After Public Outcry From Customers, Britain's Biggest Bank HSBC Heads Off Complaints Over Small Business Account Closures (theguardian.com) 62
Julia Kollewe writing for The Guardian: HSBC has rushed to head off complaints from small businesses that found the bank had frozen or closed down their accounts as part of a crackdown on financial crime. Hundreds of small firms are thought to be affected, whose businesses range from an avocado importer to marketing and design companies. Britain's biggest bank, which has faced accusations of reacting slowly to the debacle, said that after becoming aware of problems in the past week, it was putting extra staff on its helpline and speeding up the process for dealing with complaints. It said staff were reducing the amount of time to unfreeze an account once a review had been completed. Earlier on Monday, Richard Davey, an HTML5 game developer and creator of Phaser, shared his ordeal dealing with HSBC, which had suspended transactions from his accounts without much explanation. It was only after thousands of users brought it to the company's attention on social media that the company fixed Davey's account, he said.
Lesson Learned (Score:5, Insightful)
Don't bank with HSBC unless you're a drug kingpin needing to launder money.
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Not the bank's job (Score:1)
Investigating crime and punishing wrongdoing is not the bank's job. They shouldn't be blanket freezing all these accounts themselves unless as a precaution because they have evidence of fraud.
Re:Not the bank's job (Score:4, Informative)
Is this post a joke, if not:
You do know banks keep history right?
you simply don't freeze the account until you have the evidence. That way you don't freeze random innocent peoples accounts, which can stop them doing things like buying food to eat, paying rent, etc. In the case of companies paying wages which mean employees can buy food etc.
Yes the fraud would continue for longer, but its not like it hasn't being going for a long time already.
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There's no way any for-profit bank is going to do that unless we *force* them to through regulation. A credit union is answerable to its members. A bank is answerable only to its shareholders.
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Investigating crime and punishing wrongdoing is not the bank's job. They shouldn't be blanket freezing all these accounts themselves unless as a precaution because they have evidence of fraud.
Depending on the jurisdiction this may just be the requirement of law. Financial institutions typically have a responsibility to monitor for unusual activity and act upon it, without notifying the customer, while the investigation is in progress. The challenge here seems to be a number of false positives and a poorly implemented process to identify and resolve these issues.
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Investigating crime and punishing wrongdoing is not the bank's job.
The British government places certain, strict responsibilities on banks when it comes to business accounts, especially when it comes to identifying who is the ultimate beneficiary. These requirements have changed quite a lot in recent years, with the last round of changes being as late as last autumn - here's a link to a relevant page on the government's official site: http://www.legislation.gov.uk/... [legislation.gov.uk]. It's sort of in the middle of the Money Laudering Regulations, but it sums up the gist of things: they ar
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Unfortunately our ruling classes have learnt that if you punish people directly using state power you run into all that due process stuff but if you bully private companies into doing it then you can punish people based on mere suspicion.
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Their "evidence of fraud" was companies sending money overseas in small amounts to places in Europe and China without reporting the transactions to the authorities. Which looked like money laundering. When added together, all those small amounts looked like large amounts. But the bank never gave customers any warning or questioning about the risk of accounts being frozen. So that makes them liable for business losses.
US, too (Score:5, Interesting)
The US does this, too. There have been dozens of stories of small business owners having their accounts frozen for "structuring," or making multiple payments or withdraws under $5,000. Transactions over $5000 are reported to the government, so it supposedly is "shady" if you are doing multiple transactions below that limit. Problem is, some people make these types of transactions during regular business. Once frozen, it's up to the business owner to prove to the government that their transactions were legitimate, which can take months, during which time they can't access the money in their bank, which usually drives them out of business.
Re:US, too (Score:5, Interesting)
Re:US, too (Score:5, Informative)
I don't run a small business, but the sheer incompetence of large banks like these are why I do my banking with a credit union. Any time I've had an issue, I've been able to resolve it in under five minutes. If you get to know some of the people who work there, they'd probably nip idiotic moves like this in bud.
It's not the banks doing it, it's the federal regulatory agencies. Small banks have to report this behavior, too. It's the regulatory agencies that are ordering the banks to freeze accounts.
