Surviving The British Banking System – For Credit File Challenged People

[ScabHunter]

INTRODUCTION

This is my thread aimed at helping people who are being thwarted by the High Street banks, even to the extent of being unable to obtain personal or business banking facilities. During the past two years, I have carried out extensive research into the British banking system, with the specific intention of helping those who are finding it extremely difficult to obtain the facilities they need.

There are several potential problems. Many people are unable to open even a Basic account to run their day to day life, and have to resort to so-called “services” such as Think Money or Eccount which charge huge monthly fees, along with fees for each transaction. Other people can get a Basic account, but have to choose one of the extremely poor ones due to a bad history with certain banks. They need a way to supplement these poor accounts to experience full functionality.

Even the people who are able to get one of the reasonably good Basic accounts are still unable to obtain a cheque book, which may be less of a problem now than it would have been in the past, but there are still times when cheques are needed.

There are also the people who need business banking facilities, so that they can set up their trading operation in the correct way, using a business name. Even though it makes no sense whatsoever for banks to deny business facilities to those who may then be able to earn money and pay back anything which is owed, they do this on a regular basis. Alternatives to the High Street denial machine are essential.

Finally, there are many people in need of financing to buy property, who are being unreasonably rejected due to minuscule difficulties with their credit file, often several years into the past. This entirely unwarranted overreaction to the sub-prime mortgage crisis has left thousands in need of a better solution.

This report is the culmination of over two years of research, during which time I have analysed over 30 pre-pay card products, over 50 building societies, and all of the 317 banks listed in the document released by the Financial Services Authority detailing all banks licensed to operate in Great Britain. I hope it helps someone negotiate the minefield which is the British banking system.

*** NOTE - This thread is my own personal creation, and the content therein may not represent the views of the management of All About Forums. As this is a forum thread, there is an opportunity for any AAD member to post their own opinions at the end, and any post can be edited and corrected if errors are found, or if information needs to be updated.

SH

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Re: Surviving The British Banking System – For Credit File Challenged People

1 What Do You Do If You Cannot Get A Bank Account?

Now, let us consider the first problem, which is that of someone who has no banking facilities whatsoever, and who may have applied for accounts with the High Street banks and been denied even a Basic account.

The reason that this occurs is because they are unable to pass through the automated identity verification system which the banks use as an expedient. What is needed, therefore, is something which will offer most of the same facilities as a basic bank account, but with a more relaxed approach to the verification of identity. This can be found in the many pre-paid debit cards which now exist to take advantage of this market, but it is important to be selective and to choose wisely.

Having analysed this market in great detail, the card I am going to recommend as the top choice is one known as Kalixa. It was first issued by an independent company known as Vincento Payment Solutions Ltd, which has now been rebranded as Kalixa Pay Ltd. This is important, because it means that it is independent of any banking group with which you may have a bad history.

The card does cost £7 to obtain, but that is a reasonable charge considering that the company has to cover the expenses of card issuance and still make a profit. If you run the account properly, there should be no further charges. You are charged for six months of inactivity on the card, but that should be ridiculously easy to avoid. There are charges for certain methods of loading the card, but there is no need to use them when there are free alternatives. You are also charged for a replacement card after three years, but not if there is a transaction made within the previous six months, so again that is easy to avoid.

For anyone who is finding it difficult to get even Basic banking facilities, the most important feature of the card is that it comes with a genuine sort code and account number, so that wages and benefits can be paid directly onto it. There is no charge for this, or for using the card to make payments. You can pay all of your household bills and do your household shopping by card, without any charges. The only time you will be charged is when you withdraw cash from a machine, so try to withdraw any cash you need at one and the same time.

So, why is the Kalixa card a good choice for anyone who is finding it difficult to open a bank account? Well, they are prepared to work with you if the electronic system produces an automatic decline. Whereas the High Street banks are effectively tied to the computer and will take its verdict as inviolable, Kalixa will allow you to send in documents to prove your identity. It may take more time, but you will eventually be able to get a Kalixa account opened. Once this happens, you will be able to receive wages or benefits, and be able to pay bills and shop using the card.

