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. Outrageous HSBC Settlement Proves the Drug War is a Joke
    By Matt Taibbi
    POSTED: December 13, 2012

    If you’ve ever been arrested on a drug charge, if you’ve ever spent even a day in jail for having a stem of marijuana in your pocket or “drug paraphernalia” in your gym bag, Assistant Attorney General and longtime Bill Clinton pal Lanny Breuer has a message for you: Bite me.

    Breuer this week signed off on a settlement deal with the British banking giant HSBC that is the ultimate insult to every ordinary person who’s ever had his life altered by a narcotics charge. Despite the fact that HSBC admitted to laundering billions of dollars for Colombian and Mexican drug cartels (among others) and violating a host of important banking laws (from the Bank Secrecy Act to the Trading With the Enemy Act), Breuer and his Justice Department elected not to pursue criminal prosecutions of the bank, opting instead for a “record” financial settlement of $1.9 billion, which as one analyst noted is about five weeks of income for the bank.

    The banks’ laundering transactions were so brazen that the NSA probably could have spotted them from space. Breuer admitted that drug dealers would sometimes come to HSBC’s Mexican branches and “deposit hundreds of thousands of dollars in cash, in a single day, into a single account, using boxes designed to fit the precise dimensions of the teller windows.”

  2. it smacks of the uber thieves making sure we are going to keep paying for the lavish lifestyles from now thru eternity. from us to our descendants is what it really smacks of. and it will stop when the people realize the irs is a illegal entity..

    this is just one, keep clicking the videos and see just how many of their agents realized the truth and quit.

    the only reason the irs has been allowed to flourish is because of the lies they have managed to tell and the very few they have jailed… imagine what would happen if NO ONE FILED. what are they going to do? put the whole world in prison? i would love to see that……

  3. HSBC employees should have been prosecuted for money laundering. See . While I have no personal knowledge of why HSBC and its employees escaped prosecution, it would not surprise me if one factor was the possibility of information embarrassing to the regulators/government being made public if criminal charges were brought. Even if you believe that DOJ was genuinely concerned about HSBC being “too big to fail,” such a concern, if it was genuine, does not explain the failure to criminally charge individual bank employees.

    The prior misconduct of HSBC employees illustrates that the management of this bank leaves something to be desired. So it is no surprise that the management of this bank would come up with this type of boneheaded policy.

    I deal with Title 31 matters, civil and criminal, with some regularity. I’ve seen a number of businesses get slammed by the government for alleged structuring of deposits. IRS Special Agents can and do obtain a warrant to seize the funds in the account in which the alleged structuring occurred and seize all funds in that account. More often than not in the matters I handled, the majority of the money seized by IRS was returned to the business. But the effect of the seizure on the businesses was traumatic. None of that would have happened had the businesses regularly made cash deposits of more than $10K and completed the required paperwork for deposits of over $10K.

    Guess again if you think you have escaped government detection by making multiple withdrawals (or deposits) of less than $10K in cash over a relatively short period of time. That conduct probably was reported on a Suspicious Activity Report submitted to Treasury by the bank and could lead to seizure of funds in the account per the previous paragraph or criminal prosecution. If you want to get an idea of how Treasury regulates businesses under Title 31, go to and look around.

  4. To add to Porkchop’s response, tellers also are on watch for financial crimes such as elder abuse and scams like those Nigerian princes and lotteries you never entered.

  5. ModernMiner:

    I hate to break it to you, and, much as you may not like it, your multiple withdrawal strategy is a felony. 31 U.S.C. 5324 .

  6. I wonder if ” I no longer trust you with my money and I don’t like the way you treat people” would be a suitable answer for them.

  7. mespo:

    Perhaps the standards are different in the UK?

    While most customers don’t really appreciate the distinction, in the U.S., a savings account is a time deposit, not a demand deposit. Banks are allowed (in some respects, required) to limit withdrawals from time deposit accounts in both frequency and amount. In fact, if the deposit agreement so provides, they can delay paying the customer even when the account is closed. The negotiable order of withdrawal is a relatively new (1980’s) phenomenon.

    Checking accounts are a different matter — because they are demand deposits, negotiable instruments drawn against checking accounts must be honored “on demand”.


