I think this is a huge problem and one that is going to continue and get worse. How is it the banks were the ones at fault, but the customers are paying for it. They just hide behind AML / Knowing your customer and say talk to your MP.
I was locked out of internet banking for my business account with Lloyds for over 3 months due to a technical fault in the way it was setup. Was paid compensation in the end, but already had moved to another bank. They could not have cared less.
Some people will say no smoke without fire, but if you read on moneysavingexpert about people being locked out of their personal accounts for the same reason. Any transfer that is slightly different from your day to day will be flagged and risk having your account locked for weeks / months on end.
It happens more than we realise. A bit like winning the lottery, it could be you :(
The further we go down the road of electronic payments, and a cashless society it could get really messy.
The only way to solve in the short term is to spread the risk across many banks, and never keep your money in one place. Keep hold of some cash!
I have to pay for my linodes on the gf's credit card because HSBC randomly lock my card for suspicious payments.
That payment has gone on the same day of the month to the same place since 2009 and they still randomly do it. Last time was three days before Christmas.
Linode credit card info has been hacked so many times that I'm not surprised that HSBC is doing this.
For any other service, I'd be upset if my bank did this, but Linode is quite literally the least secure paid service I've ever used. I've had multiple credit cards compromised as a direct result of multiple Linode hacks.
Can you substantiate this claim at all (its an unfair question but still)? In todays day and age I wouldn't put it past a close competitor to make posts like yours on tech forums.
Just Google "Linode hacked" and scroll to your heart's content.
The worst incident in my opinion was in 2013. Credit card numbers and password hashes were compromised, and Linode actively denied it until the hackers literally showed proof (which was linked to on HN at the time iirc). I remember reading chat logs that painted Linode as extremely negligent towards security.
The last time Linode got hacked while I was still a customer, I learned about it on HN from a third party before Linode even publicly acknowledged the incident. I decided enough was enough, and switched to a less cost-effective provider with a better security track record.
In so many ways. As a matter of principle I refuse to make business with that bank (living in Mexico). I cannot think of giving even one peso for a corporation that is actively helping something that hurts my country so much:
At the end, they 'settled' and thus continued with life as usual. Even if my single "grain of sand" is worthless for HSBC, at least I keep my conscience clear.
I am afraid all major banks have departments involved in shameful business practices such as this very sad example.
Let's pick a supposedly "ethical" very small french bank, the "credit cooperatif"'. As their name implies, they offer ethical financial tools, which forbids child labour or any other shameful practices. So apparently if you select that bank you do not support drug cartels money laundering and your money is invested in environment friendly companies.
So far, so good. Except they are a subsidiary of banque populaire, a larger but still "somewhat ethical bank"'. Banque Populaire has merged with Caisse d'Epargne. The BPCE group is the main shareholder of investment bank Natixis which has a not so ethical track record and a huge building on the kirchberg plateau in Luxemburg. Let's just say they did not choose that building for the view on the european court of justice which is across the street.
And by the way, bpce also own a much smaller "banque des mascaraignes" which is headquartered in Mauritius. I am not exactly convinced they are in the business of supporting Mauritius economic growth.
So which is "better", hsbc which was apparently started to deal with opioids between China and the UK and is regularly accused of shameful business practices or a clean small bank which is in fact a front for a large bank with a track record on par with hsbc? I don't have a definitive answer on that ethical question.
No sources because I'm on mobile atm but everything can be fact checked through a few google queries.
> The only way to solve in the short term is to spread the risk across many banks, and never keep your money in one place.
This is always good advice, and when you reach the maximum amount for which an account is insured (100K or thereabouts) it is an absolute must. I have my funds spread over five accounts just in case and make sure you note the legal differences between savings accounts and current accounts, the latter may not be insured in case the bank folds depending on where you are.
Joint accounts are also insured at 250k per person per bank and count separately from individual accounts. So a couple can have 3 accounts 2x 250k + 500k in a joint account at the same bank.
Banks fail regularly the FDIC has a lot of practic dealing with this. Generally the assets are sold off and most of the same branches are open the next day under a new name. Checks are processed using the old account etc.
It's possible for things to take significantly longer than that, but your quickly talking about lightning strike odds.
However, I would definitely use a separate institution for investment accounts which would worse case let you sell off some stock.
If you have 500k in cash in a normal bank account, you are either so financially illiterate that you absolutely need a financial advisor or you are rich enough that you can easily afford a financial advisor.
Or you are saving for a down payment for a house in the Bay Area? There are plenty of other good reasons why someone who wasn't rich would have 500k in the bank without significant other investments.
500k as a down payment? Yeah... that would come under rich.
In that situation you either are rich enough to save that much AND/OR are rich enough to afford payments on a house where that is a sensible down payment rather than a transfer of equity from a sale.
I'm very very curious what your idea of an expensive house would be. I only ask because I (and probably most) view $500k as a downpayment as impressive.
The best way to describe my perception of this type of mindset is that reading your comments reminded me (in a non-negative way) of reading https://redd.it/67zv7a, a serendipitous thread (which I found via https://redd.it/682xc3) that veered off into an interesting discussion about the relative views of being rich.
Myself, I've never experienced this personally, which is why I perk up and take notice wherever I see it.
Nah, that's not really true. If you have 500K (especially excluding retirement accounts) then you should really have it under management (robo, yourself, a fiduciary, whatever). The S&P is up 10% on the year so far, so that's $50,000 you could have made 1/1 through present. Obviously not a guarantee of future performance, and caveats apply, but that kind of money definitely has the potential to make more money, but not when in your 1% APR savings account.
There are people of there who don't think the market is in a good state, or who are saving for a house, or for whatever reason want to stay liquid. The banks will treat you a bit better with that much in an account (they will assign you a relationship manager at Hsbc if you are at premiere level), but not very much.
I personally accumulated savings in RMB and had no decent investment options until recently. I know I can't afford anyone more than the guy at the bank who wants to take you for a ride. Everyone's situation is different.
This is strongly dependent on the legal entity the OP has chosen to do business with the bank. For some of those there is no coverage, for others the coverage is the same as if the account is a private account. Typically as soon as you incorporate things change but it is very well possible that a small company that is not incorporated (basically an individual trading as a company or freelancer) does have deposit insurance.
Regardless it is good practice to know exactly what the state of affairs of your bank accounts are and to really spend some time to read the fine print regarding balances and what will happen to them if the bank should go under or cease operations for whatever reason.
In NL by the way DNB will guarantee business accounts as well.
I think part of the problem is banks don't make much money from the average account outside of fees. I would rather banks just charged say 20$ a month and had actual customer service instead of the mess big banks evolve into.
Banks already do that for business accounts. Actually depending on the type of account it could be much, much more than that.
For reference I used to pay close to $10 / 30 days to have a business account open in Australia. Note that I said every 30 days, not every calendar month. This makes it slightly more expensive than you think.
Retail customers are the cheapest source of capital for BB. I remember directors would laugh about it when it was brought up. Banks are not doing retail (any) customers any favors.
> How is it the banks were the ones at fault, but the customers are paying for it.
Market power. There are economies of scale in banks, so there are few banks which are huge and can generally afford to act shittily to their customers (unlike in competitive industries).
For the record, I don't think breaking up the banks or capping bank size will fundamentally solve the problem either.
Rather regulation. Banks have been hit with multi-billion dollar fines because they conducted business with the wrong people. Closing "good" accounts is less risky than paying exorbitant amounts because you failed to do so.
That saved me in the 2007 crash, as one account of mine got frozen for a year. Just like it's a bad idea to put all of your investments into one stock.