I have had my own Kalixa card for over a year now, and have used it extensively with no problems. I have used it for shopping in Tesco and Sainsbury's, for buying advance railway tickets, and for other online orders. I load it with cash through Barclays, and although it says the load can take up to five days it has always taken two in my case. I have even tested their customer service, and found it to be unusually responsive.

Kalixa Card

SH

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Re: Surviving The British Banking System – For Credit File Challenged People

2 An Alternative

The main alternative to the Kalixa card is the prepaid card offered by the cell phone provider, Orange. The one possible knock-out blow to this card needs to be revealed at the start, and that is that it is owned and run by a company called PrePay Technologies Ltd, which is a registered service provider of Barclays Bank PLC. Therefore, if you have a past bad history with Barclays, opening this account will involve risk. If you have a debt with Barclays which is lying dormant and for which you are not being chased, then it would be insanity to open this account. The Terms and Conditions specify that “This may involve providing your personal data to our partners, affiliates, agents, distributors, and suppliers including Orange, Barclays Bank PLC and to MasterCard International Incorporated and its affiliates”, and data shared with Barclays could have severe consequences.

With that out of the way, anyone with no bad history with Barclays will find the Orange Cash Card can offer similar benefits to Kalixa. There is a shorter period of time before the card expires, two years, and a shorter period of time in which to make a transaction before you get charged for a replacement, only eight weeks instead of six months. Other than these considerations, the Orange Cash Card is a reasonable alternative to Kalixa.

Orange Cash Card

Credit to fiscalfool for providing a real time trial of this card, while an undischarged bankrupt -

allaboutFORUMS - View Single Post - Well ....

SH

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Re: Surviving The British Banking System – For Credit File Challenged People

3 Why Would Anyone With A Bank Account Or Debit Card Pay Money To Get A Pre-Paid Card?

This is an important question. It is easy to understand why someone who cannot obtain a basic account facility with a bank would want to use a pre-paid card to receive their wages and be able to pay their bills. Why, however, would anyone who has, or can get, a bank account debit card, want to pay money to get a pre-paid card? There are at least two good reasons.

Firstly, anyone who only has one plastic card is taking a huge risk. I have personally had a railway booking site suddenly reject my main card, presumably because there is an undisclosed restriction on the number of tickets you can buy at one time. I have also had a major bank put a block on my card because I drew £10 out of a cash machine in Hunstanton! Even more seriously, I have seen a documented incident of someone having their card blocked for attempting to use it while overseas, leaving them stranded in a foreign country without a back up source of funds.

This problem can, of course, be overcome by having more than one bank account, and we will come to the ideal structure for personal banking later. The most important reason of all why everyone should have a pre-paid card is the increased security it gives to your online accounts. If you set up a debit card on PayPal or Amazon, and someone hacks your account, they can remove any funds to which the card is linked. If you set up a credit card, they can max it out and spend funds you don't even have.

By setting up a pre-paid card on Amazon and PayPal, you are reducing the potential loss to whatever is loaded onto the card at the time the account is hacked. Of course, in the case of PayPal, there is still the matter of the linked bank account to consider, but card risk will be reduced to the lowest level possible.

SH

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Re: Surviving The British Banking System – For Credit File Challenged People

4 Applying For Accounts In The Right Order

Although it is possible to run your entire banking life from an account such as Kalixa, it is not to be recommended as a long term strategy. You will get more flexibility from a Basic bank account with a High Street bank, and even though it means going into the lion's den, at least you will be doing so on your terms.

Applying for Kalixa or the Orange Cash Card first, however, gives you a significant advantage. Because of the way in which Kalixa uses electronic information to verify your identity, it allows you to know in advance whether or not there are any anomalies with that electronic data. If you are passed for a Kalixa card straight away, without having to send in documents, you will know that the electronic data will be in place to apply for a Basic bank account. If not, you will at least be able to avoid an automatic decline, and take steps to correct the erroneous data before applying. This is critically important for undischarged bankrupts, who now only have Barclays as a potential source of a High Street basic bank account.

