One of the first challenges for any small business starting out is to open a bank account or to obtain finance.

Sometimes this process can be problematic and if you have ever had an application refused or an account closed without explanation then the reason behind it could be rather sinister.

I am frequently asked to help entrepreneurs and directors of SMEs to overcome such difficulties, and often the answer is that something called a fraud marker has been applied to the director’s credit report. However, such markers can only be seen if the account holder has been the victim of fraud – most of the time they are hidden from view.

When they have reasonable suspicion that a financial crime has been committed, banks and other financial institutions load fraud markers to the National Fraud Database. This is done depending on the type of wrong doing alleged through organisations called CIFAS, National Hunter and Synetic Solutions.

Markers act as a behind the scenes warning system to other financial institutions to beware of the customer in question, and in the majority of cases customers are never told they have them. We know that banks load hundreds of thousands CIFAS markers every year. In practice such markers can destroy the ability to obtain credit for up to 6 years, and they can ruin careers.

Markers can prove particularly problematic to company directors because they are loaded against the names of individuals, not the business itself, and as such can negatively impact entire boards of directors threatening the survival of their businesses.
So what are the warning signs, and what can you do about it?

If an application has been refused or a bank account is withdrawn, ask the organisation for a reason. Some will tell you, others may not.

The next step is to make a Data Subject Access Request to CIFAS. If a marker has been loaded it will reveal which organisation has done so, and why. If no data has been recorded by CIFAS then try National Hunter and Synetic Solutions – reports from them take longer to generate.

Next, take legal advice before approaching the bank in question. CIFAS markers are very difficult to remove and saying the wrong thing to the bank at this early stage could cause months of delay, additional costs as well as potentially causing irreparable damage to your case.

Markers are easy to load because a low evidential threshold is required, but challenges necessitate complicated and diverse legal arguments backed with solid evidence of innocence to persuade banks to remove them.

The complaints procedures are also cumbersome with complex rules associated with them, particularly so for company directors.

If you are affected or for further information on Cifas markers contact Jeremy Asher.

Jeremy Asher

email: JAsher@setfords.co.uk
website: https://www.setfords.co.uk/our-people/profile/jeremy_asher/