In July, I received a letter from the Credit Management Services division of the Nat West, saying they were closing my account down. I informed them that there were cheques to deposit and so they allowed me to deposit these.

From then until December I hade used the account like any normal account, depositing and withdrawing money, and issuing cheques. In August 2008, after a lot of hard work, I finally managed to get my business back on track, depositing over £60,000 in the account since August 2008.

However, in December, I received another letter from the CMS to say that my account is closed and I should therefore find alternative banking.

I was so aggrieved at this as I had fought to get my business back on track and was sure that the bank would recognise this and keep my account open.

However, the account was indeed closed and I was told that the balance of the account (£17,000) would be sent to me in a cheque within 10 days. However, when I called the department, I was told that they will not send me the money until I proved where the money had come from! I told them that they had that information on the slip on my paying in book but they insisted unless they get invoices, they will not release my money until they do. This means typing and printing off over 250 receipts with clients’ names and addresses on. Is this something they can do?

Without this money coming forth immediately, I will not be able to pay my mortgage (which is now overdue) and I cannot pay for my cars on contract hire, they will also be repossessed.

I cannot pay my office staff; they will have to sign on the dole. I cannot pay my agents – they will have to find work elsewhere. My business ultimately will be dissolved and I could be on my way to bankruptcy. Because of the problems earlier in the year, I received some bad credit marks on my file and now cannot get another bank account, so this will also affect my business.

Just as important is the fact I will not be able to feed and clothe my family.

I am not aware that the banks could withhold my deposits. Is this what they do with all businesses?


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No-one?

Hiya Star Scream,

things go a bit quiet here over the weekends. Also most of the cases on here are dealing with individuals accounts, not business accounts, which is a whole different bag o fish and dodgy ground.
I am no expert and I can't say for definate whether what they are asking is right, it doesn't really matter, but having had a dispute with Yorkshire ****, I have come to the conclusion that in terms of business accounts, banks can do whatever they like, however incompetant and unhelpful they are.

Sounds like they're being proper arses, but in my opinion if you need the money and they want 250 invoices, give it to them! I can't believe they are going to look through them all, but if they want to play silly buggers just oblige them.
If you get the invoices to them and they still ain't paying up, ring the Financial Services Ombudsman imediately and complain.
Actually I'd do this on Monday to catch them before Christmas and tell them what is going on.
Most importantly contact your mortgage provider and the car hire firms on Monday, tell them what is going on and ask them for some time to get the money to them. Make a part payment to them if you can, if people know they're going to get the money eventually they are usually more understanding.

This is a long term last resort suggestion, but if this does force your business to go to the wall and the bank still aint paying up, there may be a way to pursue a claim on them through the courts for the money plus any other costs they've caused you to incur by owing you this money. I hope for your sake it doesnt come to that.
Most importantly, don't panic and don't despair, just jump through their silly hoop, get printing those invoices pronto, send them off next day delivery and hope you can get it sorted before Christmas.
Very best of luck!

Hi SS,

Have they given you a specific explanation as to why they require sight of these documents, and by what authority they are withholding your money.

Steven 4064 (Site Team) has asked if this is to do with Money Laundering Reg'ns. He added, if it is not, sue them !

This is a disgrace. If you have no skeletons in the closet I would go to the press, or at least threaten it to get them to give you your money.

I don't understand how they can do this, whether it is to do with money laundering or not. Were a substantial amount of the deposits in cash?

Its clear they have acted adversely.
The regulators unfortunately say the 8 weeks is rigid-its set in stone in the banking codes (another voluntary sham)
But dont lose hope.
I suggest you start building a file and putting together evidence.There is such a thing as business interruption that prevents you from trading,not to mention duty of care.The banks seem to think that because business users are predominantly excluded from consumer law,that they can do as they wish.
There are other avenues for damages limitation and Tort.
I will move your thread into the business forums where you can get more advice.
I have been through what you are going through now as have some others here.

Thank you everyone. As far as I know, there is no reason for themn to withold my money. It is simply a case of grafting to turn the business around.

I have tried every avenue, including consumer Direct, but they say it is not within their remit and to contact the fos.

There is absolutely no protection for the consumer at all. The big banks can do whatever they like and get away with it.
Problem is, if I sue them, they can play hard ball then until I go bankrupt.

What a shambles!

Originally Posted by Goldlady

This is a disgrace. If you have no skeletons in the closet I would go to the press, or at least threaten it to get them to give you your money.

I don't understand how they can do this, whether it is to do with money laundering or not. Were a substantial amount of the deposits in cash?

No they were all cheques, no cash at all

I sent e mails to:
The Daily Mail- who have been championing for the small business recently
Telegraph
Sun ( I know! But I'm desperate)
Express
None has even replied to me

Have you spoken to the bank to get an explanation as per para 1 of post #5 above - if so, what was their reply.

I would have thought your local MP may gave something to say about a bank strangling your business in this way.

Goldlady has asked me to comment. The reason I haven't is that I don't have an answer. Once it is with CMS they are effectively closing the account. I am not aware why this would be the case. It may be worth going as far as the executive complaint level on two basis; (1) government money has come with strings attached. (2) the bank will cause you to shut the business even though you have worked hard to get the business back up and running.
The NEW CEO of RBS Group is Stephen Hester. It may be worth as slick has said to speak with your MP as well.
Apologies I cannot offer a better explanation or a solution to your problem.