SH

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Re: Surviving The British Banking System – For Credit File Challenged People

5 Basic Bank Accounts Reviewed

Once you have either been accepted for a Kalixa or Orange Cash Card, or have taken steps to correct any erroneous information which is held electronically, you will be in a position to apply for a basic bank account. While there may be personal reasons why one bank is more suitable than another, either because of location or opening hours, or because of bad history with one or more banks, it is worth taking an overview of the relative merits of each account.

GOOD BASIC BANK ACCOUNTS

Co-op Cashminder - Online Banking, Allows Direct Debit payments, comes with unrestricted debit card

Yorkshire Bank - Online Banking, Allows Direct Debit payments, comes with unrestricted debit card

Barclays - Online Banking, Allows Direct Debit payments, comes with unrestricted debit card - BUT - I have heard that some people have been refused a proper debit card, and only been given a card for the ATM machines. Be wary of Barclays, unless you are an undischarged bankrupt in which case there is no longer a choice.

HSBC - Online Banking, Allows Direct Debit payments, comes with unrestricted debit card. This used to be a poor account with no debit card, but is now supposed to come with one. As with Barclays, though, the bank seems to have discretion over whether or not you get the card, or just a poor imitation which can only be used to withdraw cash from machines.

ACCEPTABLE BASIC BANK ACCOUNTS

RBS - Online Banking, Allows Direct Debit payments, comes with restricted debit card which can only be used in RBS or NatWest ATM machines. As long as you have regular access to such a machine, this should be tolerable.

NatWest - Online Banking, Allows Direct Debit payments, comes with restricted debit card which can only be used in RBS or NatWest ATM machines. As long as you have regular access to such a machine, this should be tolerable.

Lloyds - Online Banking, Allows Direct Debit payments, comes with restricted debit card which can only be used in Lloyds, Bank of Scotland, or Halifax ATM machines, or at the Post Office. As long as you have regular access to such a machine, this should be tolerable.

Bank of Scotland - Online Banking, Allows Direct Debit payments, comes with restricted debit card which can only be used in Lloyds, Bank of Scotland, or Halifax ATM machines, or at the Post Office. As long as you have regular access to such a machine, this should be tolerable.

POOR BASIC BANK ACCOUNTS

Halifax - Online Banking, Allows Direct Debit payments, comes with Electron debit card (not accepted in as many places as a full Visa card), but customers are banned from paying in money at the counter, which is utterly senseless. This silliness, along with the poorer debit card, ruins what would have been one of the better basic accounts.

Santander - Online Banking, Allows Direct Debit payments, comes with NO debit card. If you are forced to use this account due to problems with other banks, a pre-paid card which can be linked through online banking is essential.

DREADFUL BASIC BANK ACCOUNTS

Nationwide - Online Banking, NO Direct Debit payments, comes with restricted debit card which cannot be used abroad. I thought the whole point of a basic account was to allow people to pay their bills? This is just a savings account which pays no interest!

Metro - Online Banking, NO Direct Debit payments, comes with restricted debit card. Only useful if you need the extended opening hours, or if you want to build up a history with this bank to one day qualify for their current account, but you will still need a proper account to get your bills paid!

It obviously makes sense to open the best basic account you can, although there other considerations to bear in mind. If you are aiming to upgrade to a full current account with a certain bank, for example because of location or opening hours, then it makes sense to open their basic account even though it may be a poor one. Have your income paid into it, even if you have to immediately transfer most of it to a better account to get bills paid. Banks have an internal scoring system, and a history of responsible money management will help you to get the upgrade you are seeking.

There are always ways to overcome the limitations of the poorer accounts, as can be seen from the next two sections.

