Bank refusing to make transfer; any recourse?

[Zuriel]

Our account provider cannot process cash or cheque deposits, so we can only accept payments by bank transfer. We've struggled to open an account with a traditional bank that offers full banking facilities as although we are a small UK business, we're a subsidiary of an international company.

We used the services of a debt collection agency and they were able to recover monies owed to us by a debtor (amounting to a low five-figure sum). The agency's bank is preventing the payment from being made by transfer, stating that their banking systems were/are "incompatible" with our account provider's (Santander to Revolut). The agency has claimed to have spent many hours attempting to resolve this, but the bank's view is not changing, so they can only offer a cheque (which we would be unable to deposit).

We haven't had any other problems accepting bank payments of larger sums from our regular customers and Revolut confirmed they are not aware of any issues, so I find the reason of 'incompatibility' dubious and implausible.

What are the possible options going forward?

 

[Argentum Tax]

I cannot see anywhere on Revolut's website where they say they are a bank. Maybe that's the problem? Are they technically just a money transfer service, or something similar?

 

[Mr D]

Open a bank account with a different bank.
Even if not to use as main account.

 

[Argentum Tax]

Open a bank account with a different bank.
Even if not to use as main account.

The OP says they are struggling to open an account with a traditional bank.

 

[Zuriel]

I cannot see anywhere on Revolut's website where they claim to be a bank. Maybe that's the problem? Are they technically just a money transfer service, or something similar?

They have a European banking licence (but not a UK licence yet), and they are authorised by the FCA under the Electronic Money Regulations 2011 for the issuing of electronic money.

 

[StevensOnln1]

From this page on Revolut's website it sounds like they aren't a bank, but your funds are held with an authorised bank. Perhaps Santander are seeing it as some sort of 3rd party account and won't allow a five figure sum to be transferred.

https://www.revolut.com/business/business-accounts-made-easy

 

[Darren_Ssc]

If your non-traditional bank can not accept cheque payments, is it feasible to go to another non-traditional bank that does?

I wouldn't trust revolut with 50p btw, but that's your decision.

 

[Mr D]

The OP says they are struggling to open an account with a traditional bank.

Does not mean unable.
They don't need full banking facilities, they do need some way to do what their current bank will not or what the other bank has problems with.

 

[Zuriel]

Does not mean unable.
They don't need full banking facilities, they do need some way to do what their current bank will not or what the other bank has problems with.

We've tried almost every available bank where eligibility criteria allowed, and I can only assume they all disliked our company's overall structure (foreign majority shareholders).

 

[Argentum Tax]

We've tried almost every available bank where eligibility criteria allowed, and I can only assume they all disliked our company's overall structure (foreign majority shareholders).

To me that means 'practically unable...'.

 

[Zuriel]

I'm just perplexed as whilst I can understand automated fraud checks, this a bank refusing a manually verified payment initiated by their own customer, and even seemingly outright lying by claiming a system incompatibility, which is surely a violation of PSD2?

 

[UK Contractor Accountant]

We've tried almost every available bank where eligibility criteria allowed, and I can only assume they all disliked our company's overall structure (foreign majority shareholders).

yes had this with a new client for us who set up a medical company with 2 foreign shareholders with the third UK resident. Struggled with opening a high street bank account but managed to get one opened in the end with Lloyds but only after a personal visit by the non resident directors/shareholders with ID documents.

 

[Zuriel]

yes had this with a new client for us who set up a medical company with 2 foreign shareholders with the third UK resident. Struggled with opening a high street bank account but managed to get one opened in the end with Lloyds but only after a personal visit by the non resident directors/shareholders with ID documents.

We did actually have an account with HSBC, but succumbed to closure from their (widely publicised) aggressive Safeguard checks and they still haven't transferred the closing balance. This was before I became responsible for the accounts. Revolut was the last resort to restart and maintain cashflow within the UK with our existing customers, and every customer has been able to pay into our new account (in some cases after manually verifying the initial payment).

