Lloyd's close Business Account without warning

[rakehell247]

We are a small partnership and had one account with Lloyds.

 

With all the troubles with the economy and late payments from our customers we used the £4,000.00 overdraft facility, every month.

 

We kept in contact with our business manager and had a good working relationship. He left at the end of November and actually asked a reference from us.

 

Recently, the business had started to pick up and we managed to reduce the overdraft. The final deposit made was a bank transfer of £1,200.00 for goods sold.

 

We found out yesterday that our account had been closed and the new business manager is claiming that a letter had been sent, back in October.

 

There are no letters that can be found. If we had known, we would have made other arrangements and certainly made sure that the money was sent to another account.

 

From what I gather this happened during the 1990's when the banks closed many accounts and started the recession. The banks are exacerbating the problem by these practices.

 

Has anyone else encountered the same problem?

[Guest wino]

I put in a complaint about our business manager at Lloyds about some problems with our account (The bank lost thousands of £s from our account!) and the way they were dealt with or should I say not dealt with.

 

We received a letter giving us notice that they were closeing our other accounts for a completly seperate business. We ran the accounts well and were never overdrawn or used an overdraft.

[banker_rhymes_with]

Hello rakehell247!

 

Sorry to hear this. Banks are not to be trusted, full stop.

 

If you are a Partnership (same applies to Sole Traders), then there is nothing to stop you using Private Accounts. There is no need to use a Business Account.

 

They are less expensive on charges, and you are also better protected, on the whole, because Private Accounts are better protected by Consumer Legislation...not a lot, but certainly more protection than you get from a Business Account (ask anyone with a Business Account trying to reclaim Charges at the moment why that may be so!).

 

If you are a Husband & Wife Partnership, even better, just use a Joint Private Account. Your Business will be you Trading As, so no real problem at all if so.

 

My advice would be to open a few Accounts, spread them around, and make sure they all have on-line banking. Keep money moving, and never rely upon just one Account.

 

If your Debt Rating is such that you can get a Business Account, then get one if you feel you need it, then get another one somewhere else, so this won't catch you out ever again.

 

I do know it is hard, but start building Cash, and try to forget about Overdrafts and financing anything via Debt. It is the best strategy in the longer term, and you will not regret it once you hack the jump from being Debt based, to being Cash based and operating in the black.

 

The added bonus is this will all gradually help to starve the Debt Industry of the very thing it needs to survive. If everyone adopted this frame of mind, we'd all be far better off. Eventually, we might just shake off the army of parasites that currently gorge on the main economy.

 

They think we need them, whereas we know we don't need them. The mess they have caused is ample evidence of that.

 

I hope this helps.

 

Cheers,

BRW

[rakehell247]

In our case it was a few mistakes on our part.

 

New showroom and not actively pursuing the previous business partner who had stolen money from the company.

 

When we did, we hired Harbottle and Lewis, who was supposed to take it on a no win, no fee basis. We did not realise how long they would take.

Hired them on December 2008 and in all that one year, they produced:

two letters,

one Barristers report, (£1400+ costs to us)

and two statutory demands.

 

We had already paid about £5,000 and they presented a bill totalling £11,000.00. Didn't realise:

a 6 minute phone call would cost £26.50,

reading an email is £43.00

or a two hour meeting would cost £731.00.

 

 

They even charged us £300.00 for a Company's House Report we already provided.

 

We sent a letter complaining and they simply replied that they will no longer be working for us. They will be keeping all copies of their work and will pursue for the rest of their money.

 

We now have had to hire another litigation firm and will probably have to sue Harbottle and Lewis.

 

Should find out a bit more regarding their charges and whether what they did was completely legal or we were given poor service.

 

Perhaps I should start another thread regarding our so-called law firm.

 

Are there sub-forums complaining about law firms?

[rakehell247]

Update on closed bank account:

 

We've called the Banking ombudsman and complained about Lloyds Bank.

 

We also provided the email from the previous business advisor stating that we were good customers, wishing us success in the business and asking for a reference.

 

The fact that there were no records sent and that they closed the account immediately after money (£1,200.00) was transfered. looks suspicious.

