Client not accepting balance we hold for them

[Karen Dale]

We have a balance in our client account that is fairly old and we have been trying to return for some time. The balance needs to be returned to a company. We have established the company still exists on Companies House and have been communicating with the director. He is saying that the company does not have a bank account now and has given us bank details to send the funds back to another company which we have said we are unable to do. We have tried sending them a cheque to see if it will get presented but it does not. He is now ignoring our emails and we are unsure of our next steps. Has anyone had experience of a client not accepting the balance you hold and have any advice on where we go from here. Thank you

[Phil Invernizzi]

How much are you holding ?

[Kate Bowkett]

If the balance is below £500.00 I would email the client again and send a to be signed for letter basically saying that unless they engage with you to resolve the problem you will have no other option but to treat the balance as a residual balance and make arrangements to donate the funds to charity, and give them a time frame to reply. If the balance is over £500 do the same but substitute donating the money to charity with making an application to the SRA to donate the funds to charity under rule 5.1c of the SRA Accounts rules.

When making a request to the SRA you will need to have all the evidence of the steps and attempts to refund the money. I have had to do this on more than one occasion, I’ll be honest I have had a battle from time to time being told engage with the client and keep having to explain that the client won’t engage but have eventually got the confirmation to donate the funds to charity.

You could ask ethics but you will probably only get generic advice saying to keep engaging with the client.

Hope this helps

[Graham Richardson]

We had something similar, we collected rental debts for a sales & lettings agency who were taken over, the business that took them over did not continue with the lettings side of the business so did not want the funds we had recovered. They wanted us to send them to the landlords which we refused to do. I asked them for agreement that if they did not want the funds then could we donate them to charity to which they agreed.

Wrote to the SRA as it was about £1500 and they were not interested, they said as our client had agreed the funds could be donated then they didn’t need to provide authority, we were free to donate the funds as long as we did not have any suspicions about why the client would not accept the funds.

As the client was engaging with us our situation was a bit easier.

[Karen Dale]

Thank you all. The balance is over £500.00 so I was unsure how SRA would view this and what response I would get from them in this scenario if I submitted an application to them as we know the clients whereabouts and the client is aware that we are are holding their money but are just refusing to engage with us.

I did consider asking ethics but I assumed I wouldn’t get a straight answer from them so this has been helpful.

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