After having similarly-frustrating things happen with my HSBC personal accounts over the years, I fully support this suggestion. They are awful. They take extreme steps (suspending accounts, rejecting payments, etc.) without contacting the customer; when you reach out to them, it's hours of being passed around before you reach the right person. If you reach a person at all.
Had HSBC screw over a co-worker. Someone, somehow, transferred money through his account. A fair sized amount, in and out within an hour.
He reported it and they suspended his account immediately while they investigated, which is fine. What wasn't fine was it took them well over a month to investigate, in the mean time all of his money was locked up tight and he was unable to access it, pay rent, buy lunch etc (we ended up shouting him for meals for a bit to help out until work organised an advance on his salary). In the end he really regretted 1) having all his money in a single account, and 2) ever having bothered telling HSBC about the transfer.
How can someone else other than the account holder transfer money out of that account? Based on my experience anyone can transfer money in to an account, but only the account holder or an authorised user can transfer it out.
It was probably bank error. Then it took a month for the bank investigation unit to find the internal bank staff that made the error and get an explanation.
The best banks for consumers are the mid sized banks. They're big enough to have all the services, but not the bureaucracy.
It's different for every country but for the article's example of the UK, Jeremy Clarkson put his bank account details in a column and got owned by someone setting up a direct debit from his account https://www.theguardian.com/money/2008/jan/07/personalfinanc...
Clarkson wasn't doing the bank any favors by posting his info, however this is the bank's failure to properly verify the transaction(s). The bank was tricked, and the bank is responsible for this error. It's fraud, plain and simple.
The article ends with him saying "I was wrong and I have been punished for my mistake" but this is just his schtick, it's factually incorrect.
I live in a small community and many local charities and non-profits post their bank info online, so that people may make donations by bank transfer or standing orders. Fraudsters periodically manage to trick the local banks into transferring money from the charity accounts and everyone freaks out, which is complete bullshit. The banks always restore the funds, and scold the charities for having this info online. I've experienced this myself at two different organisations. As a result charities become more reluctant to publicise their bank info and predictably, donations lessen.
It's important to keep perspective and hold the responsible party accountable, instead of trying to compensate for the bank's failings.
Yeah, direct debit is the only way I can think of this to happen where it is not a bank error (like in a previous reply). While certainly a convenience, I am still a little bit wary of allowing any company to automatically take money out of my bank account directly.
Having an automatic credit card payment is something slightly different though.
Yeah this is quite strange. I know I can send my money to any account I want to. But from there it's not my money anymore, I can't send it further. Perhaps it was some social engineering hack.
With all their bad press, I'm actually kind of surprised anyone would purposely open an account with them right now. I'm not even up-to-date on whatever crap they're pulling today, but they're on my mental list of "companies I keep hearing bad things about".
When I tried to open a bank account having just moved to the UK, Barclays wanted me to wait two weeks for an appointment. HSBC had me signed up with money in my account on the same day. My debit card worked in a week.
I have an HSBC account because at the time I moved to the Uk (2004) they had a mechanism in place so you could set it up as part of the application process. I don't remember the details but it was standard for everyone to just do it all before leaving NZ.
I bet a lot of people are in a similar position. Not that I really use the account now, I have a far happier time in my Barclays account. I actually have a real hate for HSBC.
They offered competitive rates for online checking and savings accounts about a decade ago, which is what captured my attention. I moved all of my finances over to a credit union a few years ago, but have left my HSBC accounts open because closing them may negatively impact my credit (which is ludicrous). I have a combined two cents in my HSBC accounts; I move the pennies around every few months to avoid being shut down for inactivity.
If you're talking about a checking or savings account, you can safely close it without it affecting your credit score.
Closing a credit account could affect your score, but unless your checking account has a credit product attached (e.g. an overdraft protection line of credit) that gets reported to credit reporting agencies, it won't have any impact.
You can use https://annualcreditreport.com once per year to get a copy of your report from each of the three agencies (Equifax, Experian, and TransUnion). If your HSBC account doesn't show up on any of those reports, you can be assured that closing it won't affect the scores generated from those reports.
I doubt closing a credit account hurts your score. Even if it does, you'd be more credit worthy to a lender because you have less credit outstanding/available. And the credit score can improve later if other credit is operating normally.
Credit score is only one item they look at for large loan like a mortgage. Smaller loans like a car or credit cards are already easy to get.
Credit scores depend in part on the ratio of your credit balances vs. available credit. So in that sense, closing an account can reduce your credit score since you now have less available credit.
I don't know how much impact it has, certainly less than late payments or accounts in collections, but it can have some effect.
It certainly can hurt your score. One small but real component is the average age of account.
Also, ratio of credit used to credit available is also a negative signal, which would increase when you close an account.
Those are somewhere between minor and middling factors. It's stupid we have to play the stupid credit score game, but a small decrease in interest rates can save you thousands when it comes to your mortgage.
Oh gosh, that's a tough lesson to learn. We don't select business banks on the basis of fee competitiveness we select them based upon customer service. The two appear to have an inverse correlation. Funny thing is, the banks with low fees IME make it up in the "small print" fees.
Two things I don't bargain hunt for anymore: Insurance, and Banks.
I bank with them and will continue to do so for a while.
years ago, they were the only bank to open an account with my history from another country. all other us banks had the same bullshit "you won't even have a credit card with us until you have credit history in the us, even though we have branches in the country you have history".
then they were the only ones offering investments with no administration fee and with returns above the monopoly of .5 point under official inflation. they were actually 1 point above.
but yeah, every time I travel and forget to tell them before, my card get lots locked. and they claim they didn't call me before locking because it was sleep hours in my home timezone, in case I wasn't really traveling.
also driving in the us, every time I stop in a motel 6 and such, locked card.
The constant locking when traveling has been my experience, too. Every time I moved, I would tell them in advance... only to have my card declined at the first gas station. And the next. Etc. I eventually started traveling with a wad of cash so as to ensure that I wasn't going to be left in a ditch somewhere with no money and a truck full of my belongings. Traveling with cash is not the safest thing to do, but they left me with no other choice.
I've never worked with a bank that tried so hard to keep me from my money.
Strange. When this happens to me, Hsbc will send me a text message asking me to confirm that I made the transaction or nor. I simply reply YES and it's done.
I hailed from Europe to USA in 2003. Got SSN, went to first Bank of America branch and opened account with $100 initial deposit. No problems at all. Credit Card was tricky - yes many banks will tell you "bad credit is better than none", but after 60 days of direct wire from my employer to the Bank, they gave me secured $500 Amex. That was enough to show them for the next 60 days I used it and paid on time. Within 3 month from getting SSN and my first banking and working legally full time W2, I already got "you are preapproved for credit card" letters in my mailbox.
2 years later I opened Business Account with Bank of America and never had problems with them since then (online sales-related business). Not to say they are perfect, as BOA was known to claim they own properties (by mistake) and being stubborn in courts even if they knew they are wrong.
Great read, thanks! This exactly shows how dirty each bank is, whether its Chase, Wells Fargo, Bank of Ameirca, or any other major bank, and that system IS broken, corrupted, and only gives slaps on the wrist for things you and me would spend rest of our lives in Club Feds.
The only reason I'm resultant from switching to something smaller is the number of ATMs available; otherwise my choice would bt BB&T.
Wait, they made you wait 2mo, using their account as your paycheck direct deposit, for a credit card with only $500 of approved credit, which you then have to use for another 2mo, just to have any decent credit with them? ..and you are praising them?!
on most banks the offer letter will already give you a $500 credit.
