paying up front for services

dejongj said:
I ran into that "problem" of not owing anything, it can make you appear a huge risk to some.
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You wouldn't believe the problem we had opening a bank account, for my son that was about to start work.
He had no credit rating, but why should he? he'd been subsidised by the bank of dad up to that point.
It was the Woolwich BTW, and yet we ( my ex and I) had also held a joint account with them for many years.

The Halifax made it so much easier, and yet at that point we never had an account with them.
Once My lad was sorted we also transferred the "Woolwich" account to them also :D
 
Cobra said:
You wouldn't believe the problem we had opening a bank account, for my son that was about to start work.
He had no credit rating, but why should he? he'd been subsidised by the bank of dad up to that point.
It was the Woolwich BTW, and yet we ( my ex and I) had also held a joint account with them for many years.

The Halifax made it so much easier, and yet at that point we never had an account with them.
Once My lad was sorted we also transferred the "Woolwich" account to them also :D
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Exactly my problem when I arrived here; no debt, wad of cash in the bank I tried to transfer, but couldn't get a current account. Foreign bank references It was a ridiculous situation. I had to take a personal loan to get going.
 
dejongj said:
wad of cash in the bank I tried to transfer, but couldn't get a current account ....had to take a personal loan to get going.
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Well you were obviously a money launderer :p
And yet they were happy enough to lend you money? It doesn't make sense does it ? :(

There was a hell of a lot of issues a few years back, everyone and his wife that was involved in finance one way or another seemed to jump on the "its to prevent money laundering" band wagon.
TBH I don't know what triggered it, but when it started it started with a vengeance :(
 
Less than 2 years ago I sold a lens & took £3k in cash to my local bank. Even though we've had an acct with them for 30 yrs & they know our faces, they still had to ask a couple of `security` questions. :rolleyes:
 
OldCarlos said:
Less than 2 years ago I sold a lens & took £3k in cash to my local bank. Even though we've had an acct with them for 30 yrs & they know our faces, they still had to ask a couple of `security` questions. :rolleyes:
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You were putting money in. I'd have told them to mind their business.
 
ecoleman said:
You were putting money in. I'd have told them to mind their business.
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I actually said, "why what's it got to do with you?"
She just said it was bank policy. (Yorkshire Bank) Not sure what £ figure is for triggering the question?

I told her exactly where it was from, but if it happens again i'll just say it's savings from under my mattress.
 
Didn't think they needed to know unless it was £10k in cash, then money laundering rules come into play.
Or at least it used to be £10k.
 
You all may want to educate yourselves regarding the international mandatory suspicious activity reporting (sar) requirements for financial institutions.

They've got every right to ask a perfectly acceptable question.
 
ecoleman said:
You were putting money in. I'd have told them to mind their business.
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Then they would have probably refused to let you deposit your money and in a few days a nice friendly policeman would be knocking on your door.
 
dejongj said:
You all may want to educate yourselves regarding the international mandatory suspicious activity reporting (sar) requirements for financial institutions.

They've got every right to ask a perfectly acceptable question.
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Nah, it's ok, I never pay money in. :(
 
jakeblu said:
Then they would have probably refused to let you deposit your money and in a few days a nice friendly policeman would be knocking on your door.
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So what? There are plenty of banks and nothing wrong with policemen.

But for 2-3k I'd probably tell the policemen to mind their business as well.
 
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Most banks have a limit on cash withdrawals as well.. what is that all about.?
 
Again, money laundering. In September 2014 we went on holiday to Crete and as usual, I took cash rather than rely on ATMs. Had a brief chat to plod on the way out (can't remember why they knew I had lots of cash) and they were perfectly satisfied with my (true) explanation that we pay for everything over there in cash, including car hire, fuel and hotels. Rather than cash a cheque for £?,???, I take out the maximum allowed from Cashpoints for a few days, although I do use a debit card when buying the €s.
 
ecoleman said:
Why? 2-3k is not a lot of money. If my bank asked a load of questions every time I put money in, they'd soon not be my bank anymore.
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Did you just ignore the previous post on this? I agree 2-3K is not a lot of money to me either, however it would be unusual for me to pay it in in cash. Likewise it could be a lot of money for someone else who is usually overdrawn and again unusual to be paying that kind of money in. Or it could be totally normal that you regularly make cash payments into the bank account.

