Claiming on a Business account? Lets join forces?

[banker_rhymes_with]

Hello Photoman!

 

PS: These companies are also taking valuable funding away from sites such as this, and so reducing the ability of this site to help lots of others.

 

Absolutely. Hopefully the Site Admin Team are kicking them off as soon as they are spotted. Not seen anything myself but, if anyone has, just alert a Moderator or Site Helper and let them know the CAG Handle/Name that was involved.

 

Cheers,

BRW

[banker_rhymes_with]

Hello Martin3030!

 

If anyone knows of any floating around please let us know

 

I'll see what I can dig out, as I never throw anything away, and file everything when it comes to bankers.

 

I think I should have Terms from mid 1990s onwards, so might just be a little too old.

 

Will let you know.

 

Cheers,

BRW

[banker_rhymes_with]

Hello Smudgerer!

 

I am in a bit of trouble with my bank lloyds tsb they are chasing me for £10,000.00 for loans that they forced me to take out to clear my overdraft etc

 

Business Overdraft or Private Overdraft, the one thing we must all realise is most of the banks have been in a headlong rush to push people from Overdrafts to Loans.

 

Why?

 

Because an Overdraft pops up as a Liability on their Balance Sheet, whereas a Loan pops up as an Asset.

 

When they go out onto the World Markets to beg/borrow/steal their way to being able to take on huge gambles, they need to show their banking mates that they are worth a large pile of number money.

 

A 10k Overdraft is a 10k dent in their plans.

 

If they can push the punter into a 10k Loan instead (and cancel the Overdraft), their plans are boosted by 20k.

 

That's because the 10k of Liability drops off, taking them to a zero, and then they add the 10k Loan as an Asset, taking them from zero to +10k.

 

If they do the same to many punters, they don't actually do any more lending, it's just a fiddle on the Keyboard and they end up significantly more valuable on their Balance Sheet.

 

That impresses their friends, and impresses the Shareholders.

 

It's sadly ironic that the Loan also earns them far more too! Not that they had that in mind either.

 

Meanwhile, for us punters, we get a perfectly usable Overdraft turned into a Ball and Chain Dead Weight Loan around our ankle that we have to drag around until it is paid off.

 

Hands up all those who have had Loans forced onto them when they would prefer to have kept their Overdraft?

 

Cheers,

BRW

[banker_rhymes_with]

Hello hsbcfiddled!

 

I think this Overdraft-to-Loan issue is quite possibly at the very heart of many Business bank Charges issues.

 

I know it's at the very heart of our problems with our soon to be ex-bank.

 

Looking back, I can now see that it has been a steady plan to get rid of all Overdrafts above 5k, and replace them with Loans instead.

 

The added benefit for the banks has been that they also get lots of bank charges too, because as they force the Customer from one to the other, they constrain Cash Flow so badly that bank Charges are almost inevitable, especially once a tiny Overdraft has been imposed once the Loan has been created and the numbers simply swapped around on the bank's Hard Drive.

 

Where it has all come unstuck, was they had not bargained on the banking mess that caused this Recession. Which is surprising, as they caused the mess in the first place! But then the banks never could see further into the future than anyone else can.

 

The banks just think they can see into the future. Indeed, they honestly believe they can, which is why they keep on gambling our money on what is going to happen in the future.

 

The £500 Billion bale out is all the evidence anyone needs to prove the banks have never had any idea what the future had in store.

 

In the build up to this Global Banking Mess, they've pushed their Customers around to big up their gambles on the World markets, and yet all of their gambles have failed.

 

Now they want money from the Government on the one hand, and from their Customers on the other. Although the Government can issue IOUs to cover anything it likes, us Customers are all now struggling with zero Cash Flow flexibility because we are all dragging around Ball and Chain Loans while at the same time being lumbered with a multitude of bank Charges because of the constrained Cash Flow. The double whammy is the Recession will constrain Cash Flow still further, but that will be our fault of course, not the banks.

 

Stepping back in time maybe 10 Years, had the bankers allowed us all to keep our Overdrafts, and had they not gambled all of our money away on their hair-brained schemes on the World Markets, I think we would all be in a much better position right now, them and us.

 

In a Debt Based Economy, money is scarce. That is a fact, and there is no getting away from the fact that almost all Businesses are short of cash. It's how the system works.

 

Virtually every established Business therefore needs finance, and the most obvious, simple and flexible form of finance has always been via Overdraft.

 

Only new Businesses need Loans. Once established, they'll need Overdrafts just like the rest of us.

 

Looking back through all of my Letters as I fight my ex-bank, I can see they have gone out of their way to Sell Loans. The excuses for doing so have all been aimed at some failing or other on our part, never theirs.

 

But, from hindsight, I can see we'd have been fine had they left us alone to work with the Overdrafts we were used to. Indeed, in our case, instead of fighting them now over alleged Debts of maybe 40k, I think instead we'd be sitting here Today with a Cash Surplus of maybe 28k.