Then you go into a special category, where you go from fighting to find a person to talk with, to having banks designed to more easily accommodate your dropoffs.
> Breuer admitted that drug dealers would sometimes come to HSBC's Mexican branches and "deposit hundreds of thousands of dollars in cash, in a single day, into a single account, using boxes designed to fit the precise dimensions of the teller windows."
So lame:
> Though this was not stated explicitly, the government's rationale in not pursuing criminal prosecutions against the bank was apparently rooted in concerns that putting executives from a "systemically important institution" in jail for drug laundering would threaten the stability of the financial system.
>I don't think drug cartels have any trouble finding banks that will accommodate them.
I would also believe that drug cartels have somehow more convincing/effective ways ;) to get their money than sending an e-mail to the "Safeguarding" people.
Their online banking is truly appalling, too. No full history of past payments to make a repeat payment easier. Weird distinction between 'current payments' (or whatever they call the default 'account' screen) and 'past statements' — seems like a hangover from the days when we used to get paper statements. Still a crazily short session timeout.
I would add to the list, but I can't login to my account at the moment since I don't have my bespoke HSBC 2FA physical device (despite having a far-superior, non-polluting equivalent on my phone...)
I have no problem with a 2FA for sending money, but for just looking at my statement it's crazy. I too stopped using HsBC - after about 15 years (from when it was Midland bank), when that was introduced.
> I would add to the list, but I can't login to my account at the moment since I don't have my bespoke HSBC 2FA physical device (despite having a far-superior, non-polluting equivalent on my phone...)
If someone banks and does 2FA on the same phone, if the phone gets hacked (malicious app) you have a big problem on your hands.
I think the chap has been incredibly calm about the whole thing. I'd be in my local branch every day refusing to leave until they take the necessary steps to re-open the account.
This really struck a nerve with me, as I've had similarly infuriating experiences with Natwest (though never to the point of my account being suspended).
Passed from one team to another -- and even witnessing colleagues from different teams argue with each other, not realising that I wasn't properly on mute... I wish I had it recorded.
Opening and administrating a simple small business bank account has been the single most unnecessarily difficult and frustrating thing about starting my own business.
It's why I'm so passionate about someone FINALLY disrupting the circle jerk of the mainstream banking industry and the organisational, bureaucratic and regulatory clusterfuck that it has become.
So, immediately get on the horn with your lawyer and have your lawyer on his letterhead send them a letter and if the response is not to your liking sue the bastards.
In the meantime set up another account with another bank and make sure all invoices that are pending but not yet paid are paid into that account and not into the HSBC account.
Then shift over all the monthly payments to the new account as funds appear.
Lawyers are expensive, and bank accounts have complicated T&Cs which basically say "We can do what we like, and fuck you."
You'll spend a fortune paying someone to argue some or all of the agreement is unenforceable.
I would suggest trying to get in contact with other businesses in the same boat. The UK doesn't have a formal class action suit mechanism, but there's nothing to stop you pooling your resources in a joint suit and suing for an eye-watering sum of common consequential losses.
My guess is that if you do that, HSBC will settle out of court by restoring your accounts and offering a "no-fault goodwill payment" to everyone.
At that point you can collectively choose to refuse the payment and fight the case all the way through.
> and bank accounts have complicated T&Cs which basically say "We can do what we like, and fuck you."
I've yet to see one that had T&C's that spelled that out directly or indirectly. In fact, banks being quite regulated chances are that even if their T&C had language like that in it it would likely be invalidated.
> You'll spend a fortune paying someone to argue some or all of the agreement is unenforceable.
If it goes to court, yes. But there is a very high chance that it will not and if you do not show that you are prepared to take it to a higher level then you're going to have to be content with being ignored. Trust me, a letter from a lawyer will not be ignored, especially not if it formally makes the bank liable for any and all direct and indirect damages arising from an action taken by the bank.
Lawyers typically invoice once per month, by then this should be long over. And if not they're not monsters either, and should given the fact that they know exactly what the state of affairs is be more than happy to wait for a bit.
Another reason to cultivate a relationship with a legal office long before you actually need them.
How do you know? This could drag on for months. And in the meantime, your money is frozen by the bank. Not a lot of lawyers will be happy to work for free in the hope you will get access to your money eventually to pay them.
And forget about not having money to hire a lawyer. You don't have money to pay salaries (or a salary if you are a one person company), bills, rent, mortgage. You have survival things like paying your rent so you don't end up on the street as top priority while your bank account is frozen.
I think you underestimate how expensive lawyers are and especially for small businesses they really can't afford them.
Which is why there needs to be strong regulation / legislature to make sure banks cannot just freeze your money because their buggy anti fraud system flags your account for some bogus reason.
At the very least they should be forced to allow you to withdraw some amount of money per month (2-3k) let's say while your account is in review, so you have money to pay your rent/gas/food and other basic cost of living expenses.
Apparently they can just freeze your account and your money is gone perhaps for months. That's frightening.
As a company director, you have a legal responsibility to pay your bills, knowing you cannot (because your bank account is frozen) means technically you are in breach and trading insolvent which is an offence (criminal?) I wonder what companies house would say - how long before you have to tell them!
It can still mean insolvency. If your clients delay paying their bills you can also be forced to declare insolvency. Even if the clients will definitely pay and cannot be insolvent themselves (e.g. government).
This is a matter of some urgency, a company that has its funds frozen can not trade and the knock-on effects are substantial (employees, taxes, invoices). So the courts should be easily convinced they need to move fast or the damage will be substantial. There are special procedures for such affairs and they tend to be heard within days.
> And in the meantime, your money is frozen by the bank.
That could be a very short time. But then again, I am not a lawyer, merely the frequent consumer of lawyers' time.
> Not a lot of lawyers will be happy to work for free in the hope you will get access to your money eventually to pay them.
Any lawyer unwilling to take your case is not worth doing business with anyway since they tell you effectively they won't be competent enough to see this through to a speedy conclusion.
> And forget about not having money to hire a lawyer.
Yes, I will happily forget about it since it is not an issue.
> You don't have money to pay salaries (or a salary if you are a one person company), bills, rent, mortgage.
This is exactly why you have a case and one with an urgent component.
> You have survival things like paying your rent so you don't end up on the street as top priority while your bank account is frozen.
Well, you will so that's why my suggestion to re-route any outstanding invoices to a new account pronto to avoid getting caught.
> I think you underestimate how expensive lawyers are and especially for small businesses they really can't afford them.
I think you underestimate how many times I've used lawyers in the past and how important it is to know your way around the legal system as an entrepreneur. Sooner or later you will either sue or be sued and if that's your time for learning you are too late.
> Which is why there needs to be strong regulation / legislature to make sure banks cannot just freeze your money because their buggy anti fraud system flags your account for some bogus reason.
Likely this is exactly why the account is frozen in the first place. And which is why you need to play this by the book and without delay.
> At the very least they should be forced to allow you to withdraw some amount of money per month (2-3k) let's say while your account is in review, so you have money to pay your rent/gas/food and other basic cost of living expenses.
I'm pretty sure that is exactly the kind of thing a ruling would aim for, but again, going by my experience the bank will avoid going to court at any cost and will long before that point give you a one time option to withdraw your money and move your business elsewhere. Now what happens after that is an annoying problem to have because it may very well be that the business or one of its partners - and not the account - was flagged.
> Apparently they can just freeze your account and your money is gone perhaps for months. That's frightening.
It never was any different, it's just that with the terror and the drugs laws these things happen more frequently. Also, some businesses are much more liable than others to be used for money laundering / financing of crime / evading embargoes and so on and you really need to think ahead about stuff like this to avoid getting bitten by it.