Also, it's apparently $10,000 per transaction, not $5000.
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It's $10,000 cash daily, not per transaction.
Re:US, too (Score:5, Insightful)
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What's equally stupid: there is no sane reason why deposits under $10k should be signs of criminal activity. That's just people trying to avoid a hassle - in fact, some bank personnel will advise people not to cross that limit, because it makes more work for the bank to do the reporting.
And yet: It isn't that the US government then takes a look at your accounts. No, not at all: they'll freeze your accounts, and in many cases seize the money under asset forfeiture laws.
Which is basically banditry, backed up
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There's a very sane reason why deposits of under $10k in cash is a sign of criminal activity: it is often a sign that someone is trying to avoid the reporting requirements. This is usually done to hide unreported income or as part of a money laundering scheme. Any bank personnel advising people not to cross that limit are subjecting the bank to potential liability and giving their customers bad advice.
Why is it bad advice? By avoiding the reporting requirements, you've just created probably cause to believe
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Credit unions are great as long as you are their median demographic. They don't do as well with outlying customers and lag badly on technology. I was a very happy credit union member for ~10 years, but now they don't do nearly as good of a job as my other bank. The fact that I use two different banks apparently puts me well outside of their median customer profile.
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Unlike the US, the UK has something called the "current account switching service" (which covers personal and business accounts). For anyone affected by this, or anyone who thinks it's time to get out of HSBC, here's what you do:
1) Get HSBC to unfreeze your account
2) Pop into your local branch of Metrobank, talk to them and have them fill out the forms for you (other banks are also available, but stay away from FirstDirect as they're owned by HSBC, and the likes of Barclays and Natwest are about as bad as H
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As others pointed out, the limit is $10k.
My bank has an account manager that is required to understand enough of our business to be able to flag odd transactions. Open an account today as a one-man operation, and you will be asked questions like how much monthly income do you expect, expenses, average income and expense transaction sizes, percentage of cash transactions, and even seasonality and number of different customers. They also are required to understand what your business does. Hint: don't say i
Huh? (Score:5, Funny)
Oh - I forgot, big business crime is considered normal and good.
Seriously, HSBC might just be committing a damn fine crime by doing this..
Awp....There I go again - Any way to take little people's money is just good ethical business practice.
HSBC rotten to the core (Score:5, Interesting)
I experienced months of hearing nothing from them after opening an account online, the worst mobile app ever, nonsensical online password procedures, 30+ minute phone help line waits, and then to top it all off, an IRS form 1099-R delivered 2 weeks before the tax due date this spring.
If you ever come to realize that companies are a lot like people and they have their own personalities, then you will find that HSBC (and Wells Fargo) are senile old people who nonetheless still want to be seen as growing and profiting, but taking shortcuts and leaving behind sloppy messes of customer accounts in disarray and miscommunication.
Executives at the top who don't want to get into the details, and order things like, "I want to see customer numbers growing, and I don't care how you do it or what it takes! And it had better not cost us a lot to get it!"
I hope they get fined into the stone age so that someone realizes you can't run a bank on the cheap. Or at least, cheap in the functions that matter.
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My sister is with HSBC. We both traveled to Australia recently. First day shopping, her credit card gets hard blocked, I end up paying for her stuff for several days while she tries to get it resolved.
Idiots.
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"For a better experience, check out Ars Technica."
Nope. They are so wrong in so many of their articles that they're simply not worth the effort to read.
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not aggregated curated garbage from a shit American site that restricts speech.
Slashdot IS a news aggregator site, what the hell is you problem?
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Used to be the users decided the stories, which quite often would not show on other sites.
Now the fire hose is rarely looked at, and we get copies straight from HN. No joke, comparing every other 'tech website' front page right now, Slashdot looks more like HN than any other.
Banks are for suckers (Score:3)
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What a surprise, an anonymous coward doesn't know what he or she is talking about.