SH

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Re: Surviving The British Banking System – For Credit File Challenged People

6 Overcoming The Limitations Of Poor Basic Accounts

It is obviously sensible to choose the best basic account which is available to you, but in cases where some banks are off limits due to bad history, it may be that you can only get facilities which do not provide a debit card. In this case, the Kalixa card becomes increasingly important. By being able to transfer money from the basic account to Kalixa using online banking, you are still able to use a plastic card to pay bills or shop online. It may take an extra step, but it is a workable solution for anyone who is forced to accept a basic account with no debit card.

Of course, there is no way to overcome the limitations of the Dreadful basic accounts, those which have no Direct Debit facilities, other than by paying bills in some other way. Those with a bad history with all of the banks that provide DD-compliant accounts will have no choice but to suffer this, at least until they get the saving account detailed below.

SH

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Re: Surviving The British Banking System – For Credit File Challenged People

7 Saving Bank Accounts – Bank Of Baroda

So, once you have the best basic account facility you can obtain set up, how do you go about attacking the problem of having no cheque book? The answer is to be found in the acquiring of the right savings account.

As an example, if you sign up for the Co-op Cashminder basic account, you will automatically be given a 'Smart Saver' savings account to go with it. This is fundamentally useless, as it will only come with a card for withdrawing cash. What if you could replace this useless savings account with one which issued a debit card, and a chequebook, and which did not use a credit scoring system?

This product can only be found at one of the 317 banks in Great Britain, and that is the Bank of Baroda. You will need to maintain a balance of £100 in the account at all times, but other than that consideration, there is no reason not to add this to your banking facilities and overcome the ridiculous limitation which the High Street banks seem determined to inflict upon us.

I have personally opened a Bank of Baroda saving bank account, and received a debit card and chequebook, despite being unable to open a proper bank account with any High Street bank. It is a superior product to anything those banks can offer, both in terms of the facilities which are offered, and the level of customer service which the bank provides.

It is probably not the best place to store large amounts of savings, say anything more than two or three hundred pounds. That is because the interest rate is only 0.5%. For an interest rate three times the size of this, you can try an online account offered by the Principality Building Society. This account gives you no facility beyond the ability to pay in and draw out money, but if you combine it with the Bank of Baroda account, you can achieve a high average rate of interest, along with a Visa Debit Card, a chequebook, and Direct Debit and standing order facilities.

Bank of Baroda Saving Account

Niddy's Thread For This Account

Principality Building Society e-Saver Issue 10

Credit to Niddy for the tip-off for Bank of Baroda, and to Mrs D for putting me on to the Principality.

SH

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Re: Surviving The British Banking System – For Credit File Challenged People

8 The Target Structure For Personal Banking

It is at this point that it is worth analysing exactly what our ultimate objective should be in dealing with these banking problems. This is the most effective facilitation of our financial transactions, with the highest possible degree of safety and security, and an effective back up plan which can be implemented quickly in the case of unforeseen change.

This is the structure which I believe we should be trying to attain, the structure which will allow those objectives to be most effectively implemented -

With this structure, it is possible to satisfy all of the needs of personal banking. Income can be paid into the main account, and bills can be paid by Direct Debits set up on it. Money can be transferred to the pre-paid card to be used in PayPal or Amazon, allowing those online accounts to be as secure as possible. If a bank account is needed for PayPal, it can be the back-up account into which no money is automatically paid.

Money can also be transferred into the saving account, allowing the possibility of cheques to be written whenever needed, and also allowing for interest to be earned, albeit at a low rate. (Note – If you have to use a Dreadful basic account in the main position, you will not be able to set up Direct Debits from it. This can only be worth doing when you want to achieve a current account with a certain bank at a later stage. If you have to do this, you can set up Direct Debit instructions on the Bank of Baroda account to make sure your bills still get paid.)

Finally, if a problem should occur with the main bank account, it will be possible to immediately switch the back-up account up into the main position, giving a fully working triumvirate. This will then give you time to source another basic account to move into the back-up position.

This structure is possible for anyone except an undischarged bankrupt, who will only be able to obtain a basic account from Barclays, or someone with difficulties proving their identity. The undischarged bankrupt will still be able to obtain all but a back-up bank account, and by opening an Orange Cash Card account as well as Kalixa, it will be possible to experience some of the benefits of a back-up system.