Again, I'm not a lawyer but I have worked in banking - albeit long ago - and even in those days there were plenty of rules in place and I have used the legal system quite extensively and as far as I can see this case is not special or in any way lost before you've tried to fight.
It will cost some time and some money, the latter you may be able to recover depending on how the judge sees things, the former you will certainly lose. I would be extremely surprised if the bank actually let the case go to court and if they do that's a strong sign there is more to this than the OP is letting on so for now my money is on the bank folding at the first sign of serious opposition.
>Lawyers are expensive, and bank accounts have complicated T&Cs which basically say "We can do what we like, and fuck you."
Dude - did you not notice that all it took was for him to post an online article? They didn't go to him with their T&Cs.
Lawyers are expensive for a lot of things, but often all it takes is an official letter from a lawyer. I don't know how expensive that can be, but as someone else pointed out, it's likely pennies compared to losing your whole business.
People often pay an affordable monthly rate to get limited legal services. They'll do basic stuff for free, but if it gets complicated you have to start paying. Something like this letter would have been covered.
A tip for you - it's natural for techies to "plan for the worst". Learned the hard way that in real life being optimistic can work out.
A friend once lived in an apartment building where his neighbor kept complaining about loud noise from his apartment (called the cops a few times). The cops always sided with my friend. However, when it came time to renew his lease, the landlord said "No" due to the large volume of complaints.
But things got worse - no one would rent to him. Apparently his name got put in some database as a bad tenant. He kept talking to his previous landlord to get his name off the list, and they did nothing. He became essentially homeless while earning six figures. He sent his wife and kid to live with her parents, while he stayed with a friend for a few months.
In the end, he went to the police, got the records of the incidents, all of which showed that the police found his neighbor to be unreasonable. He took those papers to the landlord and they finally fixed his record.
When he told me this, I asked if he talked to a lawyer.
"No man. Everyone told me they'd charge so much that it wouldn't be worth it."
The guy did not even call a lawyer to ask what they would charge! Trust me - the legal business is not as "profitable" as it once was. There are many lawyers out there who need the money and don't have regular clients. They'll be happy to provide services like writing threatening letters for a fee. How much could they charge? Googling around I'm seeing $150 to $500.
Attorney here. Don't cheap out on legal advice or process (or any other professional for that matter). You know what they call the guy who graduated at the bottom of his class?
I don't know about that. When attacking a very large party it can definitely - in my experience, which is only one data point - make a huge difference who your lawyer is.
I've had a little round on the mat with a very large Dutch corp and once I switched lawyers from a small office in Amsterdam to one of the legal giants here (it was hard to find one that wasn't conflicted) it was over extremely quickly.
It shouldn't make a difference but apparently it sometimes does.
>The UK doesn't have a formal class action suit mechanism
Actually, it does.
The Consumer Rights Act 2015 created one. See Schedule 8[0] (which amends the The Competition Act 1998[1], but legislation.gov.uk hasn't updated that yet).
Not sure if you're in the US? where that maybe possible. In the UK this is not that simple. Not even sure how you would sue them, their T&C would cover this under AML / Knowing your customer legislation. The problem is the knee jerk reaction from the government on stopping the bank's bad practices without thinking what happens, in reality, day to day.
I'm in NL, and my bank disabling access to my account would cause them to be in the 'kantongerecht' tomorrow morning because of the immediate effects such an account closing would have. I'm thinking taxes and salaries having to be paid, indirect damages due to reputation and other immaterial affairs and direct damages because of my inability to pay employees which would surely cause them to leave the company due to breach of contract on my part. I'm 100% sure I could get a hearing in court based on the last one alone.
Sure, but that's nitpicking over terminology. The Kantonrechter still exists, the processes still exist it is just that they are now a department in the larger courts. But that doesn't change anything about the essence here.
Depending on what the situation really is in NL a lawyer might go for a 'kort geding'.
In no way should extra due diligence on the part of the bank cause this situation to arise. They've audited this guy twice, either they formally accuse him of laundering money and close his account, or they unfreeze his account. This is just terrible inefficiency, and hints at complete chaos behind the scenes. This is the fault of HSBC, not the regulation they've (fairly!) been subjected to.
While I agree that HSBC is at fault, to be blunt about it ... determining fault and pointing fingers doesn't pay the bills.
Banks can and will screw you over, hard. I may one day write my own experience up as an object lesson and cautionary tale for those who might succumb to the sirens song of bank "services" and "products".
The best advice is to consult an attorney right now. Yeah, it will cost you money. The 1 hour spent talking with them, and paying them for that time is well worth the fee, in general. This will give insight into how to approach the problem.
Another avenue that the OP should explore is sort of an amplified version of what they did at medium. Like it or not Medium is not quite "wide" distribution. They should choose another outlet to tell their story, one that gets much wider public attention, and enables them to call out HSBC in a very public forum.
I don't know if the UK has the same rule as the US in "absolute truth is a defense". If so, go to a widely read/reported media outlet. Tell your story truthfully, in depth. Let them be your megaphone.
HSBC will react when confronted with bad press. If your story is rock solid and unimpeachable, they will need to move quickly.
Still, the advice of talking to a lawyer (solicitor/barrister) is correct. Yes, things might not be simple that's when you talk to a professional who knows what to do
KYC does not preclude you from searching legal help and T&Cs have limitations.
Almost every solicitor/law firm will give you an hour of free consultation where you can explain the situation and they will tell you that it's worth pursuing or not, I'd at least start with that.
If you have a business and don't have some kind of existing relationship with legal representation, you may be screwed in more ways than having your bank accounts frozen.
Basically yes - the law changed and the banks are just taking advantage of it.
Part of this is that while under investigation they are not allowed to talk to you, and have no motivation to act quickly. I have read in a lot of cases, once they start the process it is very unlikely it will end well. You will, of course, get your money back (assuming you can prove everything they want).
They will close your account and the damage is done regardless if you are guilty of something or not. Quicker for them to close an account, then carrying on investigating a backlog of cases.
Of course, at some point, they will lose customers from a bad reputation but can take years before this becomes a mainstream problem.
I think the odds are small of this happening to you by accident, but it is happening.
This problem has not happened to me but did to a friend and I had to loan him money to pay his rent, bills etc. Took 3 months to resolve. Was with Halifax bank.
Personally, the main problem I have experienced is around credit cards and reducing limits when you pay off lumps sums. Worse still - I had a credit card closed and they took the money directly from my savings account as part of their T&C ability to garnish money from any other source linked to the bank. There was nothing I could do about it.
Lesson learned NEVER have a loan/credit card in the UK with the same bank as the one you have savings or your salary goes into Also, NEVER have your personal accounts and business accounts with the same bank!
The other comments on here about having multiple accounts for businesses can be a little tricky as some banks will not open a second business account if you already have done opened with someone else. e.g I had Lloyds business bank, tried Metro bank but they refused to open until I could prove Lloyds was closed.
The other comments on here about having multiple accounts for businesses can be a little tricky as some banks will not open a second business account if you already have done opened with someone else. e.g I had Lloyds business bank, tried Metro bank but they refused to open until I could prove Lloyds was closed.
I wonder what the reasoning behind that is. Surely if I wanted to move my company's banking facilities from one bank to another, I'd need to make sure the new facilities were open and working, run both in parallel for a few weeks while clients paid outstanding invoices and the like, and then close down the old ones once everything was using the updated details? If Metro won't open a new account until you can prove that you've already closed down the old one, how many businesses ever transfer to Metro?!
