Take banks to court, lawyer argues

The Crown Prosecution Service should initiate criminal proceedings against banks that use charitable trusts to raise money without actually donating to good causes, according to a leading charity lawyer.

Last week it emerged that a number of high-street banks had conducted business through trusts established to raise money for a charity without informing the beneficiary organisation. The charities benefit only if the trust is wound up.

Stephen Lloyd, senior partner at Bates Wells & Braithwaite, said the CPS had grounds to initiate criminal proceedings against the banks under the terms of the Charities Act 1992. Section 60 of the act says a “commercial participator” – a company raising money on behalf of a charity – must issue a statement giving the names of the charitable organisations that will benefit. The maximum fine for each breach of the regulations is £5,000.

“The CPS should initiate criminal proceedings against each of them for breach of the regulations and seek the maximum fine in relation to each breach of the regulations, which one suspects will be many, given the sheer volume of marketing material,” said Lloyd.

A spokeswoman for the CPS said there would have to be a police investigation before the CPS would consider taking any action against the banks.

“It would depend on what evidence the police presented to us,” she said.

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Charities Act 1992

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