Propertymark has responded to the formal consultation schemes being imposed by a string of local...
Share to Friend
Shocking figures have emerged regarding the long-running problems caused by banks demanding that agencies have a designated client account for each landlord customer.
Since 2019 many banks have contacted letting agencies, saying their undesignated client accounts would have to be closed. The agents are typically faced with replacing the accounts with individual designated ones - time-consuming and laden with red tape - or shifting their business to banks not requiring designated accounts.
The banks’ crackdown has come after the requirement that any lettings or management business handling clients’ money must be part of an approved Client Money Protection scheme in order to operate, and tightening up of Anti-Money Laundering regulations.
Advertisement
Now research by PropTech company Calmony has discovered the scale of the problem and the inconsistencies and costs suffered by agents.
It has canvassed the experiences of 170 agencies and found that no fewer than 72 per cent had suffered direct problems on this issue with banks, or were at the least very concerned about the prospect of the problems arising.
In addition, many banks were giving agencies only two months’ notice of undesignated account closures - and in many cases taking the opportunity to charge agencies for the opening of designated accounts.
Calmony chief executive Glynn Trott, in a video interview with Lee Dahill of Angels Media, says one agent with 101 designated accounts is facing an annual bill of up to £27,000 from its bank.
There are many more revelations about the scale of the problem in the video interview, exclusively for Letting Agent Today readers. You can see the video below.
This has turned out to be an absolute nonsense!
We run a single, dedicated Client account for our landlords and individual dedicated Client accounts for our managed site (in the names of their Man Co's).
Barclays notified us of closure of accounts (many 10s of accounts).
We contacted our local Business Manager and he appealed it with a higher level and had a teleconference.
It appeared (to me) that the bank did not understand our industry operate our client transactions.
We are both Client Money Protected and Property Ombudsman members (which most acredited schemes defer to as a last resolution), for 8 years now.
No, we were told we had to join a scheme to avoid the account closures.
We have chosen ARMA and the form filling, copy documents, references, 3rd party involvement; however, we are almost there.
We have had a Non- designated client account for 50 years with one high street bank. We applied for a new non-designated account under a new mandate. We are RICS, (Fellow) DPB, ARLA (Fellow) , NAEA have TDS, CMP and have been registered with AML since forever ( registered with TSO before HMRC took over AML). We have comprehensive AML policy, GDPR policy and provide regular training to all staff. We use a 3rd party to provide AML so not subjective to us. We are a one office independent agent. We do not by law require AMP for Lettings as no rental that are over 10,000euros per month - we were turned down because our AML policy is not robust enough! BUT the Bank can't tell you exactly why it was not robust enough as they don't want to "influence" your policy!! Our relationship manager was embarrassed and said that there was nothing he could do! Absolutely crazy - been a client for 50 years - counted for nothing, Not sure what I am supposed to do to make my policy more robust! Just keeping my head down now as was concerned that following that they would withdraw our existing account!
Have absolutely no trust for any bank now! They are simply an organisation that we have to deal with but have absolutely no respect for any of them.
The level of frustration in the industry is completely understandable. Check out Calmony for a ring-fenced client account that is specifically designed for agents.
%20-%20IMAGE%20Client%20Accounting%20%E2%80%93%20what%20are%20your%20options.jpg)
%20(002).png)
.png)
.png)
%20(002).jpg)
Join the conversation
Jump to latest comment and add your reply
This has turned out to be an absolute nonsense!
We run a single, dedicated Client account for our landlords and individual dedicated Client accounts for our managed site (in the names of their Man Co's).
Barclays notified us of closure of accounts (many 10s of accounts).
We contacted our local Business Manager and he appealed it with a higher level and had a teleconference.
It appeared (to me) that the bank did not understand our industry operate our client transactions.
We are both Client Money Protected and Property Ombudsman members (which most acredited schemes defer to as a last resolution), for 8 years now.
No, we were told we had to join a scheme to avoid the account closures.
We have chosen ARMA and the form filling, copy documents, references, 3rd party involvement; however, we are almost there.
Apologies for the poor grammar above. Written both with ire and diminishing batteries in the blue-tooth keyboard not helping matters!
We have had a Non- designated client account for 50 years with one high street bank. We applied for a new non-designated account under a new mandate. We are RICS, (Fellow) DPB, ARLA (Fellow) , NAEA have TDS, CMP and have been registered with AML since forever ( registered with TSO before HMRC took over AML). We have comprehensive AML policy, GDPR policy and provide regular training to all staff. We use a 3rd party to provide AML so not subjective to us. We are a one office independent agent. We do not by law require AMP for Lettings as no rental that are over 10,000euros per month - we were turned down because our AML policy is not robust enough! BUT the Bank can't tell you exactly why it was not robust enough as they don't want to "influence" your policy!! Our relationship manager was embarrassed and said that there was nothing he could do! Absolutely crazy - been a client for 50 years - counted for nothing, Not sure what I am supposed to do to make my policy more robust! Just keeping my head down now as was concerned that following that they would withdraw our existing account!
Have absolutely no trust for any bank now! They are simply an organisation that we have to deal with but have absolutely no respect for any of them.
The level of frustration in the industry is completely understandable. Check out Calmony for a ring-fenced client account that is specifically designed for agents.
Please login to comment