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
http://www.dailymail.co.uk/news/article-2546622/HSBC-accused-treating-customers-like-criminals-banning-withdrawing-large-sums-cash-wont-explain-for.html

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.’

2 comments

  • theunhivedmind

    Bank-Run Fears Continue; HSBC Restricts Large Cash Withdrawals

    Tyler Durden’s pictureSubmitted by Tyler Durden on 01/24/2014 21:31 -0500
    http://www.zerohedge.com/news/2014-01-24/bank-run-fears-continue-hsbc-restricts-large-cash-withdrawals

    Following research last week suggesting that HSBC has a major capital shortfall, the fact that several farmer’s co-ops were unable to pay back depositors in China, and, of course, the liquidity crisis in China itself, news from The BBC that HSBC is imposing restrictions on large cash withdrawals raising a number of red flags. The BBC reports that some HSBC customers have been prevented from withdrawing large amounts of cash because they could not provide evidence of why they wanted it. HSBC admitted it has not informed customers of the change in policy, which was implemented in November for their own good: “We ask our customers about the purpose of large cash withdrawals when they are unusual… the reason being we have an obligation to protect our customers, and to minimise the opportunity for financial crime.” As one customer responded: “you shouldn’t have to explain to your bank why you want that money. It’s not theirs, it’s yours.”

    Via The BBC,

    Some HSBC customers have been prevented from withdrawing large amounts of cash because they could not provide evidence of why they wanted it, the BBC has learnt.

    Listeners have told Radio 4’s Money Box they were stopped 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.

    The bank says it has now changed its guidance to staff.

    “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.

    Mr Cotton cannot understand HSBC’s attitude: “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.”

    HSBC has said that following customer feedback, it was changing 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.”

    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.”

    The arrogance is incredible…

  • theunhivedmind

    The Latest HSBC Scandal: An $80 Billion Capitalization Shortfall

    Tyler Durden’s pictureSubmitted by Tyler Durden on 01/16/2014 18:06 http://www.zerohedge.com/news/2014-01-16/latest-hsbc-scandal-80-billion-capitalization-shortfall

    Bank of New York Federal Reserve Federal Reserve Bank Federal Reserve Bank of New York NIM Quantitative Easing Stress Test

    Forensic Asia, a Hong-Kong-based reserch firm issued a “sell” recommendation on HSBC on the basis of “questionable assets” on its balance sheet. As The Telegraph reports the analysts involved actually worked at HSBC for 15 years and suggest the ginat 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. “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 forebearance globally… This charade appears to be ending.”

    Via The Telegraph,

    Forensic Asia on Tuesday began its coverage of Britain’s largest banking group with a ‘sell’ recommendation, warning the lender had between $63.6bn (£38.7bn) and $92.3bn of “questionable assets” on its balance sheet, ranging from loan loss reserves and accrued interest to deferred tax assets, defined benefit pension schemes and opaque Level 3 assets.

    The broker’s note is written by two of its senior analysts, Thomas Monaco (a former senior bank examiner at the Federal Reserve Bank of New York) and Andrew Haskins (previously worked at HSBC for 15 years).

    In the report, the analysts apply what they describe as a “moderate stress test” to the balance sheets of HSBC’s major subsidiaries.

    Taking the analysis further, the report sets out the impact of incoming Basel III capital rules and says HSBC could be required at a minimum to raise close to $60bn in new capital by 2019 and potentially as much as $111bn.

    “In our view, HSBC has not made the necessary adjustments, during the quantitative easing reprieve. Rather, it has allowed legacy problems to linger as new ones in emerging markets gather pace. The result has been extreme earnings overstatement, causing HSBC to become one of the largest practitioners of capital forebearance globally. This charade appears to be ending, given how few earnings levers remain besides selling off core elements of the franchise and the stringencies of Basel III compliance,” wrote Forensic Asia.

    The broker adds: “While having stated capital ratios well above peer averages is all well and good, HSBC’s stated capital ratios would appear to be nothing more than a mirage if our analysis is correct.”

    Interestingly, these findings do not include litigation costs which can only make matters worse. Of course, this kind of “mirage” is just as applicable to the entirely opaque Level 3 assets of all the majot TBTF US banks so one can only imagine just how large the capital shortfalls really are. But don;t worry – Cramer says NIM will be huge (but the banks themselves don’t)…

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