Thank you all. I have written to my MP, but he sides with the bank and says I should send them what they ask for.

I have now had to borrow money from family to see me over this period. That is not going to last long.
I have now got 1 month arrears on my mortgage ( 2 ON THE 5TH jANUARY) and the payments on my car ( contract hire cannot be met)

I have a solicitors letter from British gas as I have missed the last month payments ( bit quick off the mark I thought) threatening court action if not brought up to date in 7 days

My whole financial outlook is going bad- and yet I have £17K in the bank!

I have requested verbally for them to put the reason in writing and to send me the T&C's/ legislation that allows them to do this, but they havce not replied

Are you not allowed to pay yourself? Surely that would be part and parcel of a business account?
Do you have another personal account set up?

Star scream, I suspect the bank is within its rights to ask for proof. Although they may not tell you this(because to do so could be a breach of the regulations themselves), it may be to do with Money Laundering Regulations.
http://www.hmrc.gov.uk/mlr/mlr8.pdf
Hope that helps but I suspect you will need to start on those invoices. If the bank are asking for them, then ask if the bank can certify the originals and then have them sent off as the originals will be required for the accountant. That may well mean 30 minutes photocopying and certifying for some poor unfortunate branch staff

Originally Posted by yourbank

Are you not allowed to pay yourself? Surely that would be part and parcel of a business account?
Do you have another personal account set up?

No, I cannot access another penny. My personal account is empty becasue they closed the account before I realised and had no time to take anything out.

Unfortunately now, my business has had to close. I cannot pay creditors and they are now threatening court action, despite sending them the reply from the MP as proof.
I am sick to the bottom of my stomach. I have been through hell over the past 12 months trying to get my business back on line. After a majore struggle and many sleepless nights I managed to finally turn it round, only for the Nasty West to plunge me back down again.
I now have no agenrts becasue I caanot pay them. I have had to let 2 office staff go becasue I cannot pay them.

And despite what the government say about small businesses, they don't give a damn. There is no protection anywhere for us or the consumer

I wish I knew how to advise you. I presume you have spoken/shouted/screamed at the bank. I am also amazed that the press aren't interested. Have you given them the copies of the invoices they asked for?

Hi SS,

This is so frustrating to read about, so it must be so much worse for you to have to go through it.

We're hearing a lot of spin about how the banks etc are going to help businesses, or those in arrears.

But the reality seems to be very different and peeps are still being treated with little regard by the institutions.

I finally sent them what they asked for - 262 copies of invoices!

After numerous telephone calls, they finally have said today they will send me a cheque for the balance of what they owe.

This will take 14 WORKING DAYS!!!!
My business has now ceased trading after being refused 4 times to open another bank account.
Two more people on the dole ( three with myself) and I still have to pay £100 per week to the office landlord under my agreement which ends in July 09.
Thanks Nasty West for Jack all.
I asked if they would be so kind as to let me have some money tomorrow as I am 2 months behind now with my mortgage and other creditors are after my skin.
They have allowed me £200 - I am soooo grateful to them.

Hi SS,

Could you use the time waiting for them to pay usefully - in compiling a list of quantifiable losses which their actions, or lack thereof, have cost you.

Their behaviour seems nothjing short of vindictive and they should be held to account and made to pay.

I hope you will be making a formal complaint to the fos at least.

Quick update:
My accountant faxed a letter to them also on 7 Jan.
On Monday 19/1/09 I spoke to a Rob Boyles at credit management services and he told me the cheque would be with me on Wednesday 21/1/09. On Thursday 22 January, I rang again after not having received the cheque, only to be told that the evidence was not good enough and they could not tell me when I would be receiving the cheque.

I then rang back 10 mins later and spoke to Jackie Hine who then told me the cheque was waiting for signing by one of the directors and could not tell me when he will do that as he is ‘ very busy’. Too busy too spare 2 seconds to sign my cheque?

My business has all but ceased trading, I have had to lay off 2 staff, and I have no income. I am now getting into serious financial difficulty. This is not because of the Global Downturn, it is because the Bank will not release my money !!!!!.

They are withholding over £14,000 which is rightfully mine and I see no legal reason for them not to send it.

My business is more likely to now go under unless I can get to my money. Notwithstanding the fact that my mortgage and bills will not be paid and my family will not be fed.

This has caused the following problems:
Personal

1 Month in arrears with my mortgage
2 months in arrears with my Council tax and now threatening to take me to court
2 months arrears with my utilities. Solicitor also threatening court action
Home phone disconnected
Mobile phones disconnected
Bank overdraft of £1000 has been recalled because there is no money going into the account
Ground rent in arrears and now the lesser has added £70 on to the debt for late payment. The debt is only £6.75 !!!!!

Soon my mortgage lender will take action as will many others if I do not get this money to pay them.

Business

1 Month behind with office rent- eviction threatened
Business phones could be cut off any time
2 cars on contract hire have arrears on the monthly premium and will also be repossessed
2 staff have already been laid off

Notwithstanding the pressure all this has out on my marriage with constant rows and worries.

I cannot beleive there is no help out there for me.