Monday, January 27, 2014

Modern Banking

If you were a bank in serous trouble how much would you think of paying your CEO? J.P.Morgan is the bank in question and the lucky recipient of $20000000 is chief executive Jamie Dimon. Little wonder that half the world’s wealth is in the hands of no more than 85 people. Is the economic crises over then? Like hell it is and banks, despite being mainly the cause of it all in the first place still, are glad-handing and paying out ridiculous bonuses to people who obviously do not deserve them already having more money than they need-far too much in fact and in a year when the bank’s income is down substantially. Various scandals are involved of course but that’s banking, who’s surprised?
Some HSBC customers have been prevented from withdrawing large amounts of cash because they could not provide evidence of why they wanted it.
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.
Stephen Cotton, from Worcestershire, 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A year before, he had withdrawn a larger sum in cash from HSBC without a problem.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 wrote to complain to HSBC about the new rules and also that he had not been informed of any change.
“When presented with the withdrawal slip, they declined to give us the money because we could not provide them with a satisfactory explanation as to 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 wrote to complain to HSBC about the new rules and also that he had not been informed of any change.

“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”

Mr Cotton cannot understand HSBC's autocratic 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."
Peter, from Wiltshire, had a 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 phoned up the day before to give HSBC notice and everything seemed to be fine.
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.
Belinda is another customer who was initially denied her cash, in her case to pay her builder. She was told she had to provide the builder's quote.
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."
Other banks were asked other banks what their policy is on large cash withdrawals.
They all said they reserved the right to ask questions about large cash withdrawals.
But none of them 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 infantilises 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."
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Staff have been informed 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."

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 infantilises the customer. In a sense your money becomes pocket money and the bank becomes your parent."

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