Those who cannot prove their identity will have to tolerate considerable restriction until the fault can be rectified, but it should still be possible to progress through the system bit by bit. Kalixa will work with you and allow you to prove your identity with the right paperwork, and it will then be relatively easy to progress to the other parts of the system. In some cases, it will be necessary to be patient and to allow a fraud marker to drop from the files of a reference agency, but even in these cases the goal can be achieved in relatively short order.

For the vast majority, it will be a relatively simple progression from the initial application for Kalixa or an equivalent pre-paid card, through High Street basic bank accounts, and on to the Saving account at Bank of Baroda. Once this has been accomplished, the individual will have overcome the inherent viciousness of the system, and obtained all of the facilities they need for optimum functionality.

SH

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Re: Surviving The British Banking System – For Credit File Challenged People

9 One Financial Group, One Product

Some Important Philosophy Which Could Save You A Lot Of Grief

I was lucky. During the time of my financial difficulties, which were all caused by a credit card provider refusing to honour its obligations under Section 75 of the Consumer Credit Act 1974, I had full use of a proper current account. This was entirely because the credit card provider and my bank were entirely separate entities. Had I been stupid enough to have taken a credit card out with my bank, I would have lost the account when the card went bad.

This is a vital example from which to learn - NEVER take out more than one financial product with any given group, because if one goes down, it will carry the others down with it. The more important your facilities are, the more important this consideration. If you have a basic bank account, and you were somehow able to take out a credit card with the same provider, you could always replace it with another one. If you took out a credit card with the Bank of Baroda, which is perfectly feasible after you have been a customer for some time, and it went bad, you would lose a vital account which is irreplaceable. Do NOT be tempted!

If you really must borrow money (?), then at least make sure that the borrowings are with an organisation which is completely separate from any that are important to you. If the loan goes bad, you credit file will still be ruined for six years, but there is a good chance that you will be able to keep your other facilities. In reality, you should simply never borrow money in any case, except for one exception which is covered in the final section.

Don't give business to utility companies which maliciously destroy credit files if you can possibly avoid it, and stay away from cell phone contracts. These are not covered by any consumer legislation, and are frequently the cause of unjustly damaged credit files. I would recommend using Giffgaff and paying as you go. I use this to connect to the internet whenever I am travelling, and have never had any problems.

SPECIAL NOTE FOR AAD MEMBERS

You may have noticed that there is a distinct difference between the philosophy expounded here, and that which Niddy expresses in his excellent threads on rebuilding your credit worthiness, which can be found here -

Sub-Prime Credit - allaboutFORUMS

How to get back onto the Credit Ladder - allaboutFORUMS

Niddy's threads are undoubtedly excellent works of practical instruction, and have the potential to achieve the purported goal for anyone who wants to go down that route. The philosophical question, though, is, should you follow them?

By next year, all of the defaults which have been on my credit file should have expired. I stress should, because there is no guarantee that debt collectors have not been malicious even beyond their legal entitlement. I have not checked my credit reports, and you absolutely should not do this if there is a possibility that unwanted attention could be drawn to your situation. I will have to decide, at that point, whether to follow Niddy's plan, or just carry on as I am.

I have to admit, I am very reluctant to go down the prescribed route. Even on this very forum, I have seen an instance of dispute arise with JD Williams due to them taking money by Direct Debit sooner than they should, and I have seen a thread where Vanquis made over ten nuisance telephone calls a day to someone with a registered disability. In my own case, the number of malicious calls by Capital One Bank exceeded even these numbers.

You wouldn't let scum who behave like this into your home, so why would you let them into your life? As a means to an end? Yes, possibly, but are the risks worth taking? Whatever you decide, be aware that every time you give your private information to known criminals who have no respect for the law, and even less for human beings, that you are taking a huge risk. Now that Section 127 subsections 3-5 of the Consumer Credit Act have been repealed, that risk is magnified. If there is no necessity for prescribed terms to be present, who or what is there to regulate the conduct of the lender or to protect consumers from falsely created balances? Absolutely none.

