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refusal to engage with new client

new client is (allegedly) mixed in serious criminal activities - how to politely decline our service

Not sure how to approach this issue and decline our services...

My firm is a fairly small practice - just me and couple employees. 

We have been approached by a new client wishing us to set all up with the Companies House and HMRC. We have obtained the relevant identification documents followed by the Veriphy check. No red flags. All pass. We have applied to open a limited company on his behalf yesterday. The main activity of the company supposed to owner driver - nothing within regulated activities, very much within our perfect client base of £50K - £250K  TO businesses. 

I have now started our usual MLR process, risk assessment, due diligence, etc. I always do a google search on our clients as part of the assessment and to my shock this person featured in the many newspapers some time ago as a dangerous individual, mixed up in all kind of things... There was some action by NCA and confiscation under the proceeds of crime act. 

Putting the fact that aside I would have to rate the risk as HIGH , I am very uncomfortable to represent anyone with a dubious past and I don't want get involved and the same goes for the people that work with me.

Could one of more articulated colleagues here, provide me with an idea or wording on how to politely decline this engagement, without upsetting the client and refer to the previous history of this person??? As the person is based some distance away, we don't have to do it face-to-face and I'm more than happy to return the initial fee that was paid for the incorporation and admin. 

Thank you all in advance,

I'm posting this as anonymous user due to the sensitivity of this matter, I’m more or less a regular contributor on AW

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13th Dec 2018 10:30

You're between a rock and a hard place. You've taken his money and no doubt he'll expect it back with interest. You either become his dodgy accountant, or you wind up in the local canal.

I don't envy you.

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to Lone_Wolf
13th Dec 2018 11:21

It was only £50+vat so not sweating about this. But it's not funny.

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to tempanon
13th Dec 2018 12:20

Your no longer anonymous!

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to Rammstein1
13th Dec 2018 12:56

i am - created a one-off account!
another non-contributor to which i moan alot:)

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13th Dec 2018 10:54

"Unfortunately my firm has recently had a large increase in workload which we are struggling to deal with. As a result I do not feel that I can offer you the service that you deserve and so I must resign as your accountant. This is with immediate effect. When you appoint my successor, I will of course fully cooperate with them to help them take over. I wish you every success in your future endeavours."

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By RedFive
to Red Leader
13th Dec 2018 11:19

Nailed it. That's Aweb at it's best, right there.

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to Red Leader
13th Dec 2018 11:24

This sounds really good. We have not engaged the client yet apart from the initial incorporation and email with summary of our services we can offer. We only send out LOE once the due diligence is completed.
Thank you,

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to tempanon
13th Dec 2018 13:04

You haven't engaged the client but you have provided services for the client and taken money. Isn't there a contradiction there?

If you do mean you formed the company by 'initial incorporation', wouldn't you do that after deciding that you wanted to work with this person?

If I were the client I would feel pretty hacked off.

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to andy.partridge
13th Dec 2018 14:19

Quote:

If I were the client I would feel pretty hacked off.

I think we knew that already Andy.
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to Red Leader
13th Dec 2018 18:16

Are you saying you would be too, you knew I would be or that the client will be?

Certainly the third option can only be speculation. They might think the OP came across as a bit of a [***] and they're already looking at other options.

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13th Dec 2018 10:59

I would write and say that your practice has a restructure since speaking with them, and you can longer deal with his requirements.

You're not lying as any problems with this client would take up alot of your time as the principal and MLRO.

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to FCExtraordinaire
13th Dec 2018 11:26

Little bit, not sure, tbh as we only had email correspondence on Monday and he returned the clients form yesterday with the ID's and BACS.

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13th Dec 2018 11:23

I think this highlights "know your client" working properly for your business, so hats off to you in the first place for identifying this issue.

I would do as above, just do a "its me, not you" brush off.

My usual is along the liens of "due to growth of several clients we are over committed, and will have to reduce oru workload to give good service to all our clients blah blah blah, you get the chop son as we haven't really started with you yet etc etc.

Dont say "I am scared of you and your psycho mates"

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13th Dec 2018 13:25

I had one like that a while ago. I politely said go away. Within a week I received a professional letter to which I made a non committal reply. He is now on his 3rd accountant after me in a period of 9 months

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13th Dec 2018 14:53

"I always do a google search on our clients as part of the assessment and to my shock this person featured in the many newspapers some time ago as a dangerous individual, mixed up in all kind of things... There was some action by NCA and confiscation under the proceeds of crime act."

You say some time ago, so are people not allowed to reform? Not saying he has, I don't know, but I would give the benefit of the doubt providing their books are ok, which I wouldn't know until later, of course

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13th Dec 2018 15:09

Are you prepared to take an unnecessary risk??

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14th Dec 2018 00:27

Have you quoted him for ongoing services yet? If not just give an absurdly high rate. Say whatever you would normally charge + £1000 pcm. When he questions it just say you are very busy so those are your rates. He’ll go away.

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18th Dec 2018 10:38

Have you ever thought of just telling the truth? Just say you've found out about his past, and would be uncomfortable working with him. There will be no comeback. If you say anything else, he will in any case guess what the real reason is.

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18th Dec 2018 11:04

If solicitors refused clients with a dubious past, they would starve to death.
Notwithstanding, if you really are uncomfortable with this client;
suggest to him that he needs to choose a larger firm of accountants with wider expertise.
Recommend that he goes to the local branch of one of the big four.
They have experience in these matters.
Quote a fee that is so over the top, the he does go elsewhere.
Never refuse a client. Except and unless you have supporting evidence good in a court of law, or the client requires services outside of your expertise.
There are many reasonable professional ways of not taking a client, whilst avoiding suggesting he is a Mafioso.

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18th Dec 2018 12:03

What is your personal chemistry with the client like ? While I appreciate you don't know him very well yet, would you feel safe sitting down and having an open, frank discussion with him.

Just because the press make out he's some kind of violent criminal doesn't neccessarily make him so. "Mild mannered taxi driver jumps red light by mistake" makes for a far less exciting headline !

Also, how long ago is this alleged to have happened. Thgere's a big difference between a year or two ago, and back in the days of the Krays.

Your gut feeling may be right, and it may be better not to act for him.

But if he really is trying to make an honest living, he may well appreciate not having another door slammed in his face. Do you feel you could come to an understanding with him that everything has to not only be whiter-than-white, but can be demonstrated to be so, and that anything other than 100% honesty would be grounds for disengagement. It's more burden on him to prove his earnings and expenses, but one which leaves your concience clear while helping him build a better reputation.

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19th Dec 2018 12:15

I know its a case of locking the stable door, but we try to complete all MLR due diligence before starting work, or at the very least before taking any payment. Otherwise by returning the funds you have effectively cleaned them.

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