My personal bank (Cater Allen) has refused to open an account for my
business because there is a charge registered in my favour, from 1991.
This was registered when the company was set up, as standard practice.
However the company has not had any loans for many years.
No other bank I have used has had this problem before; I've opened
various Ltd Co current accounts (no borrowing facilities) without
problems and all had a similar charge on them.
I told everyone I have spoken to at their call centre that this is
daft because since they will bounce a cheque if I overdraw by one
penny they don't have any exposure. And a charge is meaningful only if
the chargeholder is owed money. They agree with me but say it's a
policy and nobody at the call centre can change it.
Has anybody else come across this?
I am moving my banking elsewhere, which is a shame because CA are
quite good, with polite call centre people and no waiting on the
I am surprised they have refused to open an account, but that is their
OTOH I would not be the least surprised if they refused you an overdraft,
because in the event of a shortfall you would get paid before them.
It is a good idea to have a long-ago-lodged 1st charge on your own
company, in your favour. That way, if anybody wants to sue it and push
it into liquidation, they are unlikely to get much out of it because
all you have to do is vote yourself a big salary and you will be the
first in line for any assets :)
I can't see why I should remove the charge just to open a stupid
current account. I have opened several current accounts for similar
companies (with a charge) and no other bank had a problem with the
On Sat, 23 Jan 2010 10:46:57 +0000, email@example.com wrote:
Maybe they don't like the way you do business. They may see this as
indicative of your attitude to suppliers generally. This isn't a
criticism of you but this might be the reason for the bank's general
Cater Allen, if it still exists as an independent company rather than
as a subsidiary of Santander, is a tin-pot little Manx bank for people
who would rather pay the tax man as little as possible.
Culex -- the Infamous Culex
I'd like to know how you arrived at that astonishing insight.
I have had a perfectly well conducted personal current account with
that bank for some years. No problems until now.
As regards my business, that has also been conducted in an exemplary
fashion for about 20 years. No loans, no debts, trade creditors paid
on 30 day terms.
I'd like to know what EXPOSURE a bank has by running a non-overdraft
account for a company which has a registered charge on it. Any offers?
On Wed, 27 Jan 2010 16:14:39 +0000, firstname.lastname@example.org wrote:
You said: "It is a good idea to have a long-ago-lodged 1st charge on
your own company, in your favour. That way, if anybody wants to sue it
and push it into liquidation, they are unlikely to get much out of it
because all you have to do is vote yourself a big salary and you will
be the first in line for any assets"
To my mind that attitude stinks.
It's not a question of simply suing the company - it would apply to
It's not "astonishing insight" - it's basic common sense. Good luck
with your quest for a bank account. I certainly wouldn't want to do
business with you either.
I don't think you have ever run a manufacturing business. Are you an
There is an old concept which already limits personal liability. It is
called a Limited Company :)
The problem is that most small businesses are not some huge entity
with hundreds of employees; they are the proprietor's livelihood, and
have limited resources.
And business generally has a significant % of bullies in it, who
threaten litigation in the hope of getting some kind of concession.
The bully will always win because the target company doesn't have the
resources to defend itself - even at the initial cost of a half decent
commercial lawyer at £250/hr plus VAT. A charge as described helps to
discourage that kind of behaviour.
Obviously one hopes to never have to do this. It's no different to
credibly threatening to sue a cowboy builder; I have just yesterday
managed to get one such cowboy to cave in, after fobbing me off for 2
years. It took a surveyor's report detaining the bodges to do this. He
waited till the last minute. Again, you hope to never actually sue...
On the contrary - you pay off all creditors, otherwise one of them
will get a CCJ and bang goes your livehood. The charge merely
discourages some frivolous attack. It would never actually get invoked
because doing so will also terminate the business.
You won't have to :)
But tell me this... you would not do business with a company which has
a charge registered in favour of a BANK which has lent the company say
six figures? You better get real because that will rule out the
majority of companies in the UK. It's virtually impossible for a
"small" company to borrow money without landing itself with a fixed
and floating 1st charge in the lender's favour, and the lender WILL be
pretty quick to pull the plug on the company if they get cold feet.
And they do this all the time.
But I am still looking for a rational explanation as to why a bank
should care. They have no liability that I can see.
It's quite simple, really. The majority of their customers will,
as you yourself said, arrange and use overdraft facilities. By
insisting as a matter of policy that their clients not have any
prior charges, it reduces their risk of not being able to get
back money they lend them.
Although your business may not require overdraft facilities, at
least not at this time, that puts you in an insignificant minority,
and they just can't be bothered to administer policy exceptions
for rare cases.
It seems quite reasonable to be unreasonable when it's easier
than being reasonable. :-)
Fully understood - except this bank told me they dont offer overdrafts
or any kind of borrowing, corporate or personal.
If they did, I would understand their problem.
I cannot see how one could create a liability, other than through
fraud and then a charge is hardly relevant.
Obviously I can make my point better than you. If that's the extent of
your understanding I would try something which doesn't need
Most sensible people would understand that if somebody is making a
frivolous claim then they don't need to spend money on lawyers to show
that the claim is frivolous. If the claim is genuinely frivolous they
would get their legal expenses back anyway.I know somebody who has a
lowly paid administrative job and she's spend £6k on a claim that she
should win. If she can afford it than a guy who "runs a manufacturing
business" shouldn't have any problem.
Well, as I am sure 1 or 2 here will be pleased to hear, the bank had
the last laugh - or so they think. They must have been reading this
thread, because they have just terminated both of my two accounts :)
The accounts had been conducted perfectly for the whole time (maybe 5
years) so it must have been triggered by this situation.
I was on the way out anyway due to various annoying things e.g. their
"deferred" Visa debit card is not recognised by a number of
establishments so e.g. I could not use it to fund my online dealing
account (and their "computer says no" setup meant they showed zero
interest in getting their IT dept involved), so I had other accounts
set up already.
The signatory of the termination letters is not contactable,
apparently, and they don't have to give a reason.
I guess they do what quite a lot of big firms do and pay somebody to
monitor the internet for unfavourable publicity. I found one satellite
telecomms firm doing that recently; their customer service was total
crap but they were organised enough to find an obscure post in Usenet,
and they asked me to remove it. I didn't because it was 100% true, was
a very neutral question on whether anybody else had the same issues,
and because it was expiring anyway after 5 days. If only these people
put the same resources into intelligent customer service.
And as a postscript, the funniest thing happened... a week or two
after the bank terminated my two accounts with them, and would not
discuss why, I got a very pretty package from them saying my account
has been UPGRADED to "Platinum", enclosing a fancy brochure showing
well dressed women stepping out of private jets.
Good to know their "Customer Service" is coordinated ;)
It gets better....
Today I got another big fat package from Cater Allen, with expensive
glossy booklets etc, saying my new account is open and ready for use.
This is after they apologised to me for opening the last "Platinum"
account, after they kicked me out altogether without giving a reason
Amazing how one business, which cannot be all that big, can be so
One of the signatories cannot even spell his job title
Still, they are owned by Santander......
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