I can only think of one circumstance in which I would even consider going into the snake pit again, and that is if I wanted to obtain a mortgage in the future. As a lifelong solitary individual, it is extremely unlikely that I will ever want to do that. I have no wives or children to support, no living family, and no need for anything more grandiose than a one-bedroom flat. Ownership impairs mobility.

In the extremely unlikely event that I one day do not live alone, I would think about it. I would have to be prepared to let the goons suck my blood whether or not I genuinely owed the money, and that would go against everything I believe in. I would certainly keep my involvement to the minimum possible, but I would have to accept in that case that the potential rewards outweighed the inevitable risks.

Of course, your philosophy may be different. On Martin's Spongiform Encephalopathy site, there are people who apply for credit cards as though it was a collecting hobby. To them, the risk apparently means nothing, as it means nothing to those who partake in dangerous sports. I don't want to put anyone off the Niddy path if they are of this mind, but make sure you can face the consequences should everything blow up in your face once again.

SH

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Re: Surviving The British Banking System – For Credit File Challenged People

BUSINESS BANKING

10 Cash Plus Business Banking Facility

One of the most scandalous issues of all in the recent past has been the inability of people desiring to start their own business to get the banking facilities they need. You would think that even the High Street banks would have the intelligence to realise that if you help people to get into business and to start making money, they might just be able to pay back anything which is currently owed. If you prevent them from doing this, you won't get anything repaid. But, that is logic and common sense, and there is nothing further from the diseased circus of the High Street banks than logic and common sense.

Solutions are now possible to this problem, solutions which not only allow people to get into business without the need to undergo any credit scoring whatsoever, but which also allow them to obtain business banking facilities far more cheaply than they can be obtained in the High Street. Anyone who can prove their identity can now find a solution which will get them into business with the facilities they need, no matter what their intended structure may be.

The most important component in creating a business banking structure is a pre-paid card known as Cash Plus, which can be opened in a business name. Interestingly, Cash Plus also offer a personal pre-paid card, but it is not remotely competitive with Kalixa or the Orange Cash Card. The business product, however, has already won an award at the Card and Payment Awards, where it was the “Best business card programme” winner in 2012.

There is no credit scoring involved in opening this account, so as long as you can verify your identity you should have no difficulty in obtaining it. As with Kalixa and the Orange Cash Card, there may be occasions where you will need to send in documents to prove your identity, but once that is done you should have no difficulty.

For many people in business, the Cash Plus account will provide everything which is needed. You get a proper account with a full account number and sort code, into which deposits can be made by standing order, direct debit, bank transfer or cash. Payments can also be made using these methods, as well as by using the MasterCard which is issued in the business name. As it is a proper business account, you can add a machine which will allow you to take credit card payments, from another provider.

The account comes with an annual charge of £30, which is considerably less than the charges inflicted by the High Street banks, including the NatWest Foundation Account. It does have some limitations, such as the fact that you can only have up to £15,000 in the account, and the fact that you cannot issue or pay in cheques. These limitations can be overcome by adding other facilities to the Cash Plus account, in the same business name.

CashPlus Business Facility

SH

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Re: Surviving The British Banking System – For Credit File Challenged People

11 Taking Credit And Debit Card Payments

There is an increasing need for businesses to be able to accept payment using credit and debit cards, either in person, or with the customer not present. The largest company offering such facilities is Worldpay (UK) Limited (not to be confused with RBS Worldpay), usually known as Streamline. What is not so well known is that Worldpay also offers a service for small businesses which allows them to accept payments using a card reader and a cell phone.

You can use iPhone, Android or iPad devices, in conjunction with the card reader, to take payments anywhere, including over the telephone. The expense of setting up this facility is £60, plus the price of whichever cell phone or tablet you choose to use.

This system will allow you to get started in business taking card payments, and once your card based turnover is likely to exceed £25,000 in a year, you will be able to upgrade to full Streamline facilities.

