The FCA has received many reports from consumers, public bodies and commercial organisations about an entity styling itself as WeRe Bank. Find out more about WeRe Bank’s activities and why we have some concerns about it.
How it works
WeRe Bank is a UK-based venture which purports to be a people’s or community bank, and appears to have created its own currency, the RE.
Members of the Re-Movement are required to issue a Promissory Note (a legal instrument in which one party agrees in writing to pay a sum of money to the other party) to WeRe Bank to the sum of £150,000, which is payable ‘within a ten-year anniversary’ from the time of joining (however, WeRe Bank states that it will not need to call in the Promissory Note). Members are then able to buy RE cheque books.
WeRe Bank states that its cheques can be used to pay all your public liabilities (such as council tax demands, utility payments, tax) and private payments between consenting parties (including mortgages). Its website claims that, under sections 42 and 43 of the Bills of Exchange Act 1882, if your payment is refused the Payee is acting in dishonour and your liability for the payment ceases.
Why we are concerned
Although WeRe Bank refers to itself as a bank, based on the information currently available to us, it does not appear to be carrying on any activities that would require it to be authorised by the FCA. Regulated activities carried out by authorised firms include accepting deposits or providing advice on regulated investments.
We are concerned that vulnerable consumers may be attracted to WeRe Bank’s claim that they will be able to pay off their debts ‘for free’ using RE cheques, even though they have not had to pay any money into an account.
Cheque & Credit (C&C) is the interbank payment system in England, Scotland and Wales that processes cheques and other paper instruments. C&CCCL (Cheque and Credit Clearing Company Ltd) operates the C&C payment system. www.chequeandcredit.co.uk
The C&CCCL states that cheques are not legal tender and never have been. This means that if you owe someone money, they are not obliged to accept a cheque. Instead, a creditor is entitled to be paid in legal tender and can refuse payment in any other form.
We have received numerous reports from financial institutions, councils, utility companies and other businesses that have been presented with WeRe cheques by consumers attempting to pay off their debts. None of these institutions has accepted the cheques as legitimate payment.
As such, while WeRe Bank does not appear to be carrying on any activities which require FCA authorisation, we advise any consumers considering dealing with WeRe Bank to exercise caution.
We believe that you are unlikely to be able to pay any of your debts using a cheque from WeRe Bank. Instead, you may end up with additional charges from your creditors for late payment. You could eventually be subject to other sanctions such as County Court Judgements or repossession proceedings.
You should also be aware that if you deal with a firm that is not authorised by us, you will not have access to the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS) if things go wrong.