The banks are obliged by law, around the world this is not just the UK, to file suspicious activity reports, so if you do this regularly then there is nothing suspicious about it. If you do it as a one off and act like a normal reasonable human being and tell them briefly what the reason is; i.e. sold a car, a customer paid in cash blah blah. Then again no issue. But if you get all uppity about it, they won't have to tell you (by law) but chances are that a SAR gets filed for you.

https://en.wikipedia.org/wiki/Suspicious_activity_report
Yes it has an American bias but it is a world wide system...

But hey ho, naturally you know better and just get all uppity about it and tell the banks and police and everyone else to mind their own business. I could recommend a bank in Luxembourg and Liechtenstein that may be able to help you unless you want to keep it under your mattress.

As you were :)
 
Cobra said:
You wouldn't believe the problem we had opening a bank account, for my son that was about to start work.
He had no credit rating, but why should he? he'd been subsidised by the bank of dad up to that point.
It was the Woolwich BTW, and yet we ( my ex and I) had also held a joint account with them for many years.

The Halifax made it so much easier, and yet at that point we never had an account with them.
Once My lad was sorted we also transferred the "Woolwich" account to them also :D
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Times change.
Back in the day! When I opened my first bank account in 1951 . I was sixteen and went, with my mother, to the local Lloyds branch to see the Bank manager, All you had to do in those days was be recommend by by an existing account holder, and supply two personal references. (supplied by my mother and the manager) Deposit £5 or more, and bob was your uncle. ( £5 was more than many people earned in a week)
I am not even sure that a 16 year old can even have a checking account now.
 
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Terrywoodenpic said:
Times change.
Back in the day! When I opened my first bank account in 1951 . I was sixteen and went, with my mother, to the local Lloyds branch to see the Bank manager, All you had to do in those days was be recommend by by an existing account holder, and supply two personal references. (supplied by my mother and the manager) Deposit £5 or more, and bob was your uncle. ( £5 was more than many people earned in a week)
I am not even sure that a 16 year old can even have a checking account now.
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I was glad that my local bank branch in Sunningdale was one where you still met with the band manager. That made the difference for me.

But yet my daughter, 12, has a visa debit card with contactless payments etc. Her pocket money gets transferred electronically :)

What is a cheque?
 
Terrywoodenpic said:
Times change.
Back in the day! When I opened my first bank account in 1951 . I was sixteen and went, with my mother, to the local Lloyds branch to see the Bank manager, All you had to do in those days was be recommend by by an existing account holder, and supply two personal references. (supplied by my mother and the manager) Deposit £5 or more, and bob was your uncle. ( £5 was more than many people earned in a week)
I am not even sure that a 16 year old can even have a checking account now.
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I was a few years after you, and all I had to do was walk into a branch shake the managers hand and give him £1,
and tell him my wages will be in there at the end of the month dead easy (y)
Indeed how times have changed and not always for the better. :(
 
dejongj said:
What is a cheque?
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A very useful piece of paper that one signs and enters an amount to "pay" someone.
I've just renewed my gun licence, the completed forms needed to be sent off the the appropriate police force with a cheque, "made payable to"
Its the only way you can complete the "transaction"
 
dejongj said:
What is a cheque?
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I get less than ten cheques a year and write even fewer these days. At one time it was twenty or thirty a month.
However they are still sometimes vital.
 
dejongj said:
Did you just ignore the previous post on this? I agree 2-3K is not a lot of money to me either, however it would be unusual for me to pay it in in cash. Likewise it could be a lot of money for someone else who is usually overdrawn and again unusual to be paying that kind of money in. Or it could be totally normal that you regularly make cash payments into the bank account.

The banks are obliged by law, around the world this is not just the UK, to file suspicious activity reports, so if you do this regularly then there is nothing suspicious about it. If you do it as a one off and act like a normal reasonable human being and tell them briefly what the reason is; i.e. sold a car, a customer paid in cash blah blah. Then again no issue. But if you get all uppity about it, they won't have to tell you (by law) but chances are that a SAR gets filed for you.

https://en.wikipedia.org/wiki/Suspicious_activity_report
Yes it has an American bias but it is a world wide system...

