HSBC imposes restrictions on large cash withdrawals

[Wilikon]

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.

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A year before, he had withdrawn a larger sum in cash from HSBC without a problem.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, as he told 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.' "

http://www.bbc.co.uk/news/business-25861717
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This. From the bank of the Mexican drug Cartel.

[DooMAD]

I keep telling myself I'm going to move my money out of the bank (I'm not with HSBC, but they're all shit really) and into a respectable and responsible building society, but then I remember it takes effort and none of the good ones are even remotely local to where I live.  The Move Your Money campaign is highly advised for anyone in the UK thinking (quite rightly) that their bank can no longer be trusted with their money.

HSBC should also be making the news because of the ~£10 billion black hole in their finances.  That's in the UK division alone, worldwide it's around $90 billion.  Most likely due to derivatives and other acts of so-called "casino banking".  HSBC will then no doubt go to the Bank of England to trade these bad debts for gilts and the Bank of England will print some more money, making the cost of living more expensive for everyone.

Also, the UK government seem to think that the solution for taxpayers not having to bail out a failing bank is to simply take the money out of their accounts if they have over £85000 in there.  Anything under £85000 is supposedly covered by the FSCS scheme, but whether they'd actually have enough money to cover a bank collapse is anyone's guess.  The bottom line is, they're making it legal to do in the UK what they did in Cyprus.  

Bare in mind, when you deposit money into a bank, strictly speaking, it's not your money anymore.  Your legal status is that of a creditor.  

[LiamSym]

I just read the BBC article, which makes it quite clear that HSBC have changed their policy to no longer require evidence for large withdrawals.

The policy is not to my liking, and I'm glad it's been reversed.

[shogdite]

Not sure why people still bank will criminal organizations like HSBC

[murraypaul]

Also, the UK government seem to think that the solution for taxpayers not having to bail out a failing bank is to simply take the money out of their accounts if they have over £85000 in there.  Anything under £85000 is supposedly covered by the FSCS scheme, but whether they'd actually have enough money to cover a bank collapse is anyone's guess.  The bottom line is, they're making it legal to do in the UK what they did in Cyprus.

a) There has always been a limit to deposit protection, they aren't making anything relating to customer deposits legal, what you have linked to is about commercial creditors and shareholders.
b) The limit for customer deposits was raised during the financial crisis.
c) The document you have linked to explicitly excludes customer deposits protected by the FSCS from the bail-in provisions.
d) The FSCS don't have enough money, because it doesn't have any money. This is not a defined pot like the US bank protection, it is a blanket government guarantee.
d) We don't have to guess if people's money would be protected in case a bank crash, we know, because it has happened. I had money in Kaupthing Edge when it collapsed. The UK government stepped in and transferred all my accounts, on the same terms, to ING. I didn't lose a penny. The system worked just like it was meant to.

[Spendulus]

I just read the BBC article, which makes it quite clear that HSBC have changed their policy to no longer require evidence for large withdrawals.

The policy is not to my liking, and I'm glad it's been reversed.

Good.

I was thinking of requiring HSBC to show evidence to me when I made large deposits.

Of what they were going to do with the money.

[Spendulus]

I had money in Kaupthing Edge when it collapsed. The UK government stepped in and transferred all my accounts, on the same terms, to ING. I didn't lose a penny. The system worked just like it was meant to.

unfortunately that doesn't have predictive value.

[murraypaul]

I had money in Kaupthing Edge when it collapsed. The UK government stepped in and transferred all my accounts, on the same terms, to ING. I didn't lose a penny. The system worked just like it was meant to.

unfortunately that doesn't have predictive value.

Shrug.
The government will compensate domestic savers up until the limit they have promised for the most simple political reason of all: Any government that didn't wouldn't be re-elected for decades. They will always choose to take the money from shareholders and commercial debtors instead, because that is the best political move.
This isn't the US where massive amounts of commercial campaign fund donations are required to be elected.
There are more voters who are savers than there are voters who are tax-payers. There are more voters who are tax-payers than there are voters who would be affected by taking money from commercial debtors.
Therefore screw commercial debtors before taxpayers, and screw taxpayers before savers.

[jonanon]

I was under the impression that it was certain members of staff from HSBC that misinterpreted the rules in place - asking for evidence was only meant as guidance never a must.

[murraypaul]

They were too lax about money laundering, and got hit with a big fine and embarrassment.
As a result, everyone became scared they their department would cause the next issue, so they because far too paranoid about money laundering.
Now that has caused embarrassment as well, they'll probably settle down somewhere in the middle.

[Wilikon]

They were too lax about money laundering, and got hit with a big fine and embarrassment.
As a result, everyone became scared they their department would cause the next issue, so they because far too paranoid about money laundering.
Now that has caused embarrassment as well, they'll probably settle down somewhere in the middle.

They were not "too lax". They knew.
A bank is never "embarrassed"

[guybrushthreepwood]

Not sure why people still bank will criminal organizations like HSBC

Most people don't know or don't care.

[hilariousandco]

Not sure why people still bank will criminal organizations like HSBC

Most people don't know or don't care.

Most banks are dirty in one way or another. Not really many ethical banks out there. Co-op was fairly respectable until they got sold off to hedge-funders. HSBC have billions invested in arms manufacturers.

http://makewealthhistory.org/2009/05/08/is-your-bank-financing-the-arms-industry/

[compro01]

HSBC - Shanghaiing your money.