Posted on 01/27/2014 7:44:07 AM PST by RetiredArmy
HSBC Bank Blocking Large Withdrawals Without ‘Evidence’ Of Spending Need
It seems that the bank, HSBC, has been a little overzealous in the implementation of some new, well meaning regulations, and now has egg on its face. Recently, some HSBC customers were prevented from withdrawing large amounts of cash because they could not provide evidence of why they wanted it. Apparently, customers were prevented from withdrawing amounts ranging from £5,000 to £10,000.
HSBC admitted it has not informed customers of the change in policy, which was implemented in November, but the bank says it has now changed its guidance to staff.
NEW RULES
Stephen Cotton went to his local HSBC branch this month to withdraw £7,000 from his instant access savings account to pay back a loan from his mother.
A year before, he had withdrawn a larger sum in cash from HSBC without a problem, but this time it was different. He told a reporter from Money Box: "When we presented them with the withdrawal slip, they declined to give us the money because we could not provide them with a satisfactory explanation for what the money was for. They wanted a letter from the person involved."
Mr Cotton says the staff refused to tell him how much he could have: "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 asked if he could return later that day to withdraw another £3,000, but he was told he could not do the same thing twice in one day.
He promptly wrote a complaint to HSBC about the new rules and also that he had not been informed of any change, and was told by the bank that they were under no obligation to tell him, explaining that “As 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.”
FRUSTRATED CUSTOMERS
Mr Cotton struggled to understand the bank’s attitude, and he was not alone. "I've been banking in that bank for 28 years. They all know me in there. You shouldn't have to explain to your bank why you want that money. It's not theirs, it's yours." He said of the incident.
Peter from Wiltshire, who asked that his surname be withheld, had an eerily similar experience. He wanted to take out £10 000 cash from HSBC, some to pay to his sons and some to fund his long-haul travel plans.
Peter called the bank the day before to let them know in advance, and everything seemed to be fine, but the next day he got a call from his local branch asking him to pay his sons via a bank payment and to provide booking receipts for his holidays. Peter did not have any booking receipts to show.
The following day he spoke to HSBC again and this time, having examined his account, it said he could withdraw the £10,000.
Two specific examples of a phenomenon that has been growing increasingly common.
CUSTOMER PROTECTION
HSBC has said that it was responding to the negative feedback about the new practice and evaluating how the policy was being implemented. "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."
Money Box asked other banks what their policy is on large cash withdrawals. All said they reserved the right to ask questions about large cash withdrawals, but none said they would require evidence of what the money was being used for before paying out.
Douglas Carswell, the Conservative MP for Clacton, is alarmed by the new HSBC policy: "All these regulations which have been imposed on banks allow enormous interpretation. It basically infantilizes the customer. In a sense your money becomes pocket money and the bank becomes your parent."
But Eric Leenders, head of retail at the British Bankers Association, said banks were sensible to ask questions of their customers: "I can understand it's frustrating for customers. But if you are making the occasional large cash withdrawal, the bank wants to make sure it's the right way to make the payment."
At the root is the question, “What is driving this unusual policy?” What could be happening behind the scenes to make something draconian and arbitrary like this seem like a good idea to the bank’s decision makers?
On the surface, there seems to be nothing, but a deeper look by people who would know, such as a group called “Forensic Asia,” which is a Hong-Kong based research firm, recently issued a “sell” recommendation for HSBC, on the basis of “questionable assets” on its balance sheet.
In a recent report by The Telegraph, the analysts involved actually worked at HSBC for some 15 years, and suggest that the giant bank could have overstated its assets by more than £50bn and ultimately need a capital injection of close to £70bn before the end of this decade.
They went on to say "HSBC has not made the necessary adjustments, during the quantitative easing reprieve...The result has been extreme earnings overstatement, causing HSBC to become one of the largest practitioners of capital forbearance globally... This charade appears to be ending."
I was once short on a mortgage payment because the escrow went up and I forgot to adjust. It was ~ $50 short.
The company tried to hit me with a late fee on the entire mortgage for that more than the amount I was short, but I gave them grief and they backed off.
A year later they went under and sold my loan to another mortgage comp.
If they called in the loan now I could just pay it.
I’m seeing the words “cash” withdrawal used there. So, are we to assume the policy applies only to cash transactions? If so, I would go online and electronically transfer all my deposits to another bank. Addios, baby!
/johnny
I like my credit union. Its not in the UK.
This is not a governmental law, that was my point.
I have an uncle who got some inheritance money, probably $30-$40K range and he deposited it in his local bank in Georgia where he lived. After a month or so he went down and wanted to withdraw $24,000 cash. He intended to buy a new vehicle and wanted to pay cash for it. He is old and stubborn and wanted cash money in hand. The bank refused him, told him no more than a couple of thousand dollars each day. He was fit to be tied and eventually pulled every penny out of that bank. This was in the 1990’s.
I had a friend who was a WWI vet and something of a loan shark in our community from the 1920’s to the 1950’s. He went in to pay off his house loan late one Saturday afternoon right before the bank closed. He paid it in full and the banker was wanting to leave and my friend said I will pick up the receipt paid in full next week so you can get home.
My friend went down to collect his receipt the next week and the bank was packed, bank run, the beginning of the Great Depression. My friend saw the banker and went to his office and said I am here to get my receipt and lien released on my house and the banker started carrying on that he didn’t know what he was talking about and he owed so much on his house still etc...
My friend not having any of this whipped out his revolver and pointed it at the banker and said a few choice words followed by hand over my receipt of you ain’t going home, which will it be? The banker handed over the receipt marked paid in full. From that day on this old guy kept very little money in any of the local banks and packed a gun until the day he died, he was quiet a character.
Yeah, ‘cuz someone could lose all their guns at the bottom of the lake if out in an un-needed bass boat, right?? (WINK WINK)
Thanks for posting.
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