It's to make structuring harder. Of course it is perfectly well possible to have multiple business accounts, no need for you to inform them of your other accounts with other banks (and privacy laws may forbid banks from sharing this information). I have accounts with both Rabo and ABN/AMRO at the moment and nothing would stop me from adding a third or even a fourth bank if I wanted to.
no need for you to inform them of your other accounts with other banks
(and privacy laws may forbid banks from sharing this information).
The UK have a small number of credit reference agencies, and UK banks universally (as far as I can tell - there may be extremely niche private banks which don't) share customer data with one or more credit reference agencies (and there is provision in law for this).
Every bank I know will carry out a credit-check on a customer opening a new account (even an existing customer), so your other accounts will be immediately visible to the bank you're applying to - and the fact of your application will also be recorded.
I have no idea how much that information would affect your application, but I'd be extremely surprised if questions weren't asked.
The issue isn't that there's no recourse - it's that there's no urgent recourse, so you can spend months without access to the funds you need to pay bills, pay employees, pay your mortgage…Time enough to go bankrupt and lose your home.
Difference of shutting down and preventing access to funds. It is legal, based on small print, to shut down an account on the sending of a letter (proof of sending a letter) and place funds for all accounts (businesses likely to have multiple accounts, globally) in a nostro account for transfer, waiting for payment instruction, just-like-that. Quite ugly, but done. That's a bit different from OP's case, however.
Actually, and somewhat counter-intuitively, money you put into a bank account belongs to the bank, as an account-holder you have a credit and they have fiduciary duty towards you. But in a very fundamental sense the property of your money has passed to the institution you bank with. They do however have the duty to make it available you, or rather, do as you instruct them to up to the value you banked with them.
This is correct, and similar legislation exists in many other jurisdictions. It is one reason why you want to be somewhat careful with who you bank with.
They can write whatever they want in their T&C but that doesn't mean that it would stand up in court. IANAL and there could be something different in the UK legal system from the rest of the EU.
Exactly. Getting a solicitor involved may be a (very expensive) means of expediting a resolution, but I don't see on what grounds you could follow through with legal action.
> I don't see on what grounds you could follow through with legal action.
That's exactly why you talk to a lawyer. I've been in business a bit longer (30+ years by now) so I can see such grounds but whether or not the lawyer agrees they are good grounds is an important element in determining the strategy.
But I highly doubt the bank would let it get to the point where they would have to appear in court.
You are not suing a poor guy who will not sleep because he received a letter from your lawyer. It goes to a complaint department which I am sure is as bureaucratic as the rest of the bank.
UK banks are ridiculous and they're hastening their own demise to challenger banks with attitudes likes this.
My bank (Barclays) suspended my account and blocked my cards after attempting to make a large payment.
It was £2000 to the Student Loans Company.
My account was a graduate account.
All of the clever machine learning anti-fraud algorithms in the world couldn't figure that one out.
Same for me, they have way too many false positives in their fraud detection when there should be quite obvious heuristics to whitelist some payments (e.g. regular payments to the same business that have been made for years). For instance, if I pay Bitbucket the same amount every month for years, their fraud detection algorithm should never suddenly decide that this month's payment is fraudulent.
Once Nationwide decided that because they stopped two (completely ordinary, regular) payments in a row due to a false positive, that they needed to stop every payment. And because I pay most of my bills on the same day, everything was stopped.
To add to the ridiculousness, they sent me paper letters through the post, one letter per transaction. So I found out about it via a stack of envelopes coming through my door all from the same company, all, saying the same thing, all on the same day. Meanwhile, their messaging centre on their website didn't say a thing, I didn't receive any email, nor any text message. What's the point in having a messaging centre if they aren't going to send messages through it?
I studied in the UK, lots of horror stories to tell:
# Name misspelled 4 times
* Santander: They spelled my name wrong on the debit card, 4 times in a row, with a different misspelling each time. Each time I had to go to the branch and type the correct spelling into a keyboard. They still got it wrong the next time. The 5th card was correct. I was without a working card for 3 months and had to pay everything in cash.
# Locked out after they sent money to somebody else
* Barclays: My flat mate paid me sublet rent. One of the transfer didn't arrive. When he checked, the money was sent to a completely different account number he had never entered (probably an off-by-one error in their code?). He called Barclays to correct the transfer. Instead of fixing the issue, they locked his account for 2 months, he couldn't pay any rent any more, he couldn't receive money from his parents to pay for rent or university fees.
# Ridiculous branch security
* Natwest: I'm at the branch with my friend. We're sitting directly in front of the clerk with her keyboard to her Windows computer in front of her. She unlocks the screen saver, 1-finger-typing the 5-character password (so I knew the password). Then she leaves us in the room alone for 10 minutes, not even locking the screen saver again. Also, the part of the PC where the keyboard is plugged into the USB is directly next to my right leg. It would be very easy to pop in a keylogger without anybody noticing (of course it has already been done: http://www.telegraph.co.uk/news/uknews/crime/10322536/Barcla... and http://uk.reuters.com/article/uk-santander-arrests/gang-held...). Later she asks my friend for a password. My friend looks at me, I put my fingers into my ears. Afterwards the clerk asks "why did you put your fingers into your ears?". I respond it was so I wouldn't learn my friend's password, obviously. She replies "Oh wow, that's cute!". Such is the qualification and training of those who safeguard your money.
# Preventing my card getting blocked abroad with Jedi tricks
* Santander: I'm abroad in Hungary with my UK debit card being the only one I have with me. After buying an 8£ ticket from ticket machine of the Hungarian public train transport MAV, I get an automated call from Santander to confirm whether a potentially fraudulent payment of 8£ is legit. I confirm. After a short while I receive a text that says my card is now blocked. I call Santander's support. They say my card is blocked because of a fraudulent transaction. I say I just confirmed that this transaction is not fraudulent, please unlock my card. They say "sorry, your card cannot be unlocked it has been marked with a red flag". After being stunned for a moment by this idiocy I say "so what, remove the flag then". "I can't do that Sir, we'll have to send you a new card to your UK address". I lose it with "You will not send me a new card, I am abroad and this card is the only one I can pay with here! You will unlock my card NOW!" (My inner self makes an Obi-Wan-esque hand guesture.) To my surprise, the answer is "OK, I'll check it with my boss", and shortly after "OK, card is unlocked. But we'll send you a new card in one month". I never received a new card.
I've never had any such problems with German and Swiss banks.
It's not just the UK. An example (among many others) in France. I asked my bank (Societe Generale) to make a transfer to another bank where I also have a broker account, with the intention to make an investment. Societe Generale blocks the funds and requests a proof that I will indeed make an investment before releasing the funds. How do I prove that I am going to buy some stocks on the market when I receive the funds? It took me a week to convince them the absurdity of their request.
Although yes, the big banks are never a single corporation or entity stretching across the globe. In each country they operate they set up a separate business, so technically you were dealing with the Santander UK company.
I have an account in a Swiss bank too. Never had any problem with it abroad (France, Spain, UK). I never hear from them and I love it. My card was stolen once and I received a call the next day, everything was reimbursed. When I call it's a human that responds. Good customer service as it should be.
Barclays are intensively hiring developers for their fraud detection system at the moment - I've been approached several times but from what I can gather when I pressed them on remuneration they're looking to pay peanuts (relative to the skills required).
There's been a lot of advice shouted about that everyone should only make the minimum payments as it'll be cheaper when the debt is eventually written off - if you earn less than £X.
That only works if the rules stay the same.
I say it's a fair gamble that they won't and that many will wish they paid them off earlier.
