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Sibling of mine asked me to open an bank account for her in my name. She wants to fill it with her savings and use it on day-to-day basis with a debit card.

I have a strong feeling this could backfire against me. What are the risks I could run in to if I did this?


I am looking for possible risks as if there were not the edited out reason. The question is simply "Possible risks of opening bank account for family member in own name"


As I stated, I had bad feeling about it and declined. Now I am just looking for possible risks for the argument sake.

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    Yeaaaaa......I wouldn't open any account for anyone in my name and they are the primary users. This would only work if you are married to the person and it has to be a joint bank account.....Don't open yourself to unnecessary issues. – Rudy Jessop Feb 20 at 15:47
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+50

There are several risks to you.

  1. Depending on the details of the arrangement, you might be liable for income tax on the money apparently "given" to you, and your sibling might be liable for income tax on the money you apparently "give" to them.
  2. If the bank find out that you have given her "your" debit card to use, that is against the Ts and Cs of the account and you could have this account, as well as other accounts you hold with this bank, closed.
  3. If your sibling runs up an overdraft on the account, you would be liable for paying it back.
  4. I know you edited out this part, but if you were doing this to assist with a fraud then you would also be an accomplice, which could result in criminal and/or civil charges against you.
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You edited out the part of you assisting your sister in hiding money from the court.

Read your original post out loud to yourself three times. Now what do you think? Of course it is a bad idea, and you should say "sorry sis, I am not going to help you break the law".

This would hold true even if you are beyond the jurisdiction of the EU.

Edit: So lets say that your sister did this because of some silly reason, like she has a fear of banks.

The typical risks exist for both her and you. For her, there is nothing stopping you from closing the account and taking all the money. You can siphon money off over time, or just take it all when the sum is sufficiently large.

For you, if she has checks, she can write a bunch of checks against the account, and you would be liable for the over draft fees and meeting the obligations of the checks.

The bottom line is that there is not a reason to do this unless there is some kind of fraud going on. Which is why editing out the problematic part does not really change the nature of the question.

  • Thank you for your answer. I am looking for possible risks if there were not the edited out reason. The question now stands as "Possible risks of opening account for family member in own name" – user82506 Feb 13 at 13:07
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Even if this was not fraudulent for external (a priori) reasons, the mere act of opening an account under your name in order to hide the true beneficiary is already money laundering and therefore fraud in its own right.

So, even if it were not explicitly against the bank's T&Cs (as Vicky answered), they could still close all your accounts. And that's not even the worst part. Money laundering carries jail penalties in all EU countries.

  • "The mere act of opening an account under your name in order to hide the true beneficiary is already money laundering." That is not true. For the act to be money laundering, the person doing the concealing must know, or reasonably should have known, that the monetary instruments being concealed were the proceeds of criminal activity. – TainToTain Feb 21 at 2:04

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