The Minister of State for the Home Office, Norman Baker MP, has confirmed that scrap metal dealers are not permitted to cash cheques whilst making an original payment to a supplier, in accordance with the Scrap Metal Dealers Act 2013.
Gavin Williamson, MP for South Staffordshire, wrote to the Minister following reports that many dealers are seeking to get around the new scrap metal for cash ban by offering to cash cheques on the premises.
One local scrap metal dealer went so far as to boast about the new system in a local paper. In their advert, they stated: “Weigh your scrap. Have a cheque. Cash your cheque with us. Leave with the cash. Just like the good old days. CASH FOR SCRAP.”
In response to Gavin’s concerns that the Scrap Metal Dealers Act was being avoided, Mr. Norman Baker MP stated that to confirm with the law dealers must ensure:
- The cheque is issued to a named person;
- All the record-keeping requirements are met;
- The cheque is cashed by a third party-so the cheque cannot simply be cashed by the scrap metal dealer when making the original payment;
- All ‘Know Your Customer’ checks are completed to comply with the Money Laundering Regulations 2007.
Furthermore, he stipulated that any business that operates a service cashing cheques must also be registered with HM Revenue and Customes as a ‘Money Service Business’ under the Money Laundering Regulations 2007.
Failure to comply with either of these laws will result in significant sentences for the dealer involved.
Gavin said: “It is appalling that there are still businesses out there which are trying to get around their legal responsibilities. The law is clear. Cash for scrap is no longer legal and any scrap dealer seeking to get around these new regulations must be appropriately punished.”