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Crisis for agents as banks set to insist on individual client accounts

Lloyds Bank appears to have contacted at least some of its letting agent clients to say that it is closing all undesignated client accounts with 60 days notice.

The wording of an email sent to agents appears to suggest that instead of having an undesignated account, the agents should set up multiple - which means possibly scores or even hundreds - of individual designated accounts.  

Letting Agent Today has been contacted by Bournes Letting Agents in Hampshire, which received both a telephone call and an email from Lloyds; Julian Blackmore, Bournes’ director, believes the same policy may be applied to agents by all major banks.


LAT has asked Lloyds for its comments and will post them when we receive them - this certainly looks as if it could be a substantial pain, with additional work and cost for agents.

Here is part of the correspondence from Lloyds:

A recent review of your Undesignated Client Accounts (UCAs) [detailed below] has been completed following the information that you recently supplied.

The result of the review is that we’re no longer able to provide you with Undesignated Client Accounts. We recognise this change may cause disruption to your business, and we’ll work with you to explain your options and minimise the disruption as much as possible. 

As a result of this change, you now have 2 options:

Option 1

Close your Undesignated Client Account and open multiple Designated Client Accounts.

        We’ll need to know how many Designated Client Accounts you require.

        The process of opening multiple Designated Client Accounts is supported by an automated solution to make opening the accounts quicker.

Option 2

Close your Undesignated Client Account and make alternative banking arrangements.

Please let me know your preferred option by [09/08/2019].

If you select option 1, we’ll need some information about your new Designated Client Accounts and we’ll write to you again with instructions on what you need to do.

In the meantime, your Undesignated Client Account will remain open, and you can continue to operate this until the new Designated Client Accounts are opened and all banking arrangements have been transferred over.



  • James B

    Strange to target one agent when they will have thousands of agencies never heard of any others in my area getting this


    The rest probably don't bank with Lloyds


    Lloyds arent targeting one agent, but all agents by region. Seems this month its the South. Spoken to a few of our neighbouring agents who have also heard from the ''By Your Side'' bank who disgraced themselves and were saved by the public purse.


    we have also recieved such correspodance

  • Justin Moy

    Having looked to get such an account recently, many of the High Street banks are looking to do this for new customers, so I presume it will be for 'all' soon.

  • icon

    This has happened to me so it’s definitely not isolated and I’ve been told by a senior person at Lloyd’s that they plan to do this across all of their letting agent clients that don’t meet Lloyd’s criteria such as to be registered with the governments AML scheme which doesn’t take effect until January 2020. This is a big problem coming and it will not just affect Lloyd’s in my opinion.

  • icon

    More accounts...more bank charges! Duh

  • jeremy clarke

    Yet again interference with an industry by people who do not understand it. How on earth do you manage 150+ accounts as far as staff time is concerned and reconciling would be a nightmare. Is there even a software system that would cope?

  • NW Soc

    We had this happen last year, 2 months after opening a new client account with Lloyds. We recieved a letter stating we needed to open 600 individual client accounts and that if no action was taken then the account would be closed in 3 months.

    As the actual Directive states

    Directive (EU) 2015/849 is amended as follows:

    (1) point (3) of Article 2(1) is amended as follows:

    (b) point (d) is replaced by the following:

    ‘(d) estate agents including when acting as intermediaries in the letting of immovable property, but only in relation to transactions for which the monthly rent amounts to EUR 10 000 or more;

    We wrote to the CEO António Horta-Osório, who basically responded saying "commercial decision not to offer Undesignated Client Accounts, regardless of the level of monthly transactions" So moved to another bank. upsetting 600 tenants who had just changed the DD's

    So a bank saved by public funds, with the strapline "By your side" isnt.

  • Sophie Lang

    I had exactly the same phone call with Lloyds yesterday. Luckily we have joined to Payprop so we have now moved to Natwest. This is a nightmare, I have 600 landlords, and that system isn't sustainable or practical for this sort of business. Now we have CMP I don't understand why it has to be this way!

  • Angus Shield

    Cynical nerve twitching here with both 'EU Directive' and 'bank charges'.
    Methinks Lloyds (and possibly others) have only 84 days to implement their 60 day penalty

  • Angus Shield

  • Kristjan Byfield

    Have only heard Lloyds doing this- plenty of other banks to choose from. Surely moving bank will be easier than opening a new acc for every client you manage.

  • Don Holmes

    Lloyd’s are at it again. Or do the have a choice given the EU directive? The sooner we’re out the better. In the meantime write to Kevin Hollinrake MP at the Houses of Parliament. He has a personal issue with Lloyd’s, Horta-Osorio and the banking world! I’m going too.

  • icon
    • 08 August 2019 12:48 PM

    As a LL my sympathies are with LA.
    This change in banking will impose additional costs which will have to be paid for.
    Guess who will be the ultimate payers of these costs!?.............................Yep the good old tenant!!
    It wouldn't be too much of a stretch to imagine this situation could be visited on LL.
    So a client account per tenant if the LL is self-managing.
    It won't be the last time that we hear about this banking change.
    First they come for the LA next will be the LL!!
    As has been alluded to there isn't the software out there that can cope with this situation.
    Of course from a bank's perspective every account would attract banking charges.
    A nice little earner.
    2 million client accounts would be required with the roughly 2 million rental properties.
    Might be more cost effective to go round and collect CASH!

  • icon

    It really is ludicrous. I have spoken to Barclays who are also withdrawing their Undesignated Client Accounts and Nat West who tell me their client accounts are 'under review'. Santander no longer offer this account and I gave up with HSBC after waiting 50 mins listening to dreadful hold music. Tempted to try Monzo quite frankly...

