HSBC Bank Customers Told They Must Explain Large Withdrawals To The Satisfaction Of The Bank

250px-HSBC.svgHSBC customers are understandably confused in England after they went to the bank to withdraw their money only to be told that any large withdrawals would require disclosure of why they needed it and the agreement of the bank. That’s right, you need to show the bank why you need your money and the bank has been saying no to customers, according to the report below.

HSBC never informed its customers of the new policy and told irate customers that the policy was changed in November and “[a]s this was not a change to the Terms and Conditions of your bank account, we had no need to pre-notify customers of the change,”

That came as a surprise to Stephen Cotton who went to his local HSBC branch to withdraw £7,000 from his instant access savings account. That is a large but not particularly outrageous amount of money. He needed it to pay back a loan from his mother. The bank refused the withdrawal and asked for a detailed explanation. Then Cotton says the bank refused to say how much it would let him withdraw: “So I wrote out a few slips. I said, ‘Can I have £5,000?’ They said no. I said, ‘Can I have £4,000?’ They said no. And then I wrote one out for £3,000 and they said, ‘OK, we’ll give you that.'” He then asked if he could come back later and make another withdrawal but was told that he could not withdraw his money twice in one day.

HSBC has now responded to the backlash by tweaking its policy:

“We ask our customers about the purpose of large cash withdrawals when they are unusual and out of keeping with the normal running of their account. Since last November, in some instances we may have also asked these customers to show us evidence of what the cash is required for. . . . The reason being we have an obligation to protect our customers, and to minimise the opportunity for financial crime. However, following feedback, we are immediately updating guidance to our customer facing staff to reiterate that it is not mandatory for customers to provide documentary evidence for large cash withdrawals, and on its own, failure to show evidence is not a reason to refuse a withdrawal. We are writing to apologise to any customer who has been given incorrect information and inconvenienced.”

Thus, you will still be questioned about your use of your money but you will not have to prepare a formal presentation of evidence to support your request for your own money.

What I fail to understand is how anyone could approve the original policy and not be fired. I also fail to understand how banks continue to assume such seemingly unchecked authority. If a person has demonstrated their identity, why is the bank even allowed to question a customer on their use of their own money?

Source: BBC

43 thoughts on “HSBC Bank Customers Told They Must Explain Large Withdrawals To The Satisfaction Of The Bank”

  1. If allowed to stand, soon there will be demands for papers, please just to buy groceries. Banks hate cash. Cash makes you independent. At least, it used to.

  2. Nick, as the head of eToys in 2001, there were many discussions about getting into competition with PayPal by utilizing “fractional units as international currency” (the real dreaded, multi headed hydra of Europe, China and US of A).

    It is the policy of the oligarchy to push the limits of the masses, to the test, as often and as ludicrous as it can. For, if we are all screaming about polluted waters, in an entire state, while people are freezing left and right; no one will give a dang about the fact that Christie gave Ashcroft a $50 million no bid contract and Romney is taking more companies into an off shore tankers for those “protected” camps where children are sleeping on the floor with a port-a-potty hole 3 feet away.

  3. I see my post came in 4 minutes after it was written, as I was requesting that it be found. Yesterday, Glenn broke a story on the real time monitoring of facebook, twitter and blogs to name a few of the places they do this.

  4. I think several people have given correct answers here: 1. control over citizens 2. the banks are failing due to their gambling with customer funds via “legal” mechanisms various govts. have allowed them. 3. a testing of the waters for even more draconian measures taken by the state/corporate partnership.

    We live in interesting and very scary times.

  5. Many US financial institutions require a day or two advance notice for large cash withdrawals simply because they may need to order extra cash from the Fed for the day of the withdrawal. As to asking the reason for unusual cash withdrawals, in many instances (including the large credit union for which I worked prior to retirement) it’s an attempt to prevent unwary members from being victimized by scammers. One of our elderly members lost her home, her car, and over $300k in a Nigerian-type fraud, even after one of our senior VPs practically begged her not to send more money. In the end, though, the CU had no right or authority to refuse her access to her own funds.

