Protecting Customer Deposits: What the Code Requires
Written by James Walker · Last reviewed 16 August 2026
James Walker has 2 degrees in construction (BSc (Hons) Building Surveying · MSc Environmental Design of Buildings) and an extensive background in issue resolution, resolving over £4 billion of consumer issues.
The short answer
- Core Criterion 11 requires that clients' money, deposits and pre-payments are protected.
- It is the hardest requirement to evidence, because it is about a system rather than a policy.
- "We have never had a problem" is not evidence of protection.
- The Home Improvement Code develops it further across three separate sections.
- Using Trusted Payments helps you qualify.
On this page
Why this criterion exists
Because prepayment is where consumer harm concentrates.
A customer who has paid in advance and then sees the business fail is an unsecured creditor, near the bottom of the queue, and likely to recover little or nothing. Card payments carry some protection through Section 75 or chargeback. Cash and bank transfers generally don't.
That's not hypothetical. Five household names have collapsed in seven years, and in several cases customers were left both out of pocket and mid-installation.
What "protected" actually means
Not a promise. A mechanism.
The test is what happens to a customer's money if your business stops trading tomorrow, and the honest answer for most businesses is that it's gone, because it went into the working account and was spent on materials for someone else's job.
Protection means the money is dealt with in a way that survives your business failing. That's the bar, and it's why a well-intentioned policy doesn't clear it.
How the Home Improvement Code develops it
The draft Code covers this ground across three sections: Guarantees, Insurance and Payment Protection, Secure Payment Mechanisms, and ADR Payment Protection Alignment.
Taken together, the direction is clear. It's not enough to hold money carefully; the arrangement has to be one an auditor can inspect and a consumer can rely on.
Why most businesses struggle with it
Because the other criteria are largely about documenting what you already do. Clear terms, honest marketing, a complaints procedure, those are writing tasks.
Payment protection is different. It usually means changing how money moves through your business, which touches cash flow, and cash flow is the thing a small trade business can least afford to get wrong.
That's the real barrier, and it's worth naming rather than pretending the application is all paperwork.
How Trusted Payments helps you qualify
Payment stages agreed with the customer before work starts, signed off by them before money is released, and a final 10% that isn't paid until the job is properly finished.
That is a mechanism rather than a policy, and it's inspectable, which is what the criterion asks for.
Related guides
Common questions
- Does taking a small deposit avoid this?
- No. The criterion applies to customers' money generally, not to a threshold.
- Is insurance enough?
- Depends on what it covers. Liability insurance covers damage, not prepayments.
- What if I take payment on completion only?
- Then there is little to protect, but few trades can run that way on material-heavy work.
- Does it apply to staged payments?
- Yes, to any money held ahead of work done.