 

It has limited our cash flow and will have to wait till next week before a new account is opened under the business name. We can't even deposit on our personal accounts as the cheques are "pay to account name" only.

 

All our transactions will take a week before we can process and that will hurt us during this December.

 

Unfortunately, it will take three months to resolve.

[Guest Alison82]

^^ Sorry to hear that rakehell247

 

 

I have just opened a business account with lloyds, I don't require any overdrafts or loans, i hope it will be ok. I might ring my b manager and find out whats going on!

[kurvaface]

I am so glad we moved our business away from lloyds.

 

I've posted somewhere else on here a comment form my business manager when I asked him what I do for a living or what my business does.

 

His answer was, "I am sorry.............I don't have that information"!!!

 

And to think we virtually own that bank.....

[zmh8888]

Hi,

 

We have just had our Business account closed without warning. We have a small charity and it is depending on individual monthly donations. We just found out about the problem after some donors informed us that their donations have been bounced back. Lloyds sent a cheque with the Charity name. Well, where can you use the cheque if you do not have any other accounts? Is there anything we can do?

 

ZMH8888

[rakehell247]

Hello:

 

Only thing we could do was use our personal accounts and have our invoices reflect that change.

 

How can they close an account for a charity??? Can you open another?

THey didn't send a warning letter?

 

If banks are using the same tactics they used in the 1990's, closing bank accounts, we could see more businesses go under in a few months.

 

You should complain to the banking ombudsman as well.

[Guest wino]

Hi,

 

We have just had our Business account closed without warning. We have a small charity and it is depending on individual monthly donations. We just found out about the problem after some donors informed us that their donations have been bounced back. Lloyds sent a cheque with the Charity name. Well, where can you use the cheque if you do not have any other accounts? Is there anything we can do?

 

ZMH8888

 

Have you asked Lloyds for an explanation?

[captain2]

Hi there Ive just had 3 business accounts closed ! I've still got 2 ! You can run things through a private account but its not as easy with trading names etc...

HOWEVER if you look at the Lending Code - used to be Business Banking Code there is exactly same protection for businesses as with private banking code and FOS can deal with matters arising under it, Failure to notify with reasonable time can give rise to damages for loss of reputation - which is all handled free by FOS so no need for rip off lawyers it may not get the account opened again although I think that may also be possible too if you cant go anywhere else -

so its definitely not a lost cause ! Though it wont progress quickly but you also have the pleasure of knowing the banks don't like the FOS finding against them -

 

Anyone on here got any knowledge of banks calling in secured loans when not in default ?

 

I bank also with Barclays and am in default they have told me as soon as defaults rectified full banking facilities can be resumed - seems a different sort of approach to Lloyds -

[zmh8888]

Hi,

 

So far there is no explanation from Lloyds. We have been the branch where the staff checked on the computer and all they can say/do is to tell us that the account no longer exist. We rang them and they redirected the calls to different people who are useless.

 

We are going to make a complaint.

 

Thank you for your advice.

 

ZMH8888

[kurvaface]

Good luck with the complaint. The complaints department at Lloyds is next to useless but unfortunately you have to go through the procedure b efore you can go to the ombudsman:mad:

[rakehell247]

Update:

 

Went to another bank to open another business account. When they found out that our Lloyds Business account had been closed, they did not want to know.

 

We called in to our branch of Lloyds bank to see what we could do.

 

We were advised to send a letter of complaint and when we called the next day, found out that the business manager was on holiday.

 

The lady we spoke to checked the details and found that business manager had lied about the situation. No letter was sent informing us of the business account being closed.

 

We can use the account, but they might take the money to cover the rest of our overdraft.

 

She agreed that it was a wrong move on the business manager's part and have no idea why she would such a thing.

 

It has now become a formal complaint.

 

Hope to get it sorted soon.

[johnnymitch]

Hi rakehell ,

 

If you've got the use of the account back now ..... then why not quickly open an account with another bank and start getting funds into it (you can honestly say that your Lloyds account is still operating , but you want to spread your funds around (diversify is always a good word !)..

 

That way they can't use 'right of set-off' to plunder your Income ..... then you can address the overdraft at your convenience .... not theirs .... while awaiting the outcome of your complaint ...