  6. Dredd, While money laundering is a problem, the government has used that as a pretext to control, and eventually eliminate, the use of money.

  7. There are some similar dynamics afoot in the …

    The Bank Secrecy Act of 1970 (or BSA, or otherwise known as the Currency and Foreign Transactions Reporting Act) requires financial institutions in the United States to assist U.S. government agencies to detect and prevent money laundering. Specifically, the act requires financial institutions to keep records of cash purchases of negotiable instruments, and file reports of cash purchases of these negotiable instruments of more than $10,000 (daily aggregate amount), and to report suspicious activity that might signify money laundering, tax evasion, or other criminal activities. Many banks will no longer sell negotiable instruments when they are purchased with cash, requiring the purchase to be withdrawn from an account at that institution.

    The BSA was originally passed by the Congress of the United States in 1970, and amended several times since then, including provisions in title III of the USA PATRIOT Act. (See 31 USC 5311–5330 and 31 CFR Chapter X.) The BSA is sometimes referred to as an “anti-money laundering” law (“AML”) or jointly as “BSA/AML”.

    (Wikipedia, emphasis added).

    Remember to boil your frogs slowly so they don’t jump out of the pot before done.

  8. Laser, Are you familiar w/ Bitcoins. I read about these exchanges a few months ago. Ironically, there’s a piece @ the Daily Beast this morning about the government going after some people on this exchange.

  9. That reality, nick spinelli, of the mark of the beast being the pin number in your head and the card number in your hand, as the ONLY way to do transactions – is a lot closer than you think.

    BitCoin controversy is a snow job.

    If you think it was a rough day at the office, when you landed and they told you “No sir, you don’t have any car and/or hotel reservations; because it’s NOT in the computer”.

    Then, think of the day, the grocery store clerk tells you that;
    because the NSA sent all your money to Osama’s niece!

    N’est-ce pas!

  10. Given banks run now in fractional reserve banking, the fact HSBC Bank ask to be warned about large withdrawals can be understood in terms of wanting to preserve its money reserves.

  11. And Obama just had a moment of clarity. All deposits of over 5k have to be reported, how about just doing away w/ this pesky cash and have everything electronic so the NSA can track ALL of your habits.

  12. It is a corporate world of tyranny in which we, the many, live to provide exceptional comfort for the few. Just because they can no longer (openly) declare that someone should “off” our heads; is no good reason for the many to believe they are any where equal to the the few!

  13. Of course the REAL reason is that they are scared to death of everybody trying to remove their money at once – they do not HAVE that money – it is in their own
    investments which is not for customer’s benefit but for the bank’s benefit (or loss – ha !) – this is why the previous controls on banks used to be in place – they were not allowed to do this in prior days ! Anybody think they really want their money in a bank now – they are not responsible entities ! We should all get away from them asap – personally I am working on just that, but it is not simple, the little guy doesn’t know who he CAN trust any more !!!

  14. I’m sorry, but hasn’t it always been this way? I seem to remember language about the right to limit withdrawals when I signed up with every bank I’ve had an account with. Or maybe I am the only one who reads documents before signing them?

  15. What I fail to understand is how anyone could approve the original policy and not be fired. I also fail to understand how banks continue to assume such seemingly unchecked authority. If a person has demonstrated their identity, why is the bank even allowed to question a customer on their use of their own money?” – JT


    Testing the waters?

  16. Seems a bit too intrusive….. But in actuality our own banking laws with treasury, dea, ATF, CIA etc require notification of withdrawl of anywhere between 5 to 10 k…. Treasury is 10…. But the others get notification of transactions in cash 5 or greater….. Not sure what HSA has set at this time…..

  17. I wrote about this last month. The consensus – many are closing their account at this institution. If I recall correctly, Chase is pulling the same crap.

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