How to get round two signature requirement.

I am the treasurer of a local club. All cheques and other transactions require two signatures, mine and that of the secretary.
The secretary likes to purchase items for the club on ebay, and it was
agreed by the committee that the club open a Paypal account to pay for them. The worrying aspect is that the secretary was able to set up a direct debit with our bank in favour of Paypal online with no signature at all, let alone two.
The bank says they can do nothing to prevent this.
What is the legal position?
--
Alasdair.

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On 12/08/2011 14:57, Alasdair wrote:

Anyone using Paypal has only themselves to blame when things go tits up and they discover that Paypals 'buyer/seller guarantee is not worth a toss.
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wrote:

Don't you need access to statements to verify the account?
They should perhaps pay with their own paypal, and use the receipt they get to be reimbursed. That would be the most sensible thing to do.
--
http://www.voucherfreebies.co.uk

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On 12/08/2011 14:57, Alasdair wrote:

Presumably the DD was set up on-line? In order to be able to do that, the secretary must *already* be able to do on-line transactions without any involvement from you.
In order to get this level of on-line access, *all* authorised signatories (therefore including you) must have signed an application form to authorise this.
I am the treasurer of a choir. Cheques require two signatures (any two of Chairman, Secretary, Treasurer). *But*, having been authorised by the others, I can operate the account on-line - and make payments entirely on my own. Not wonderfully satisfactory, but I'm not sure how you would implement the equivalent of two signatures when making on-line transactions.
A better way for your club may have been for the secretary to use a personal credit card for PayPal, and then be reimbursed by cheque for any purchases retrospectively approved by the committee.
--
Cheers,
Roger
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Cancel the direct debit!
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Cancel online banking immediately, it defeats the system of protection. There is no reason to use online banking where proper accounts are used - a simple spreadsheet is sufficient.
Every business works fine by people incurring expenses and then claiming back on production of a genuine receipt. Credit Card provides protection for any single item >£100, PayPal provides some protection from 1p - subject to the funds being recoverable (PayPal should use a bonded system, but never mind). PayPal also provides a second line of online receipts which are unalterable, a useful audit trail.
If purchases are with common suppliers they may be willing to set up a credit account which is settled per invoice or per month etc.
As it stands the two signature system has been completely defeated. I understand why the buyer may want to use Ebay & PayPal for discounts or difficult to obtain items, but there is no reason not to use their own credit card or a prepay card. PayPal accounts can be subject to third party fraud, the two signature system has been defeated, cancel the online banking & paypal link.
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js.b1 wrote:

Most such accounts forbid business use, so, at some level of usage you will be violating the terms of the account. Transaction charges on business accounts are much higher!
I don't believe that HMRC particularly like money going through private accounts, and, if you do so, you must either have a formal dispensation, or include them on your tax return, even if expenditure and income balance.
An unincorporated club is still considered a business.
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wrote:

That depends entirely on how large the expenses are. There are some people who could not afford to use their own money to buy a few thousand pounds' worth of goods, even if they will be reimbursed with a cheque at the end of the month.
--
Cynic


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On Aug 12, 2:57 pm, Alasdair wrote:

Some banks have online accounts for businesses and clubs where one person can set up a transaction, but it won't be effected until a second signatory logs in and authorises it.
This is useful when making online payments by 'push' transfer but wouldn't help with Paypal which pulls money from the associated bank account.
Maybe you and the secretary could each have half of the Paypal password; if you can't be at the same computer when making a payment then one of you could type your half of the password in using remote access like TeamViewer.
Owain
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On 13/08/2011 18:36, Owain wrote:

Which ones? I'm fed up with with Lloyds-TSB who've just told me they lost our club's signatory information in 2009 "due to a software error". But they've been clearing our cheques all that time so there hardly seems any point in requiring signatures anyway.
They have now sent me what seems like enough paperwork to form a multinational corporation, with the club name mis-spelled on every page. It would probably be easier to change banks.
--
Reentrant

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