    While the quoted material from Wikipedia is technically accurate, it is somewhat misleading. Banks kept track of purchases of negotiable instruments for cash or otherwise long before there was a Bank Secrecy Act. There has always been a line on a cashier’s check or bank draft for the name of the remitter — and good practice of double entry bookkeeping generally requires an audit trail in order to preclude forgery, anyway.

    The description is under-inclusive as well; banks are also required to be aware of cash transactions, including deposits, of less than $10,000 in order to report “structuring” — that is, breaking up a single transaction into a series of transactions in order to evade the reporting requirements. There are exemptions available for businesses that transact business in cash on a regular basis (places like convenience stores, liquor stores, casinos, etc.).

  8. $10K or more in a single withdrawal or over the course of one business day from a single institution in the USA requires notification of the Feds as per the Bank Secrecy Act of 1970 (another egregious and overbearing law courtesy of your Congress). A CTR (Currency Transaction Report) will be filed by your institution with the IRS, but one can still withdraw the funds. This is one reason why if I know I’m going to need more than $10K cash at any point (such as for a coin show), I’ll make a series of withdrawals under $10K over multiple days until I’ve got the amount I need. Or I’ll withdraw from multiple institutions. There is no reason Uncle Sam needs to be in my business when I’m perfectly within the law.

    However, if I was confronted with a policy similar to HSBC, my response would be “all of it, as I’ll be changing banks”.

    I stopped doing banks the favor of making money from my money in the early 1990s and have used credit unions exclusively since.

  9. I wonder if depositors could set up a checking account with the bank, transfer funds to checking and then write a check to their spouses. The bank would have to honor this withdrawal if there were sufficient funds.

    I would stop doing business with a bank that had such a policy as I too would be worried about the solvency of the bank.

  10. They’re just trying to sort out their real customers (money launderers) from the unprofitable hoi poloi.

  11. Once you get bogged down into “what” constitutes the right/large amount that the bank may ask you personal/private questions concerning the withdrawal of your own monies;

    then you’ve already lost!

  12. Robin, Bingo!! And, the government wants every cent of tax they believe they are owed. I live in a very liberal city. I have had liberal friends tell me the govt. has a right to keep track of me to make sure I pay every cent of tax. Now, I am hyper vigilant because my wife was a Federal Probation Officer. But, that mindset is frightening. Taxes are like a sacrament to tax and spenders.

  13. “. If a person has demonstrated their identity, why is the bank even allowed to question a customer on their use of their own money?”


    There are various types of accounts but I assume we’re talking savings accounts. There’s a misconception around that savings account deposits remain your money. They don’t. Bank deposits become accounts payable by the bank who then takes your former money as its own and invests it deriving returns on those investments. The money is shown by the banks as its asset and not yours. Your asset is the account receivable which you obtained when you deposited the money. Your withdrawal constitutes your demand for payment of the debt owed you by the bank. Bank’s routinely limit withdrawals but I have never seen the limit enforced this way.

  14. cash means they cant track you. so therefore they don’t know your business and the corporation does not like that. the banks have the nerve to talk about stopping fraud.? i wonder how many realize that hsbc are the initials of the hong kong and shanghai banking corporation which is located in the united kingdom…….

  15. We need land mines. Then we can place one over the waterproof vault we have buried. My land mine works by remote control or by disturbance.

    This is another example of that Convergence thing that some economist articulated years ago. The capitalist countries will get more socialist, fascist and the communist countries will go more capitalist and libertarian. Which is why Snowden is in Russia not Sweden.

    These Brits need to teach that bank about Bailouts. Bail Out Now Like Your Mother Should Have.

  16. This is the next most obvious step in the same direction of the Cypress fiasco.
    It would seem to be a business suicidal policy for any bank that wants cash depositors. Who would deposit, or keep an account with a bank that will demand you explain what you want your money for, when there are banks that will not.
    I think selling HSBC stock short would be a great idea now.

  17. This approach by HSBC is disgusting, but here in the states, the Bank Secrecy Act does not require that the bank ask where the money is going if it is over $10,000. They have to file a report that large sums were withdrawn. Remember that when you deposit money into a bank, you no longer own that money. The bank owns it and you become an unsecured creditor of that bank. Stay away from large banks and stick with neighborhood banks and credit unions. They park their funds “overnight” with the Feds, but they are a safer bet.

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