Over-reliance on cloud services (Score:4, Insightful)
I also view this story as a warning against an over-reliance on pay-to-play online services. What happens if it's not a banking issue, but a simple lack of funds that causes a scenario like this? Granted, with an online presence of any sort you can't exactly do completely without paid services, but at the very least, for example, if you actually own copies of your software that aren't tied to the cloud, you can simply choose not to upgrade them, and they'll continue working forever. Slack is handy, but it's a third party service that can, in theory, disappear at any moment. I've seen people building critical infrastructure into these types of tools, and I think they're insane.
Instead, having all these online services chewing at your bank account every month means you have few options when it comes to tightening your belt for a short period, something that nearly all small businesses run into at one time or another.
Paypal... (Score:2)
So what these business should've done is use not-a-bank Paypal instead, amirite?
</sarcasm>
Or apparently, being a bank doesn't shield you from the screwage Paypal does...
This just happened to me too (Score:3, Informative)
Unfortunately, I also have a business account with HSBC, and was brought into the 'Safeguard' process on 21 JUN (under threat of account closure).
After making an appointment, I spent a long time on the phone for a very detailed interview about by business and how funds arrive and why they leave the account. There were some oustsanding documents required, I was assured an email would be sent to follow up, detailing what was required. It never arrived, I learned later that the the person taking the call managed to miss-spell my email address and website, and the bounce of non-delivery wasn't understood/actioned.
After some time passed, phoning to enquire about status I eventually got an email request for more information on 2 AUG, that I supplied. After 7 days I asked for an update, I got a HSBC response that the review is with the Processing Team. This matters, as the people you can actually talk to are HSBC, it seems communication is all never direct between Processing Team and us, the customer. Anyway, 18 days later I declare my unhappiness by email, and get .... nothing.
On 30 AUG I get another request by email for info, that I reply to, and ask for an update given the near zero communication. A few days into SEP I get the final notice:
"IMPORTANT NOTICE: Suspension of your payment services and closure of your HSBC Business Banking / Corporate accounts."
Well **** me, stuff got real. I phone HSBC (they cant respond or comment because the processing team is dealing with it and there is nobody available). Awesome.
Despite continued efforts to communicate with HSBC over Safeguard, their inability to communicate effectively with me, has resulted in my business accounts being put on notice for closure! At this point, one has to start implementing contingencies, as there is now a very real chance that this ineptly implemented bank process will actually kill my accounts / business.
I'm gob-smacked by how this process has been handled, what the hell is wrong with these people? I've logged a formal complaint for the good it will do. Meanwhile, contingency planning is now in action - I can't put faith that I will receive a letter that this was all a terrible mistake. I have 8 weeks from now before my business gets killed.
If you use HSBC for business banking and receive money from all over the world, be very afraid, they are not in your corner. Diversify your business banking as a matter of priority, no one bank should hold all your company assets and payments.
Sounds like ... (Score:2)
We (the USA) have FATCA [wikipedia.org] to keep individuals from banking overseas. And Britain now has Brexit to accomplish the same.
Meanwhile in the Land of the Free (Score:2)
Meanwhile in the US, the Federal Government was forcing banks [washingtontimes.com] to close/freeze accounts of some businesses. Ah, and the taxmen are empowered to confiscate personal accounts on mere suspicion of wrong-doing [nytimes.com].
Here in India..... (Score:2)
Big banks for big business (Score:2)
And small banks for small business. That's the only way it can work. Big banks don't care about little businesses, because SMEs are a rounding error in their accounts.
When my wife and I wanted to expand our tiny business by buying a property, we were still with a big bank (UBS). First of all, whenever we needed something, we always had a different advisor, who was obviously the newest and least experienced person the bank had. Anyway, we sent a written summary of our idea to the bank, got a written rejectio
HSBC should die (Score:2)
Ah, yes, these SOBs, a few years ago, but the right to service a card I'd have, which had been sold at least two or three times, but was owned by another company when they "serviced" it.
And they cranked my interest rate up to, IIRC, 25.9%, and then, when I didn't use it for about a year because of that, and they wouldn't lower the rate, they cancelled my card.
But wait, it gets better: they sent a letter informing me of this, and when I wrote back to complain, the USPS bounced it, no such addressee.
AND this
People getting what they deserve (Score:2)
This is what happens when you use a bank instead of a credit union. Why is this concept so difficult for some people to comprehend? It just happens over and over and over again...