It's not going to be unusual with the interest rates that students on the current generation of loans are now being charged. In fact, those might well be the most expensive debts a new graduate has. The whole thing about writing off part of the loan after several decades is mostly just smoke and mirrors; many people in graduate roles won't save much if anything that way, but they'll be paying lots of extra money that looks a lot like an extra 9% of marginal income tax except that somehow it mysteriously winds up belonging to a private company these days.
I'm genuinely surprised that high street banks haven't started openly competing with the official student loans already, at least not as far as I've seen. The terms are so abusive for new students today that the banks could easily offer private student loans on significantly better terms for the students and still make a fortune themselves. Maybe they're just assuming -- not unreasonably -- that the whole student funding mess is going to blow up spectacularly within the next few years and they don't want to be caught in the blast when it happens.
Reminds me of "Operation Chokepoint" where the U.S. federal government was able to persuade (not force) banks to cut off firearms dealers from their accounts in an effort to affect "unsavory businesses".
Another reason why I want to avoid a cashless society, at least in the way we're heading right now. Scary how quickly banks will cave in to pressure from the feds before any legal process even begins (if ever).
Also, can anyone tell me why the other reply to the parent is dead? It was a completely relevant response that, I assume, was downvoted because it mentioned something that Trump did in a positive way.
The presumption of guilt turns the entire concept of justice on its head. A 'cashless' society at best is one that ensures that only those at the top might get to enjoy the fruits of fraud and corruption.
I second not dealing with HSBC. They've been fined as mentioned in the article. They've also lost enormous amounts of data through mismanagement and to hackers, so have gone to the other extreme of "safeguarding" their data.
I put safeguarding in quotes because a couple years ago I was responsible for the technical aspects of the acquisition of a small fin. book from HSBC. They did a lot of absolute dictation of governance hurdles which they "enforced" - again the quotes, because they came to our offices and nodded wisely when I rattled through our list of safeguards. But very clearly didn't understand a thing about the controls we said we were using. They also didn't ask for any evidence of the controls. That really surprised me, after all the noise they'd made leading up to that meeting.
I don't rate them technically at all, so have to wonder what their business capability is like...
Not to pick on you particularly (this is just where I got to in the comments) but who _would_ you recommend instead for others trying to avoid this? Particularly for the UK, since a lot of the time the HN crowd is US-centric :)
Not to pick on you particularly (this is just where I got to in the comments) but who _would_ you recommend instead for others trying to avoid this?
This is the problem. There are nightmare stories about basically every major bank and financial service, and while there are two sides to every story, a lot of them certainly look like well justified complaints about wildly inappropriate treatment.
If someone was doing much better, we'd all be using them already. For now, I can only agree with the general advice many are giving: diversify, so you never have personal and business with the same organisation, never have all your essential accounts and cards with the same organisation, and so on.
When people tell me they don't "get" Bitcoin, this is exactly the sort of thing I have been looking for to try to explain it. Yes, it has problems and is still maturing, but no one can inexplicably just off your bank account like this.
Bitcoin can still be akin to keeping your life savings in the sock drawer. You still have to take steps to keep your holdings safe from a single point of failure and if you do get breached there's no legal recourse. You have nearly full control of your funds via bitcoin, but with that much control comes great responsibility to minimize risk that you normally expect a financial institution to do.
I've got coworkers and a friend who have been contacting coinbase for ~months because their funds have just disappeared into the ether. Deposited money, nothing showed up in their account. Apparently it's common, and they're just supposed to wait longer. I would guess that this is because just like you said, it has problems and is still maturing. But - doesn't that mean that coinbase could just off their accounts?
Coinbase is a bridge between dollars and bitcoin. That's why it has all the AML/KYC hassles of an ordinary bank. Once you cross the bridge, though, your bitcoin is all under your control.
1) They should be buying with their credit card. Visa and MasterCard + Amex will not make any issues giving your money back through a chargeback dispute. Virtual Coins are NOT tangible assets; hence Coinbase can do shit to proof they delivered you the "goods" (main reason why a dispute will be favorable to them, not you the customers)
2) Talk with the few layers in Bay Area. I believe there is a class-action lawsuit brewing and they just need more voices to add. I seen ad/clicked and read through but somehow unable to find it now :( I am sure calling few lawyers that deal with class actions (Law firm from PayPal lawsuit?) will help you guide through the right direction.
"Mt. Gox announced that approximately 850,000 bitcoins belonging to customers and the company were missing and likely stolen, an amount valued at more than $450 million at the time"
OK, so the link to that video is a 1 hour loop of a guy saying: "Your keys, your bitcoin. Not your keys, not your bitcoin".
So my guess is you are making fun of the 'security' of that mantra being repeated in the video? Just making sure I got the 'joke' (please correct me if I err).
> Then Apple failed. This was a strange one — it appears you actually need a valid payment card associated with your Apple account or you cannot download free apps or update existing ones. Every time you try it just asks you to re-enter payment details. Not a show-stopper, but frustrating all the same.
Not true. They have a lot of dark patterns to make you think that but you don't actually need a payment account associated with your Apple ID. It's possible they've changed this since the last time I tried doing setting one up but you may need to go through the desktop interface rather than doing it directly on a iOS device.
You need to have a card associated with the account and can't remove it if you're in Czechia. Or if it is possible I was not able to find how to do it after a hour of googling. It's per country requirement.
At the moment banking is a total disaster. Personal accounts, under KYC disguise, are being questioned on "suspicious" £2-3k transactions sent between family members. Banks fraud altering systems are so inconceivably dumb, that they can't recognize two persons both having bank accounts at their same institution, both living on the same address as being part of a household, not to bother questioning them why they send cash to each other.(Lloyds Bank, UK).
Business banking is getting totally destroyed by fanatical and full of nonsense administration of KYC regulations, where banks want to verify not only the invoices and reasons for every transaction, but the underlying composition of every amount and how it was earned and why. And why the sum earned is higher, than what they think it should be. Their reviews of business models and revenue generation processes is more strict and intruding, than the figures some investors consider enough to provide business with funding.(Rietumu bank, Latvia).
At the same time many large European banks are losing their ability to transact in USD, after bank-correspondents are leaving them (Deutsche bank). SEPA transfers in EUR is what is left for many businesses as they are cut from making any international payments in non-EUR currency.
The situation is beyond worrying. I hope there are some sane banks left. Possibly smaller banks, friendly to online businesses, who realize that when you receive affiliate payments from Booking.com NV, you are not laundering money and it would be totally moronic to questions those transfers. Please comment if you can recommend such.
The story is very similar to what we experienced with HSBC exactly year ago. Its wrong on so many levels, in our case they sent us money via cheque so we got access to it in about 2 months. There is no point discussing anything with them, you are a small fish and have a business to run, not suing a bank or losing your focus on your main business.
Since HSBC kicked us out we have multiple banks and if things go wrong we just move to another one.
I am from India. A startup I was part of also had a bad experience with the bank. I can't go into the details but the bottom line is that the bank branch where we had our account was absolutely uncooperative. The problem was resolved after many days of mail writing, talking to phone banking and running after the branch people.
"what it was really doing was checking I’m not a drug cartel or rogue nation."
If they decide you are a drug cartel or rogue nation, you will be upgraded to Most Favoured Customer status and assigned a personal account manager. If requested the dimensions for the aperture of teller windows will be provided so you can custom manufacture boxes to fit the maximum amount of dirty cash through them in the shortest time possible.
You'll get the same treatment with the anti-fraud/kyc team at any bank. It's standard procedure to not disclose reasoning because it essentially helps fraudsters/criminals avoid checks.
