Claiming on a Business account? Lets join forces?

[gandolfi]

But if a Sole Trader or a Partnership of 3 or less people (2 people being the effective minimum as you can't have a Partnership with less than 2, or you end up with a Sole Trader!), both Trading Styles are still classed as Consumers.

 

 

Hi BRW

 

I am a sole trader. Does this mean that I am covered by UTCCR the same as a personal 'consumer'?

 

It would be great to get a definitive answer on this, as it would affect the relevance of the OFT to sole trader business claims.

 

Many thanks,

Gandolfi

[TheyrCriminals]

Hi Banker ryhmes with,

 

Thanks very much for that, very helpful.

 

TheyrCriminals

[olympic1805]

Hi, just about to start my claim with Lloyds TSB Business Account, and wondering if anyone can send me the template letters for a Business Acct, i know they are worded slightly different, but cannot seem to find them.

Also has anyone had any luck with their business accounts, and is it worth starting yet ??

Thanks very much

[banker_rhymes_with]

Hello Gandolfi!

 

I am a sole trader. Does this mean that I am covered by UTCCR the same as a personal 'consumer'?

 

It would be great to get a definitive answer on this, as it would affect the relevance of the OFT to sole trader business claims.

I regret there is no firm answer on this, but I do feel the boundaries are very blurred between Business and Private bank accounts when the person or people are also classed as Consumers.

 

It's an area that has not yet been given enough attention, but I stress it is one that is only going to potentially help Sole Traders and Small Partnerships (3 people max), it won't help anyone whose business is a Limited Company, even if they are the sole Director.

 

Sorry this is no direct help, but I do think you need to investigate this and when you deal with your bank, keep ramming the point home that you are a Sole Trader, and so classed as a Consumer.

 

If you have also run the account like a semi Private account, i.e. paying for the odd private expenditure and booked out as Drawings, then you can show it cannot be considered to be a wholly Business account. If you also had, say, a Private account with them too, take a good look at the way you ran both, in terms of funds hopping to/fro the two.

 

If you are like many Sole Traders, I would think funds went both ways, and the Business account would've been used for things other than just straight business expenditure. Nothing wrong with that at all, as Sole Traders/Small Partnerships can Draw money out, and inject Cash in, as they feel like it...there's no law against it, only requirement is that the Business Tax Accounts must show the flow of funds out and in correctly, i.e. Drawings (money out) and Cash Injections (money in).

 

Quick example for those who may need to know more...

 

If you went to the Cinema and paid for that and some hot dogs with your Business Debit Card, call it £25.00, that is fine. In your Accounts you just mark that as £25 Drawings, and your Business bank account goes down by £25. All above board, Tax Man is happy, VAT Man is happy, bank can't moan either.

 

If you sell, say, your Mountain Bike because you cannot now fit into those spandex shorts, the money form that Sale is Private Funds, call it, say, £200. If you deposit that into your Business bank account, then because the funds are not Business Income, you just log that in your Business Accounts as a Cash Injection. Again, Tax Man, VAT Man and bank can't complain.

 

Quick Background Cash Update: if the Tax/VAT people want to know where the above £200 Cash came from, show them the eBay Sale or Newspaper Advertisement and make sure you get the Buyer's name and details. Sole Traders/Small Partnership home book keeping and Private bank accounts should always be regarded as an extension of Business Tax Accounts, that's if you want to avoid hassles with Tax/VAT peope! If Cash is ever involved that gets injected into the Business, always make sure you can show exactly where that Cash came from...otherwise they will start guessing you are doing something behind the scenes. If they suspect that, then they will start making up numbers for you so they can charge more Tax/VAT! I therefore keep as detailed home books as I do business, so I can always prove there is nothing else for them to get excited about.

 

The point being that as a Sole Trader, funds can hop in and out of a Business bank account willy nilly, and there is hardly any difference between how you run a Business bank account in comparison to a Private bank account.

 

With this in mind, my advice to any Sole Traders and Small Partnerships is to dump Business bank accounts totally, and just use Private ones. Charges are usually a lot less, and it avoids a lot of the Business Charges issues we are now faced with!