 

That is the damage these idiot bankers have caused to my business, and I expect the same level of damage has been caused to many others.

 

Where has the money gone?

 

I'll tell you...what they haven't spent on themselves via absurd Salaries and Bonuses, they've simply lost on the World Markets.

 

Never forget that the banks don't create money, but they do create money as Debt...our Debt. The Billions they have accumulated, and lost, was created by our Debts. Debts they have manipulated into existence, just so they can spend this on themselves and gamble the rest away.

 

Now they want the Government to IOU them back into the black again, after which they'll soon turn on us to claw back the real money they feel we owe them. Once the Government has saved them, the banks will then turn on their Customers.

 

I think right now is likely to be the best time to pick a fight with your bank, because right now the banks are on the defensive with no friends anywhere. Their usual hidden support from Government pressure on the Judiciary is pretty absent at the moment but, in time, once they have got all warm and cosy with their politician friends again, they'll be asking for lots of favours again...and Judicial pressure will be top of their Wish List, closely followed by further watering down of the Consumer Credit Act and other Legislation that gets in their way.

 

Cheers,

BRW

[banker_rhymes_with]

Hello Folks!

 

I do think the issue of forced transfer of Overdrafts to Loans could well become as big an issue as bank Charges and mis-sold PPI.

 

No matter how tight their Loan Agreements, if they forced people into these loans without declaring their true motives and hidden conflict of interest, then the validity of the Loans must be questioned.

 

Especially if it can be shown that the Customer would've been far better off with the existing Overdraft.

 

Cheers,

BRW

[banker_rhymes_with]

Hello fedupwithbankpwm!

 

Barclays Tried To Force Me Into A Loan For 15k. When I Refused They Withdrew The Overdraft And Closed The Account And Defaulted Me.

 

That's exactly the Threat they use, even if they don't actually come out and say it.

 

That's why most of us ended up taking the Loans, as the alternative was clearly to have the Overdraft pulled and the Account Closed.

 

From hindsight, I'd have had a Parachute Account open and ready, and would've told my bank to go and shove their Loans. But I didn't know then what I know now and, good old hindsight is a wonderful old thing!

 

At least in my case, I made it clear in writing that I really, really, really did not want their nasty Loans.

 

I agree.

 

The loans are pretty much forced upon the account holder, and presented as if being by way of some form of helping out.

 

The reality is, by converting overdrafts into loans, the bank then has a securitised asset which it can use to borrow against cheaply from BoE or at interbank rates.

 

This bank borrowing is then used to finance other loans etc, and so realise yet more profit for them.

 

It often does not benefit the customer, as it frequently ties them into a repayment plan that is unrealistic, unmanageable and so ultimately headed towards defaults, with yet more charges and interest.

 

Exactly.

 

They got what they wanted, and they had no problem making sure they got what they wanted via a microscopically thin veiled Threat to pull the Overdraft and close the Account.

 

In the case of fedupwithbankpwm, it's clear the Threat was genuine, so it's not surprising so many people have reluctantly agreed to having their flexible Overdrafts turned into highly inflexible Loans.

 

There is also of course the issue of how those taking out these loans are pressured into taking out PPI with them (and paying interest upon that PPI premium added to the loan).

 

Plus the loans also often carry set up arrangement fees etc.

When all things are compared, even if the % rate on a loan is better than that on an O/D then the customer ends up paying more for the borrowing.

 

Also, we must not overlook the Working Cash Flow issues, because Payments into a Loan are lost forever, whereas identical Payments into an Overdraft result in an increase in Working Cash.

 

In my case, we've pushed over 30k into Loans we didn't want, and yet we still owe 50% of what we borrowed. To add insult to injury, we never got to enjoy any of the Cash Flow benefits of that 30k.

 

Had we kept an Overdraft, that 30k would've been recycled many times, and the profits from that activity would've pushed the Overdraft down...quite probably into Credit.

 

There is no doubt that turning an Overdraft into a Loan is no use for a Business, but it's both highly profitable and highly useful for a bank.

 

Cheers,

BRW

[banker_rhymes_with]

Hello TC!

 

We're just about to make a request under the Consumer Credit Act 1974 for a copy of the original agreement and original terms and conditions for the NatWest business account we discussed earlier. However I have just realised does the Consumer Credit Act cover business customers?

I think it will depend on the type and size of Business, i.e. if a Limited Company, then I would say probably not, almost certainly not I'd think.

 

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.

 

See The Consumer Credit Act 2006 when this was recently re-clarified:

 

Agreements regulated under the 1974 Act etc.

 

1 Definition of “individual”

 

In section 189(1) of the 1974 Act (definitions) for the definition of “individual” substitute—“‘individual’ includes—

 

(a) a partnership consisting of two or three persons not all of whom are bodies corporate; and

 

(b) an unincorporated body of persons which does not consist entirely of bodies corporate and is not a partnership;”.

 

Then it will depend on the usual issues if a bank account is covered by the CCA etc.

 

Hope this helps.

 

Cheers,

BRW

[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

[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