There can also be legal restrictions on what they can tell you. For example if they think you're committing money laundering it can be a criminal offence ("tipping off") for them to tell you that why they're investigating you.
It might also not even be directly about your business, if for example one of your counter-parties (customer/supplier) is subject to criminal investigation it could result in you getting flagged up as a related party.
It sucks when it happens but unfortunately it's a reality at every bank.
Slightly Off Topic: The other thing i notice is how we are dependent on "Monthly" services and subscription. iCloud, Photoshop etc. A lot of these could have been a product that you buy it one off.
What a horror story. I also have a business bank account in UK and after reading this article I immediately went and paid myself a hefty dividend just in case something like this happened. I will try to keep balance in the business bank account low, just enough to pay corporation tax, VAT and salary.
This is an intentional strategy to increase the 'cost of regulation' so they can lobby against it and go back to accepting shoeboxes of cash through deposit windows.
With current regulation they get punished for taking business deposits. Deposits from retail clients are "sticky", so can be realiably used for loans. Business deposits fluctuate so that the bank has to keep a large share as cash at negative interest rates.
We were just about to move our business banking over to HSBC, but this is appalling. I'm going to bring this up with the people we're dealing with and politely decline to go any further with the process for now.
Ironically, I know use Bitcoin and Bitcoin-linked debit cards to pay for Github, Amazon and the rest. Much easier than having all these calls from banks, and for less than 2000 €/month, KYC is very relaxed.
You know your bank is horrible when Paypal has the better support.
Over the years here on HN we have heard a number of Paypal horror stories but it seems Paypal is somewhat responsive.
Personally, I've had two lockdowns on my small time Paypal account(in 17 years) and in both cases I was able to resolve the matter within a few days. Both times involved faxing some information to them...
This happened to a friend a few months ago. He has a SaaS business, working remotely out of France (uses Stripe + US bank accounts as he lived in US for sometime).
One day suddenly, he got locked out of his bank account (a major US bank) and the only way to restore the access was to walk into a branch physically. This meant dropping all work and flying to US at a day's notice, assuming you are granted a Visa. He was fortunate that the customer service listened (though they were not the politest people on the planet). After jumping a few hoops and following some unconventional methods of verification, the access was restored, but the situation was scary for a few days.
More hidden cost from the war on drugs. What does it take to finally try to find another solution or arrangement?! I guess value voters in the US will never give up on this and we will live with this silly bootleggers and Baptists problem forever...
This sucks. I've recently started contracting in the UK and opened a business bank account with HSBC. I was initially tempted by Tide (https://www.tide.co/), a new entrant with an attractive business banking product, but unfortunately they are not covered by the Financial Services Compensation Scheme, so I thought twice...
Maybe I should still open an account with them just in case... Wonder if anyone here has tried Tide here?
FSCS is to give (limited) protection from a bank's bad investment/lending decisions. Tide operate using an emoney license which requires deposits to be held in a ring-fenced account and doesn't allow them to be lent/invested in that way. I'd be interested in other opinions but my understanding is that the risk FSCS protects against in the case of a bank can't happen under an emoney license anyway.
(FSCS doesn't protect you from the problem this article was about either, and that seems much more likely to happen than one of the large banks being allowed to fail..)
Their accounts are super easy to setup, if their fee structure fits how you work then it's probably worth having one even if it's "just in case" to keep your options open.
We have a Tide account, alongside a more conventional business bank account with a high street bank.
Tide is not without its issues. For example, there's no way to accept payment from a non-UK account (no IBAN, BIC, SWIFT). It's also tied to a single person's mobile phone (even log-in to the web banking requires that one person's phone), even though we're a limited company, making it somewhat awkward for book-keeping purposes.
The traditional banks are far from perfect but Tide is not right for every business just yet.
Have been considering Tide, as we are applying for an HSBC Business bank account currently gulp. As Prepay Technologies Ltd is used to store the deposits I believe small companies ARE eligible for compensation under FSCS should Tide/PrePay run into problems.
Presumably HSBC objects to a for-profit business running a patreon & donations. I can see how from a bank's perspective that could look like something illegal is going on.
That's something they can complain over. Or hook you up with the local attorney general. Or shut down your account on some bullshit excuse to make you make it someone else's problem.
Silently freezing the account with no way to resolve it? Nope.
I had to fight with Citibank for about 3 months to get them not to suspend my business account after I'd been a customer for 10 years due to the new "know your customer" bs. The "know your customer" regulations are about as anti-small business as they can be. Doesn't matter that you have an LLC in the State of NY that's been active for 17 years, we won't let you keep your account without a signed and notarized letter from your accountant or lawyer stating exactly what your business and income is from. Doesn't matter if you don't have a lawyer or accountant because you handle it yourself via thinks like Quickbooks, go pay one a couple grand to look through your books for the last 10 years and then sign the notarized letter.
If you're having trouble with an HSBC or Citibank, try a smaller bank or a credit union. They'll generally have policies catering more to the local market. The local credit union had no such issues like above. A smaller bank like TD Bank just wanted to make sure you were registered with the state and do a premises visit (and visiting your apt/home was also acceptable for home-based businesses).
Another example of UK banking going wrong is the story of a number of companies including a Noel Edmunds (deal or deal fame) that went under after massive fraud caused "allegedly" by bank staff!
Fuck them. Move on. You are perpetuating this mess.
Businesses do periodically change banks or account numbers if their account has been compromised by fraud. (This recently happened to my family's business bank account...
fraudulent checks were produced - so we created a new checking account.)
You can re-automate all your payments within a day or two on your new account with your NEW BANK. The silver lining is you can assess all these monthly charges - and possibly cut some unneeded services - or upgrade some which you would benefit from.
MOST IMPORTANTLY - Find a bank that is headquartered locally - so you can go see the people who work at the bank occasionally - build relationships - and avoid this type of abuse. If the local bank is sold to a bigger bank - jump ship again.
This sounds like a toxic business relationship and your only TEMPORARY loss is the cash they are holding in your account. You should have access to emergency funds in another bank account - and if you don't - learn that lesson now.
You are ultimately responsible for everything and service providers are just that - service providers. Learn to fire and hire them as often as needed.
> The only way to solve in the short term is to spread the risk across many banks, and never keep your money in one place.
not only banks, you also have paypal, prepaid cards, etc.
and not only "short term"
eg. always avoid the "single point of failure"
the real infuriating part here is that those problems occur on a business account (not a personal account), if you pay extra for business you should get extra/faster service/resolution.
Hi. I run SourceGuardian.com. Today I had exactly the same experience!! Whilst I was in the States for 5 weeks I tried to log in to my online banking and received the same message. I just presumed it was their security system recognising I was in the USA and therefore I decided to deal with it when home. Arrived back and made a call, but was told I needed to go to a brand. Went to a branch and they told me they could not help. Eventually I went to another branch and found a sympathetic business manager. Finally I talked with HSBC on the phone again but they say that I must do another call with them, despite me doing one already. My story is exactly the same although I'm just starting - already I have had payments denied and have been told that all funds have been frozen. Of course they're accepting deposits, I just can't take any money out!! Its a nightmare. Tomorrow I am going to see what I can do and who I can call to try to resolve this.
This was the entirely predictable result of regulations on financial institutions that have become more and more idiotic. Imagine if we had decided to fight drug dealers and terrorism by prohibiting any restaurant or grocery store from knowingly selling food to drug dealers and terrorists. We would see this same nonsense with food that we see with finance.
