CHINA OWNED HSBC AND OTHER BANKS NOW BLOCKED ACCESS TO YOUR CASH
Banks block access to your cash unless you can prove what it’s for
Bank brought in secret policy last November, which has led to complaints
Customers say withdrawals were refused or they were forced to barter
HSBC says policy is ‘responsible’ and allows them to tackle financial crime
By SAM DUNN
PUBLISHED: 11:31, 27 January 2014 | UPDATED: 01:43, 28 January 2014
Bank customers who try to withdraw large sums of cash over the counter face a grilling and may be asked to provide written confirmation of why they need the funds.
Under pressure to crack down on fraud, branch staff are increasingly demanding customers supply evidence of what they plan to spend their own money on.
HSBC last year introduced new rules which allow staff to block a demand for cash unless you can prove what it’s for.
This could include booking receipts, an invoice, a quote for work or even a letter.
Lenders including Santander, Barclays and the Nationwide Building Society also now reserve the right for counter staff to request such proof if they fear the withdrawal could be linked to fraud.
Banks lose £475million to fraud each year, according to figures from the Financial Fraud Action UK trade body. In particular, a rise in scams such as ‘vishing’ has put many banks on high alert.
Vishing – where crooks hijack a customer’s phone line and convince them to hand over their account details – can include persuading victims to withdraw large sums of cash over the counter.
Banks say they need to strike a balance between allowing customers easy access to their money whenever they want it, and fighting fraudsters.
If staff notice a rise in such frauds in their local area, they are more likely to introduce tough restrictions.
However, innocent customers have had genuine demands for cash repeatedly rejected.
Earlier this month an HSBC customer who wanted to repay a family loan was told he couldn’t take £7,000 from his instant access savings account.
Counter staff informed Stephen Cotton, from Worcestershire – a loyal customer for nearly 30 years who was well-known at the branch – he had to produce a letter as proof.
He told the BBC’s 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.’
A year earlier Mr Cotton had withdrawn a similar cash sum without any difficulties.
HOW THIS IS MONEY REVEALED THE HSBC BLOCK
On Thursday 16th January, This is Money – the Mail Online money section – revealed how one customer was blocked from withdrawing more than £1,000 over the counter in HSBC Swindon.
This was despite the fact he was more than £50,000 in credit. HSBC confirmed that it may ask about the purpose of a cash withdrawal when the transaction is large, unusual and out of keeping with the normal running of a customer’s account.
You can read the full story here: HSBC won’t give me more than £1k over the counter even after I warned them I needed it – can they block me from my own cash?
A spokesman for HSBC, which in 2012 paid £1.25billion to settle money-laundering allegations in the US, said: ‘Since November, in some instances, we may have asked customers to show us evidence of what the cash is required for.
‘As a responsible bank we must track all financial transactions. Cash presents more risk, and in particular financial crime risk, than other payment methods.
‘This is why 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.
‘However, it is not mandatory for them to provide documentary evidence for large cash withdrawals.’
All High Street banks usually ask customers to provide 24 hours notice for a large cash withdrawal of at least £5,000.
Barclays doesn’t have a policy of asking for proof but says experienced branch staff are able to ask for evidence if they have their own suspicions.
Eric Leenders, executive director at the British Bankers’ Association, said: ‘There is a clear tension between, on the one hand, providing customers easy access to their money and, on the other hand, protecting customers from the threat of a fraud that could have a devastating effect on someone’s finances.’