 

Cheers,

BRW

Edited April 28, 2009 by banker_rhymes_with
Cash Update

[tifo]

I am a sole trader. Does this mean that I am covered by UTCCR the same as a personal 'consumer'?

 

It would be great to get a definitive answer on this, as it would affect the relevance of the OFT to sole trader business claims.

 

Hi,

 

I think sole traders still count as 'private' individuals because it is the person trading as, i.e. Mr A Businessman trading as A Business.

 

I have had charges refunded on a few business accounts. Some were via the FOS and some direct from the bank.

[MARTIN3030]

Although there ARE definitions that say under the consumer act you are a consumer-under the criteria that we wanted to rely on to make claims previously it excludes business.

Therefore we are looking at other areas.

If it were so clear cut and easy-you would see the reclaim sites and others advertising this point.The fact is they aint.

If you are a business claimant now,then you are just going to have to be patient-we have not yet got anything that can be set in stone-lots of work is going on behind the scenes,this is slow and testing.

If anyone tells you that its easy,then ask them to tell you what it is.

I have a more than vested interest here since my own claim relies on working something that can stand up.

The hardest part of all is going before a Judge to dispel the judgements made in the Oft case.

Barclays in particular are relying on these judgements full stop-some Judges will ultimately go with that.

Others however will want to look at the arguements-it is those we are working on.

[HONESTKNOB]

I'm thinking of doing a small claim on a sole trader account. I remember last year business claims were not affected by the stays and had to be dealt with, is this still the case?

[MARTIN3030]

Who is your claim with ?

Its unlikely your bank will seek any the stay to be imposed,since they are now keen to get business claims struck out relying on the Smith judgements under Common law.

Thats not to say that the Court will not automatically stay it.

[HONESTKNOB]

I was thinking of using the Ombudsman. Do you know their current stance on business claims?

[MARTIN3030]

They are not intervening with business claims,unless you ask them to take it up under the waiver agreement for hardship.

That would only be after you had got a final response from your bank telling you they were not going to settle,and of course after you providing your bank proof of financial hardship.

 

I asked the FOS about this fairly recently,and it seems there are no immediate plans in place to address the fairness of business charges.

 

Since the appeal is only going to focus on those issues and judgements which related to current accounts as were handed down - there is no expectation of any decisions arising from the appeal which will deal with Business accounts.

 

Which bank is it in your case ?

[HONESTKNOB]

It's Natwest Martin. So if I submitted it to the Ombudsman they'd just refuse to deal with it and send it back to me?

[MARTIN3030]

Yes afraid so unless as I said it was under hardship.

What years does your charges fall ?

There is scope to claim if your charges fell under their older terms and conditions 2002 or beyond.

Failing that you will need to await the results of getting something put together (work remains ongoing).

[HONESTKNOB]

Ok, thanks for your help. It's the last 6 years I was claiming. I'll just start work on it and wait for it to get stayed with my personal claim.

Thanks again

[MARTIN3030]

Heres part of a response I got from the FOS-so while they HAVE looked at some cases,they have not made any decisions.

 

"As you know, the Financial Ombudsman Service looks into individual complaints referred to us by consumers or small businesses. We have received some cases about charges that have been applied to business bank accounts - but have not yet issued a final decision on a case. Many of the cases we see involve a number of strands of complaint, rather than solely turning on the point relating to charges."

[TheyrCriminals]

Hi Martin,

 

Can you please tell me legally how long the bank has to supply the information from a request under the Consumer Credit Acr 1974 for the original agreement/terms and conditions, and if the bank doesn't supply the information within the requested time what you can do about it.

 

Thanks,

 

TheyrCriminals

[MARTIN3030]

I think it would depend on what you are relying on when you make the request.If the request is made to determine the enforceability or unenforceability of an agreement (as the case may be) then as you are aware its 12 days plus 2.