 

[UK Contractor Accountant]

Have you tried a Challenger Bank - Starling?

They accept cheques posted to them.

 

[UK Contractor Accountant]

he agency's bank is preventing the payment from being made by transfer

is that via FPS?

What about BACS & CHAPS? might go through via this route if blocked using FPS

 

[Zuriel]

From this page on Revolut's website it sounds like they aren't a bank, but your funds are held with an authorised bank. Perhaps Santander are seeing it as some sort of 3rd party account and won't allow a five figure sum to be transferred

Apparently no transaction of any amount is possible. What's frustrating is that I'm not their customer, so I'm not privy to the details.

 

[Zuriel]

Have you tried a Challenger Bank - Starling?

They accept cheques posted to them.

We do not meet their eligibility criteria.

 

[anonuk]

We had some fraud on our Santander Company Debit Card a while back. The fraudster used our card details to top up a Revolut account. When we reported it to Santander we had never heard of Revolut but Santander had and the comment from the fraud team was that they had a number of fraudulent cases involving Revolut.

So, your issue is possibly that Santander May have simply blacklisted Revolut due to the number of fraud cases where the fraudsters have used Revolut so Santander likely won’t transfer any money to Revolut period (purely speculation of course).

 

[anonuk]

Just a follow up, it does appear that Santander are just point blank refusing to deal with Revolut. Just found this on Reddit...

This relates to a business transaction. Revolut (via support chat) confirmed they aren't aware of any problems, however Santander (Corporate and Commerical) confirmed they will not send or receive any funds to or from Revolut, and the representative confirmed it wasn't just isolated to my particular transaction, but their systems didn't tell her why.

 

[fisicx]

Just done a bit of googling and fraud seems to be a popular Revolut activity.

 

[Argentum Tax]

Just done a bit of googling and fraud seems to be a popular Revolut activity.

There is a lot out there about Revolut.

 

[The Byre]

Our account provider cannot process cash or cheque deposits, so we can only accept payments by bank transfer. We've struggled to open an account with a traditional bank that offers full banking facilities as although we are a small UK business, we're a subsidiary of an international company.

The obvious answer is to take payment at the parent company.

Remember that when it comes to banking in the UK, you are in a Third World country. The large High Street banks do their level best to keep things exactly as if we were still in the Victorian era. If they had their way, we would still be entering transactions in a horizontal, balanced, double-entry ledger using a quill pen and cheques would take two months to clear.

I remember ordering a large piece of equipment from a Manchester manufacturer which took three months to build. I paid the deposit and got the call that the thing was ready several weeks later. I wanted to pay the balance of about £30k to the company and toddled off to the local RBS to transfer £30k from my RBS account to the manufacturer's RBS account.

"That will take about ten days." they told me.
"You'll do it today." I told them.
"Then we must charge you £20 for a Lightning Transfer."

I told them that I had never heard so much nonsense in all my life. After a long and protracted argument, they agreed to do it for nothing and straight away.

To cut a long story short, £20 was missing at the other end - I threatened filing a criminal report with the Police for out-and-out theft. They gave back the £20.

If I transfer money from our Luxembourg account to our German account we are charged nothing and it happens in all cases instantly - as in milliseconds. Here? Oh Boy! We had some work done to a building and there was a small sum of £3k to pay and it took ten days for the money to arrive! The bank gave some cock-and-bull story about the prevention of money laundering.

The grasping, rasping, covetous belligerence of the main UK banks towards their own customers is truly wondrous to behold!

 

[Zuriel]

The obvious answer is to take payment at the parent company.

We did suggest that in the first instance, but understandably the agency can only pay the UK registered company to whom the money is legally owed.

 

[Zuriel]

Just a follow up, it does appear that Santander are just point blank refusing to deal with Revolut. Just found this on Reddit...

