European Metal Recycling (EMR) has found a solution to the scrap metal cash ban, by allowing customers to cash their cheques on site.

Legislation to ban all cash transactions for metal at recycling yards came into force at the beginning of this month (3 December) in the hopes of reducing metal theft by creating ‘a clear audit trail back to those bringing commodities into recycling yards’.

However, many smaller businesses are concerned that they have been given ‘no proper guidance’ in applying the new rules and fear that it will impact negatively on trade.

EMR’s response to the new law has been to create cheque-cashing points onsite, which means that customers paid in cheques (as required under the new legislation) will be able to immediately cash them in.

A statement released by EMR however, has outlined that this is not in contravention of the law: ‘EMR have developed a range of payment methods in response to the Legal Aid, Sentencing and Punishment of Offenders Act and the introduction of the cash ban from the 3 December.

‘Our objective has been to offer convenient, cost effective and above all legally compliant methods of payment. To achieve this we have introduced a range of payment methods including instant bank transfer, pre-paid card and cheque payment.

‘In the case of cheque payment, suppliers can either bank the cheque in their own account, or use a cheque cashing service. We have negotiated what we believe are the lowest costs on the high street with two leading cheque cashers. In addition we have teamed up with a leading UK PLC to provide an on-site cheque cashing service, offering both convenience and low cost.’

The statement goes on to outline that where the company is providing on-site cheque-cashing services, they are not ‘acting in [their] own capacity but as an Agent of the cheque cashing company’,

‘Before embarking on this course of action we took great care to satisfy ourselves that it was compliant with both the letter and the spirit of the law, including discussions with senior police officers and HMRC Home Office Guidance on the cash ban legislation clearly states ‘The over-riding requirement is for transactions to have traceability and to provide an effective audit trail’, EMR adds.

'Mockery of the new legislation'

With over 70 sites across the UK, EMR is one of the world’s largest scrap metal companies. However, several smaller traders are now even more concerned about the legislation, fearing that the solution offered by EMR will affect their trade.

Amy Bird, Director of One Stop Recycling and co-ordinator of a solicitor’s letter criticising the cash ban, told Resource: “I think having cash converters on site makes another mockery of the new legislation.

“It should have been made clear in the home office guidance that it would be legal to have cash converters in yards and subsequently guidance should have been issued on how to put it into practice.

“As has always been the case - fairness for all and a level playing field is what we need. Can we all become agents of cash converters? And is anyone in any authority willing to clarify this in writing.

“In terms of EMR, they have huge resources for research and development which has enabled them to put this system in place. In the interest of looking after the hand that feeds them it would have been nice if the research had been shared to those without the resources, however, in the cut throat world of scrap yards they chose to keep their cards close to their chest and that's their prerogative.”

However, EMR says that though the ‘fair degree of angst’ over the new law from other scrap metal dealers is ‘understandable’, it is ‘misdirected’.