But hey ho, naturally you know better and just get all uppity about it and tell the banks and police and everyone else to mind their own business. I could recommend a bank in Luxembourg and Liechtenstein that may be able to help you unless you want to keep it under your mattress.

As you were :)
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I never said I know anything better than anybody else. I just stated what I would do. They can file whatever report they like.

I'm not really interested in your opinion of it.

Anyway, I thought I may just drop this here
http://www.telegraph.co.uk/finance/.../Are-banks-right-not-to-give-us-our-cash.html

I particularly like the bit that says
"To allay the worst fears, there has been no regulatory or legislative change."

and this
"Crucially, HSBC said banks had no right to deny withdrawals, even if a customer refused to provide an explanation, unless they were almost certain of fraud. The problems stemmed from a breakdown in communication from head office, which has sought to empower staff to make better decisions in the crackdown on fraud."

There is also this article
http://www.thisismoney.co.uk/money/saving/article-2551823/Why-banks-wont-let-pay-cash-account.html

Where HSBC again agreed they had no right to prevent a customer from depositing money

‘Since last November, we may have asked customers to show us evidence of where the cash originated from or what it is required for.

‘However, it is not obligatory to provide documentary evidence - and failure to show evidence, as in Mr Harrison’s case, is not a reason to refuse a withdrawal or deposit.'
 
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Terrywoodenpic said:
Times change.
Back in the day! When I opened my first bank account in 1951 . I was sixteen and went, with my mother, to the local Lloyds branch to see the Bank manager, All you had to do in those days was be recommend by by an existing account holder, and supply two personal references. (supplied by my mother and the manager) Deposit £5 or more, and bob was your uncle. ( £5 was more than many people earned in a week)
I am not even sure that a 16 year old can even have a checking account now.
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My 14 year old (15 now) open a cheque account with Natwest. He has a chequebook although that's safely put away in one of my draws. His pocket money is paid into the account and he can use his debit card to buy what he wants or order goods online.

His only limitation is that he can't transfer money via online banking.
 
Bobsyeruncle said:
If stores sell interest bearing credit, the finance company pays them a percentage for each deal, but the stores pay the finance company for interest free.
There would be no point in the finance Co offering interest free credit if they weren't making any money.
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That isn't usually the case at all. Even on interest free credit options the retailer will usually receive a small fee from the finance company. This is certainly true where the finance option offered is buy now pay later type or where the customer is charged a small monthly amount with a lump sum to pay at the end. A large percentage of people that take out these type of finance agreements fail to pay within the interest free period of time and then go straight into a high interest finance agreement which earns the finance company a hefty sum sometimes they pay a percentage of this to the retailer as well.

That is why retailers are so keen for there customers to pay by credit even if it is an interest free option it also makes it easier for them to sell add ons that you may not have purchased otherwise due to your cash budget.

As an example many years ago now I worked for a large carpet retailer every time we sold an interest free credit agreement under £1000 £12.50 hit our P&L if the credit agreement was over £1000 we got a payment of just under £20 on our P&L. I also worked for a large furniture retailer and it was similar there as well. After that I worked for an electrical retailer they used to pretend to the staff that interest free finance did them no favours (to encourage the staff to sell finance agreements with large interest payments) but based on the way wanted finance even interest free pushed on customers they must have been receiving some sort of payment in return.
 
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ecoleman said:
I never said I know anything better than anybody else. I just stated what I would do. They can file whatever report they like.

I'm not really interested in your opinion of it.
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It is not an opinion, it is an explanation of how it actually works.
 
f/2.8 said:
That isn't usually the case at all. Even on interest free credit options the retailer will usually receive a small fee from the finance company. This is certainly true where the finance option offered is buy now pay later type or where the customer is charged a small monthly amount with a lump sum to pay at the end. A large percentage of people that take out these type of finance agreements fail to pay within the interest free period of time and then go straight into a high interest finance agreement which earns the finance company a hefty sum sometimes they pay a percentage of this to the retailer as well.