It should also be mentioned that Kalixa is intending to introduce a similar service in the near future, so it may not be long before there is competition and an improved deal for customers. Even now, though, there is an option to take card payments without a huge initial outlay. As the Cash Plus account has a proper account number and sort code, and can be opened in the business name, it can be used as the recipient account for these card payments.

Take Card Payments On Your Cell Phone

SH

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Re: Surviving The British Banking System – For Credit File Challenged People

12 Expanded Business Banking Facility

The Cash Plus card account is without doubt the preferred vehicle for allowing sole traders, partnerships and limited companies to get into business, but it does come with some limitations. These can all be addressed and overcome by adding other facilities to the main account.

The first obvious difficulty which may occur is that the facility may be too small for a high turnover business, and the second is that the business will not be able to accept cheques. There are solutions which can allow you to overcome this, so let's start with the example of a business which has high turnover, but which does not need a facility to accept cheques.

The best solution in this case will be to add an Easy Access Savings Account from a bank called Aldermore. You will need to keep £1,000 in the account at all times to take advantage of the best available interest rate, but this should not be a problem for a high turnover business. You need to have a business account with a proper account number and sort code through which money can be transferred, and that is what Cash Plus gives you. You will also need to own a cellular telephone, as SMS message is the only method through which Aldermore is prepared to issue the electronic access password.

If you accept a slightly lower AER on your investment, 1.05% instead of 1.5%, you can also have the facility to accept cheques. The institution you need to work with to make this happen is the Bath Building Society, which offers an account known as Business Direct. The account needs to be opened with a minimum balance of £2,500, made by electronic transfer or cheque. Obviously, Cash Plus does not give you the facility to issue cheques, but you can make an electronic transfer from your Cash Plus account to open the Bath Building Society savings account.

Once it is open, there is no requirement to maintain £2,500 in the account, so you could claw your funds back into Cash Plus if you needed them. Withdrawals from the Bath Building Society account can only be made to a nominated account in the same business name, but a Cash Plus account can satisfy these requirements (This has been confirmed by Noel Broomfield, who handles these accounts at the Bath Building Society, who is one of the most helpful people I dealt with in carrying out this research).

Unlike an Aldermore account, an account with the Bath Building Society will allow you to accept cheques, so whenever you receive a cheque you can just mail it off to Bath to be credited to your Business Direct Savings Account.

This will satisfy the requirements of many who are seeking to get into business, but the requirement to raise £2,500 to get the Bath Building Society account opened will be a source of extreme frustration to many. Is there an organisation which will give you the same facilities, without the need for such a high opening balance? There certainly is, and this is with a small, independent bank which I have yet to see mentioned on any comparison site or internet forum. If I hadn't been prepared to personally research all 317 of the banks in the FSA document, I'd never have found it. It is known as the Kingdom Bank, and it is a one-branch bank based in Nottingham which offers mortgage facilities to Christian churches.

With the Kingdom Bank, it is possible to open a Call Direct account. This operates in a similar way to that of the Bath Building Society, but without the need to have any more than £1 to get the account opened. The AER is only 0.30%, but that is scarcely likely to be a factor in the choice of someone who cannot raise £2,500 to use the Bath Building Society. The Kingdom Bank Call Direct account gives you the ability to receive cheques, and to mail them off to Nottingham to have them credited to the account. You will need to give telephone instructions for withdrawals, as there are no online banking facilities or email options, but money can be paid into the nominated account. As with the Bath Building Society, a Cash Plus account will be usable for both the initial credit and the recipient account for those withdrawals. (I have personally visited the sole branch of the Kingdom Bank in Nottingham, and have confirmed this. I have also opened a personal savings account to test the reliability of the bank.)

So, it is possible to achieve a full range of business banking facilities with no credit scoring by combining Cash Plus with other providers. The only thing you won't be able to do is to write cheques in the business name, but that is not likely to be a problem in the modern age. If it is, and you do need to be able to do this, there is a possible answer.