 

If your request is being made because you want them to use as evidence/or you need them to help you determine as to whether you have cause to to use them in evidence,then there are 2 routes to use if they fail to provide them.If you are just making a formal request outside the Consumer Credit act then

theres the 8 weeks timeframe to exhaust before making a complaint to the FOS,I would cite breach of the banking codes,in failing to properly deal with your request.

Alternatively theres the court route in filing an application for an order that forces their disclosure.

Or the other one is under CPR.

[TheyrCriminals]

Hi Martin,

 

Is that 12 days plus 2 from the date of the letter or date they receive the letter.

 

Thanks,

 

TheyrCriminals

[banker_rhymes_with]

Hello TC!

 

Is that 12 days plus 2 from the date of the letter or date they receive the letter.

 

If you mean a CCA request, then it's 12 Working Days starting from the Working Day after they receive the request.

 

The +2 is not written down, but is to allow for postage (1st Class is +2 Working Days from Posting for example). Always use Special Delivery so that you can prove when your request was delivered...then start counting from that.

 

Keep Envelopes, as banks do have a habit of trying to bend the time by, say, back-dating the Letter and posting late. That little game is rumbled if the Envelope has any form of date mark on it.

 

Cheers,

BRW

[Ibsys]

Hi Martin,

 

Can you please tell me legally how long the bank has to supply the information from a request under the Consumer Credit Acr 1974 for the original agreement/terms and conditions, and if the bank doesn't supply the information within the requested time what you can do about it.

 

Thanks,

 

TheyrCriminals

When you ask the lender for a copy of the CCA 1974 agreement say you are issuing a notice under section 77 of the Act. This means they have to also give a full financial statement and ALL documents in connection with the agreement. AS BELOW;

77.—(1) The creditor under a regulated agreement for fixed sum credit, within the

prescribed period after receiving a request in writing to that effect from the debtor and

payment of a fee of 15 new pence, shall give the debtor a copy of the executed

agreement (if any) and of any other document referred to in it, together with a

statement signed by or on behalf of the creditor showing, according to the information

to which it is practicable for him to refer,—

(a) the total sum paid under the agreement by the debtor;

(b) the total sum which has become payable under the agreement by the debtor but

remains unpaid, and the various amounts comprised in that total sum, with the

date when each became due: and

© the total sum which is to became payable under the agreement by the debtor,

and the various amounts comprised in that total sum, with the date, or mode of

determining the date, when each becomes due.

Elsewhere in the CCA 1974 it states that the agreement must be signed by both parties. Look up a judgement by Lord Justice Clarke 2002 in which he said "failure by the lender to properly administer the agreement means the agreement is void and unenforceable and the lender can have no restitution or further claim"

[MARTIN3030]

Indeed.Good reference.

[steven4064]

For clarification - failure of the lender to sign the agreement renders it not properly executed. It does not in itself render the agreement unenforceable.

 

If the agreement has the debtor's signature and the prescribed terms in the same document, then it is enforceable, whether or not it is properly executed.

[Ibsys]

What it should read is " failure by the lender to observe fully the terms of the CCA 1974 could render the agreement unenforceable with no claim for restitution" which was in a judgement by Lord Justice Clarke. There are more issues than just the signature. It is a strict Act and with many sections which have to be complied with. 83% of agreements are unenforceable for loans taken out before April 2007

[steven4064]

THe post was answering a specific question about signature by the lender. To be properly executed, an agreement must comply with all the requirements of schedule 1 of the Consumer Credit (Agreements) Regulations 1983. To be enforceable, it must comply with the musch smaller number of requirements in schedule 6.

 

83% of agreements are unenforceable for loans taken out before April 2007

That remains to be seen. The 'test case' mooted recently, will say exactly how many are unenforceable. My feeling is that there are going to be a lot of disappointed punters of CMCs.

[Ibsys]

Section 77 says the lender should provide a copy of the agreement and provide calculations of payments, dates when they fall due and numerous other things. If not provides within 30 days the lender has commited an offence.

[MARTIN3030]

Its actually 1 calender month.The criminal offence was removed on the last ammendments.