That is why retailers are so keen for there customers to pay by credit even if it is an interest free option it also makes it easier for them to sell add ons that you may not have purchased otherwise due to your cash budget.

As an example many years ago now I worked for a large carpet retailer every time we sold an interest free credit agreement under £1000 £12.50 hit our P&L if the credit agreement was over £1000 we got a payment of just under £20 on our P&L. I also worked for a large furniture retailer and it was similar there as well. After that I worked for an electrical retailer they used to pretend to the staff that interest free finance did them no favours (to encourage the staff to sell finance agreements with large interest payments) but based on the way wanted finance even interest free pushed on customers they must have been receiving some sort of payment in return.
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Buy now pay later is not an interest free loan, so yes, the retailers will receive a fee for that
I've worked for 4 multi-national retailers who received no payments for straight interest free deals. The last one was only 7 months ago.
I also had my own retail business for 9 years and we received no payments for offering interest free, but we did for all the others.
Never worked in the carpet or furniture industry though, so maybe that's different?
 
Back on the original topic, I run a roofing company and we tend to ask for 20% up front for larger jobs, partly to maintain cash flow but mainly to protect ourselves against non payers. Paying anyone up front in full nowadays is just not the done thing. With absolutely anyone being able to start up a business or simply turn up in a van with tools to do work, unless you are recommended by family / friends of the customer, they have no idea who you are or if you any good, or even if you have a clue what you are doing.

I have seen other forums with people saying tradesmen should have a good credit limit at their merchants and should never need any money up front! From my experience there's usually one of two reasons people ask for some money up front, the first simply being they need to cover costs (labour for example, where you pay guys weekly but you wont get paid until the end of a 6 week job - Edit - Also, I know a couple of companies who don't have credit accounts at all, so a deposit is necessary) or secondly the less nice to hear and even worse to deal with - the rogue customer. In the 15 years I've been roofing, I've seen a fair few, luckily in the 4 years I've been trading as my own entity I've only dealt with one (maybe a possible second). People who need work doing but have no intention of paying for the work.

Obviously there are the rogue traders too, if only the two could meet each other! I guess my point is, you should expect to pay or at least be prepared to pay a deposit of some sort to any tradesman. The total cost of the materials (in my trade at least) is a fair amount, to others it will be different. For example a plasterer doesn't have large materials costs so he may ask for a percentage of the total up front as I do.

For work that won't take very long, an up front payment, I think, is seen more about you showing willingness to pay or to cover other immediate costs. For work spanning over week / months, the best way I have found is to set up a payment schedule.

I.E. 20% up front, 30% when they're about half way done, another 30% at 3/4 and the final 20% on completion. That way you are helping the tradesman by covering costs as they happen, but making sure you are protected by roughly paying for sections of work that have already been completed.

Everyone works differently and everyone has different expectations, but I think a request for full up front payment can be suspicious, and refusing to work at all without the full up front payment is dodgy as hell.
 
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I do certain work cash up front, as it's very small amounts it's not worth the hassle of chasing payments etc. I don't really like doing it, but it's the only way that works well. It's amazing the amount of people who will order something and change their minds when payment is due! (and when it's something you've made bespoke that's not on)
 
Alan Clogwyn said:
I do certain work cash up front, as it's very small amounts it's not worth the hassle of chasing payments etc. I don't really like doing it, but it's the only way that works well. It's amazing the amount of people who will order something and change their minds when payment is due! (and when it's something you've made bespoke that's not on)
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Richard, you make a good point, Bespoke items I see as slightly different, if you are commissioning someone to create something for you, I think a significant up front payment is reasonable.

I get your point re: chasing payments. I give customers 7 days from completion date to pay, and all too often I'm still chasing them 2 weeks later.
 
the last few posts have got down to the nity-grity of what is reasonable.
Both the Tradesman and customer should accept any arrangement that is "reasonable" and acceptable to both parties.

Unfortunately there are too many rogues on both sides of the fence today, to be completely trusting when dealing with time or money.
In times past when we all knew our local trade people, and had probably all gone to school together and who had family friendships going back years, things were very different. Trust was the norm, Or where a person was known to be untrustworthy or a bad payer, they would have to have some exceptional skills to be used at all. Or on the other hand have to pay before work started.
 
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