The Bank of Baroda saving account, which was mentioned earlier in the personal banking section, is only available to individuals. However, the current account which the bank offers can be opened in a business name, and as with the saving account there are no credit checks. The disadvantage is that you need to maintain a balance of at least £500 in a current account with the Bank of Baroda to keep it active, but any business with a heavy trading volume that absolutely needs to use cheques does now have an answer.

As you can see, it is now possible for anyone to obtain full business banking facilities without the need to undergo any form of credit scoring.

Aldermore Easy Access Savings Account

Bath Building Society Business Direct Account

Kingdom Bank Call Direct Account

Bank Of Baroda Current Account

SH

[ScabHunter]

Re: Surviving The British Banking System – For Credit File Challenged People

13 Recommended Mortgage Lender

Finally, we come to the subject of borrowing money. To most of this subject, I only have one thing to say, and that is – Don't do it. Credit cards and loans are what get people into trouble, and my job is to get people out of trouble. However, there is one case in which the borrowing of money can be justified, and that in the purchase of assets which are likely to increase in value.

If you can purchase property at the right time during the market cycle, when the price has bottomed out but is starting to show signs of recovery, and you can buy from a highly motivated seller to achieve a price below existing market value, you have a high chance of profit and an extremely low chance of falling into trouble. There are times when borrowing money to buy property makes sense.

There are no lenders who are prepared to lend to people with severely damaged credit ratings. The only hope you would have in that case is to find a private investor who is looking for an opportunity to invest, and to find a property priced well below market value. In that case, it may be possible to draw up a deal where you live in the property and pay your rent to the investor, and also let a room to a lodger who pays the investor.

The greatest problem in the present market is not those with severely damaged credit, as they are unlikely to be in a position to sensibly invest in property anyway. The greatest difficulty is with those who are facing silly declines from mainstream lenders, due to isolated small markers on the credit file from utility companies or cell phone providers. This ludicrous policy is denying many credit worthy people the chance of getting on to the property ladder and owning their own home.

The one mortgage lender which is prepared to judge cases on their merits is one known as Aldermore. They were mentioned earlier in the business banking section, a being a provider of relatively high interest business deposit accounts. Where that money gets invested is in loans to property buyers, and this lender is at least prepared to look beyond a computer screen and its irrelevances when making lending choices.

You will still need to be credit worthy, and to have recovered completely from any debt problems you may have had in the past, but I know people personally who have managed to finance their property purchase through Aldermore after being turned down by High Street lenders. If I was in a position to want to purchase property and become a home owner, they are the lender I would be looking to work with.

Aldermore Mortgages

SH

[ScabHunter]

Re: Surviving The British Banking System – For Credit File Challenged People

14 CONCLUSION

That concludes this comprehensive report into the banking landscape of Great Britain. I hope it has helped you to get whichever facilities you need to help your life run smoothly.

Of course, there is still the need to campaign tirelessly for the High Street banks to drag their game out of the gutter and to begin to treat people in a reasonable manner. There is no excuse for the industry not to have certain minimum standards which need to be maintained, such as basic accounts which genuinely do offer the facilities which people need to run their lives. Direct debits need to be part of this, and all banks should be offering them.

There is no excuse for denying people chequebooks, when it is easy enough to impose a deposit requirement which would allow the recovery of fees for bounced cheques, at which time the account could be terminated. Cheques are no more of a risk than direct debits, which the less sleazy and disreputable of the banks are still prepared to offer.

Business customers especially need to be treated like human beings, and as the government derives tax revenue from business it should obviously be taking a heavy hand with banks which maliciously prevent taxable income from being earned. If Cash Plus can offer what is essentially a basic account for business customers, there is no reason why every single one of the banks cannot do the same. It is, after all, a product for which they could charge whatever fee is necessary to cover their expenses and make a profit.

Ultimately, though, this is not a thread for moralising, or for dreaming about what should be. It is a site for helping people deal with the reality that is, and that we all have to cope with. I hope you have found it useful.

SH