    Algarve  Investor

    Didn't Monzo have a massive data breach the other day, with the online bank urging all of its customers to change their passwords?

    The headache-inducing orange colour of the card would also annoy me - not that such minor things should matter!

  • David Robinson

    Are they doing this only to those agents who don't have a CMPS?

    Proper Estate Agent

    No, everyone. I spoke to Lloyds and they didn't even know that agents had to have CMP and their client accounts audited. They said they made the decision 2 years ago and its taken them this long to implement it! They also said that they will close all accounts of ANY company that is not FCA regulated, not just agents. I also spoke to the TPO who were not aware of the crisis about to hit the fan.

  • icon
    • 08 August 2019 16:50 PM

    Some banks have introduced a no cash receipts from 3rd parties which prevents a tenant paying their rent in cash to the LA or LL bank account.
    A LA just has to determine which banks will permit such cash receipts.
    I believe Barclays and HSBC do via their new ATM.
    All you need are the bank details and then the cash is credited though I believe it is not possible to do this over the counter unless you have a pre-printed giro credit slip.
    But all this just makes it a load of additional unnecessary hassle.
    More unnecessary work for LA as if they haven't got enough to do already!!
    The whole situation certainly merits the attention of LA with a view to changing their banking arrangements

    S l
    • S l
    • 09 August 2019 18:34 PM

    at least they allow the tenant to pay into the LA account. Barclays, nationwide bs and other banks now do not allow anyone to pay into an account which is not in their names, Even a mother cannot pay pocket money into their own children's account .

  • icon
    • 08 August 2019 16:57 PM

    @J Blackmore
    Not that I expect you to know but your opinion could be useful but what organisation or entity within the PRS that have bank accounts would need to be FCA regulated?

    So I'm thinking of the small corporate LL etc.
    Might they be affected by this FCA issue you have highlighted.
    It does seem that things are going a little but crazy.
    Things seem to be popping up that nobody is aware of.
    This latest Lloyds situation being the most recent.
    Couldn't Lloyds have contacted those affected customers 2 years ago to advise them that things will be eventually changing?
    At least it would give LA etc a good lead time to change things
    It seems every week there is something new to cope with in the PRS!

    Proper Estate Agent

    In theory it's potentially worse than people realise because when you take a holding deposit from a tenant, that should go into the tenants designated client account, so you would need to open a client account for each applicant until such time as they lawfully become a tenant of the landlord, until then it's their money. Imagine having to open a bank account just for a tenant to apply! I'm not sure how 3rd part companies like proppay will deal with it unless they have an arrangement of some kind.

    A corporate landlord I spoke to had to have a client account too as they needed CMP, so it will affect everyone in the PRS.

    What a total an utter mess.

  • icon
    • 08 August 2019 20:56 PM

    So that would potentially mean LL not wishing to take holding deposits!
    If a LL or LA holds a holding deposit and DOESN'T open a client account could they be hit with a £30000 fine for not administering the holding deposit in a client account!?
    Won't this just mean that tenants can't be certain they have a place?
    It would be a reference race between 2 competing tenants.
    Not sure prospective tenants would like that!!

  • icon

    I wonder if this will also apply to the processing of rents?

  • icon

    We were subjected to a TSB client account review this year. TSB asked me to send them a detailed list of monies held in our client account on a specific date and gave me something like 48 hours to reply. They then came back to me and requested that I send them scans of about 10 peoples ID whom they had selected. They said they were satisfied. I asked our professional body for advice as it all seemed very odd and they said that due to money laundering regulations banks are being told to check that client accounts really do hold client money for real clients and that banks don't want this extra workload and are making it very difficult or even impossible to open a client account and closing down accounts if they are not satisfied with proof of funds provided. Now this crazy idea of designated accounts. Why are decent businesses having essential services removed in the name of AML.

  • icon
    • 09 August 2019 10:01 AM

    It would seem a simpler solution is for photo ID etc to be sent to the bank when a new tenancy starts.
    No tenant could possibly object to their details being sent the LL bank client account.
    If they did then the LL would not take them on.
    Not sure whether the GDPR is being complied with though.
    Are LL permitted to send banks tenant ID etc?

  • icon

    Dont see why not PB we have to sent tenants id to councils

    S l
    • S l
    • 09 August 2019 18:42 PM

    wouldnt that breach the data protection? we are not entitle to share tenant details with anyone without their approval

  • icon

    Never trust a bank any bank since cc

  • icon
    • 09 August 2019 18:39 PM

    Yep remember those far gone days when it was
    Trust me I'm a #anker??
    Those days are long gone never to return.
    I distrust all banks and make sure I understand all their dodgy conditions etc.
    That way I am in control and not the bank.

  • icon
    • 09 August 2019 19:00 PM

    It seems that these are difficult times for LA.
    From a selfish perspective I'm more concerned as to whether LL might be affected.
    There must be many LL that receive vast amounts of rent into one account.
    Surely it can only be a matter of time before banks start wanting individual tenant accounts!?
    I see no difference between them and LA.
    I believe LL need to carefully observe how LA manage this situation.
    The reach of AML seems to go into all sorts of areas never considered.
    Personally I will NEVER open individual tenant client accounts.
    I will collect CASH accepting the inconvenience of such.
    I will then feed in the cash to my various accounts.
    There is no way that I would comply with these bonkers AML regulations and there is no way that I can be forced to.
    Collecting rent in cash is still acceptable and there is nothing HMRC or the banks can do about it!!


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