Ask Sindie: 'My Scottish cash is rejected in England'

Your money problems solved

After some discussion about whether the money was legal tender, staff said it was store policy not to accept Scottish notes because "there are a lot of forgeries". I took my business elsewhere but I'm shocked. Can it really be the case that, when spending time in Scotland, I need to get rid of the money before coming home?

PD, Derbyshire

A: It may have been a shock but, actually, the retailer was well within its rights to say "no": Scottish notes aren't legal tender in England.

"In England, retailers don't have to accept the money," says Brian Capon, spokesman for the British Bankers' Association. "Only a note from the Bank of England is [recognised] as this country's currency."

High-street banks across England will normally accept Scottish notes from business clients, but not from ordinary personal customers, he says, though this policy can vary between banks.

Down on the shop floor, many English retailers - particularly the larger ones - will accept Scottish notes, knowing that they will be honoured by branches of the Scottish banks in England. But that's not always the case with smaller stores, which can be wary of the cost of handling the cash as well as lacking confidence in the notes' authenticity.

The newsagent's concern about forgeries is well-founded since, according to figures from the Committee of Scottish Clearing Bankers, the number of counterfeit Scottish notes discovered in circulation almost doubled between 2003 and 2004 to 58,807. In particular, the number of dodgy £50 notes went up from 16 in 2003 to 2,743 last year. However, last year's overall figure for fake Scottish notes is a big improvement on the total for 2002, which was well in excess of 100,000.

The circulation of Scottish notes is an anomaly. In most countries, only the government, through a central bank, is allowed to issue currency.

But in Scotland, three of the four clearing banks can do so: Royal Bank of Scotland, Bank of Scotland and Clydesdale (the fourth clearer, which isn't allowed to issue notes, is Lloyds TSB Scotland). This is thanks to the Banknote (Scotland) Act of 1845.

Yet the letter of the law doesn't seem to clear the air of suspicion that can surround the notes when they are presented to retailers in England, Wales and Northern Ireland.

"The problem with Scottish notes is that people are not familiar or comfortable with them," says a spokeswoman for the Bank of England, whose own notes circulate freely in Scotland because there is not the same issue with recognition.

As a rule, "You are probably better off spending your money in Scotland instead of bringing it back," says Dave Roderick of the Trading Standards Institute. Alternatively, depending on the Scottish clearer whose notes you still hold, you can head into an English branch of that bank and swap it for a Bank of England equivalent.

Q: I have a clean credit record and recently paid off my credit card. But I have just received a mailshot from a company called Vanquis.

The interest rates on offer are scandalously high - nearly 70 per cent - and the card even seems to carry an annual fee, something I thought had been abolished.

Can they get away with this?

NR, south London

A: You're one of a number of readers to have contacted Sindie in the past two weeks about this card.

Like all lenders, Vanquis is out to win new business by using mailshots to target potential customers.

However, as the rates on offer show, this is one piece of plastic that you should take care to avoid.

The company says it is "bringing the benefits of credit cards to people who want a credit card with a relatively low limit that is easier to control than other cards".

That's putting it in its most generous light.

The card targets individuals who have been turned down by mainstream lenders, and charges sky-high rates on small balances.

For an initial credit limit of £150, the annual percentage rate (APR) works out at 69.1, including the annual £19 cost of having the plastic. To borrow £250, the card carries an APR of 58.6; for £500, an APR of 52.1.

Vanquis spokesman David Stevenson defends the card and stresses that, if you miss a couple of the monthly repayments, there are no charges to pay - unlike the terms set by other lenders.

The firm is a subsidiary of Provident Financial, which, along with car finance and motor insurance, offers doorstep credit.

If you do consider taking out another card in the future, your credit record certainly suggests that you'll qualify for a far better rate elsewhere.

Rip up the Vanquis application form now and throw it in the bin.

If you need help from our consumer champion, write to Sindie at The Independent on Sunday, Independent House, 191 Marsh Wall, London E14 9RS or email sindie@independent.co.uk. We cannot return documents, give personal replies or guarantee to answer letters. We accept no legal responsibility for advice.