Interesting, so a financial institution cannot legally block transfers to and from another institution within SEPA unless there are restrictions put in place that are approved by the European Central Bank. Santander is potentially violating the PSD2 and jeopardising their banking licences across the EEA?

Fintechs do seem to be a hotbed for fraud (Monzo freezes accounts at an alarming rate), but that doesn't permit a regulated institution from simply refusing all transactions to/from another licensed and regulated institution.

 

[Paul Kelly ICHYB]

What did Revolut say when you spoke to them?

 

[fisicx]

Interesting, so a financial institution cannot legally block transfers to and from another institution within SEPA unless there are restrictions put in place that are approved by the European Central Bank. Santander is potentially violating the PSD2 and jeopardising their banking licences across the EEA?.

They are doing this because they consider the risk of fraud to be too high. They will not have this without a lot of legal guidance.

 

[The Byre]

the agency can only pay the UK registered company to whom the money is legally owed.

They can pay whomsoever they want to pay. You hired them, so the decision about payment methods is up to you.

 

[gpietersz]

@The Byre really? Small sums go through almost instantly for me.

The slowest payments I get are those in the US (to my Transferwise account).

I actually believe the banks do have an issue with money laundering laws. Its also why British banks (and other financial services like stockbrokers) are very reluctant to open accounts for overseas customers. They would like the business, but compliance is very expensive here.

 

[Zuriel]

What did Revolut say when you spoke to them?

Revolut are not declining the transaction and are not aware of any problems receiving money from Santander.

 

[Zuriel]

They can pay whomsoever they want to pay. You hired them, so the decision about payment methods is up to you.

The agency has stated they cannot pay our parent company. We want to be paid via bank transfer (any form of it), but Santander are refusing.

 

[Zuriel]

They are doing this because they consider the risk of fraud to be too high. They will not have this without a lot of legal guidance.

I can understand automated fraud checks blocking transactions, but I’m surprised a bank can repeatedly refuse (and lie about) a payment that’s been initiated by their own customer, after it has been verified. This isn’t a random phishing attempt or money laundering; it is money recovered from a debtor (through the small claims court) that the agency wants to pay to us, but is unable to from their own bank.

 

[The Byre]

@The Byre really? Small sums go through almost instantly for me.

I must admit that they have improved since the RBS tried to tealeaf £20 off me.

The slowest payments I get are those in the US (to my Transferwise account).

But the real way to move money between countries is to NOT move money between countries, but to shove it onto an account in country A and then pay out from your account in country B.

Sometimes we do get an imbalance with more money in Germany than in the UK, so I just either order stuff from Germany or do a bulk payment via Luxembourg where the fees are lower. So it's €-2-€ account to Luxembourg and then convert to $ or £ and then transfer to the UK or the US.

The agency has stated they cannot pay our parent company.

Do they say why? These are after all 'Bringschulden' (whatever that is in English) i.e. it's their job to pay you, not your job to go and collect.

On reflection, it is probably for them a matter of contract law, they were commissioned by your UK company, so they must pay the UK company to comply with the contract. What I do not understand is why you cannot get a regular UK account. The one and only person who deals with our Santander business account is not a UK national, but German and they were very happy to deal with us.

 

[gpietersz]

But the real way to move money between countries is to NOT move money between countries, but to shove it onto an account in country A and then pay out from your account in country B.

I am talking about the US part of the transfer: once its in my Transsferwise USD account converting it to GBP is almost instant, is is transfering it to my business current account.

The one and only person who deals with our Santander business account is not a UK national, but German and they were very happy to deal with us.

German, but resident where?

I have come across this problem myself and know that a lot of other people have too.

 

[Newchodge]

The agency has stated they cannot pay our parent company. We want to be paid via bank transfer (any form of it), but Santander are refusing.

If the client (the UK company) formally instructs the debtor (who has your money) to pay it to a third party (parent company), why can they not do that?

Incidentally I would disbelieve Resolut's denial of an issue, rather than Santander!