If we're going to fight drug dealers and terrorists, it shouldn't be by trying to push them to the fringes of our financial system, it should be putting them in jail.
There is something magical in how people are attached to their bank, at least here in France (but it looks from the article that this is the same in the UK).
Just switch banks!
I never payed for a bank account (in several countries where I had an account while living there). When Credit Mutuel decided to do my free account, I went to them and told them that either they go back or I leave. They did not believe me so I left on the spot.
It is so simple today to change that it should be like changing the brand of cereals. I am now with a bank which just works and very happy, one just needs to try until they get the right one.
I think its worse than that. There were gladly providing business to companies that ended up being criminal enterprises laundrying hundreds of millions - they knew and were helping along the way. So if the OP had millions of USD revenue he would have gotten top notch customer support from HSBC; since he doesn't...
Amazon does the same thing, once they lock up your account there is nothing much you can do except make a lot of noise and hope you'll be heard.
I had a horrible experience with a buyer account, they locked it up, and I didn't even receive a notification about it (I thought it was hacked...). The problem is that I had some packages on their way and I could not access any tracking info, etc.
After a couple of distressing days, access got restored with no explanation as to why it was locked in the first place, and I still have to hear from them what happened.
I have had bad experiences as a Barclays customer. Not as bad as what was described in this article, but things that would be unacceptable at even the worst American bank. I really get the feeling that banks in the UK only begrudgingly provide retail banking. And commercial banking for smaller businesses falls under that umbrella too. I don't have any hard evidence, but I would have to guess their real profits are in other banking sectors like investment banking, or with their bigger commercial accounts.
The horrible thing is that if you do maintain several business accounts and aren't careful about how you handle transfers between them you could be accused of structuring.
Structuring is arranging your transactions with the intent of avoid additional oversight that would otherwise be required by law.
For instance, if you know there's a rule that says every transaction over $X must be reported, so you split your $(3X) deposit into three separate deposits of size $X.
Yet another example of the sad state of affairs that engaging companies or governments directly through their established, official channels no longer works as well as going (or threatening to go) to Twitter with it.
Is it acceptable that a Twitter account and the ability to publicly Twitter-shame is a prerequisite for decent service? Is it acceptable that it's a prerequisite for democracy? It seems utterly ridiculous to me.
I had a somewhat similar experience with Chase - account locked without notice, wouldn't tell me what was wrong, couldn't get paid by clients. The only way I was able to solve the problem was physically flying to the US and proving my identity (again) in person.
Fortunately my credit card was through a different bank so didn't lose access to third party services.
As a tech business owner, I learned the hard way that you must pick a bank to match your business. If you are a small shop, don't bank with large banks. Find a local / regional bank, go physically there, develop a relationship with the bank. You have absolutely no financial leverage and no meaningful relationship with a large bank and that's not in the best interest to your business.
> I’m just another failed bank card to them, draining their systems.
Well, you're not draining Adobe. You're running Photoshop locally, so you aren't costing them any bandwidth, unlike most of those other services.
That rental model for software you run locally is even worse than most proprietary models. If Adobe weren't effectively a monopoly, I'd hope people would reject this nonsense.
Does the UK have the equivalent of credit unions? I moved to a credit union about 5 years ago and it turned out to be a great decision (if you have simple banking needs). I know all the tellers at my local branch and if I have a serious issue, I can just talk directly to the CEO.
Don't know if they're the same as yours but yes, we have credit unions. I think they were much more popular a generation or two ago however. I still know some older family members who use them.
this is the problem with these regulations. i think know your customer is a good idea and the banks should be collecting this information but they shouldn't be responsible for making the decision. this should be a legal process run by the state.
what you are seeing is what happens when due process is bypassed. if every bank follows the rules in a similar way and
there is a good chance they do because they are acting in a way that is mandated by law then you can be effectively locked out of the banking system. you are being punished even though you have not been convicted of any crime by a court of law.
i don't know what the solution is because the current implementation is quite efficient. but it does mean more innocent people are going to get burned.
As a banker, I am the first agree that banks offer an absolutely shit service, and the story in this article is only too common. But one should keep in mind that this is the direct consequence of over-regulation.
Regulations creates massive barriers to entry, through the complexity of the laws and regulation banks have to deal with and the amount of capital required to open a bank. As a result, no competition, and therefore the sort of monopolistic behavior that you normally observe in nationalized industries, where your bank doesn't give a shit whether you are satisfied or not.
In addition to that, most western countries deputized the banks to act as law enforcement under the threat of multi-billion fines. For certain banks, pretty much all profits from the past 5-7y have been nationalized through fines. As a business, banks will go to any extremity for these fines to cease, even it it means burning a few clients (or employees).
We must like the consequences of what we wish for.
Porter's Five Forces. Never let a single organization be a supplier for 100% of critical infrastructure. As I write this, I'm reminded it's been a while since I've looked through everything to make sure I'm not.
Chase suspended my companies' account for largely the same reasons FYI. I highly recommend moving to a bank where you can have an actual personal relationship with your banker.
I haven't used SVB but it can't be worse than the big banks.
I had a relationship with my Chase banker but my business account was still frozen without notice. To restore access I needed to physically fly to the US and prove my identity again.
To minimize this risk in future I opened accounts with multiple banks and split my transactions between them.
If you interact with such a bigger company than your own it is normal that things can take 6-12 months. It's a good opportunity to harden your business against it. Nobody likes to do that, but if you want to survive you have to.
I swore off HSBC years ago when they wronged me. Short version: They sold my account to another bank (!) that had a nearest branch 100+ miles away(!), and wouldn't let me opt out or close my account before the transfer!
Long version:
I had a personal (not company) bank account with HSBC, but the closed my local branch and informed me that my account would be transferred to a different bank. I had no idea they could do that, especially since HSBC itself wasn't closing. But it gets worse: The nearest branch of the bank they would transfer my account to was not even within my state but the next state over, 100+ miles away, and I don't own a car. So that would not do, at all.
I saw received a notification about this just a few days before the transfer would happen. I went to an HSBC branch to ask about it and found out they supposedly had sent an opt out form a month or two earlier, which I never received. The only thing I got was what they sent a few days before the switch, which included "welcome to your new bank" material. Since the switch hadn't happened yet, I asked to opt out, and was told that wasn't possible. So then I asked to close my account, and was told they couldn't do that! My account was still and HSBC account, but they refused to let me close my account! The branch manager told me I had to close my account with the new bank after the transfer. I could not comprehend how I was standing in an HSBC bank, with an HSBC account, and they would not let me close my account. Made no sense to me at all. So I did the only thing left I could think of: I withdrew all of my money in that account and opened up a new bank account with another bank down the road.
I called the bank that HSBC had sold my account to to cancel the account, but they wouldn't let me since it wasn't their account yet (of course). So I waited a few days and called them again to cancel the account. They wouldn't let me. I was told I had to go to a bank branch and cancel it in person. I explained the whole situation about the unstoppable account transfer and the fact that I was not going to rent a car and travel 100+ miles just to cancel an account with no money in it (which I needed to cancel since they would charge low-balance fees). And I was told the same thing. I ended up having to call them several times over the course of the next few days before I managed to get them to cancel my account and undo the low-balance fees I was charged. About a week later I had the paper documentation of account closure that I made them send me, thereby finally ending my tale and cementing HSBC as a company I will never ever do business with again in any fashion.
Go to a lawyer right now and pay for him to draft a letter that you will sue for damages if they dont resolve this by the end of the week. Send it to legal and watch how quickly they solve it
it blows my mind that basically any financial crime committed by a big shop results in a fine (and more regulation/compliance) instead of jail time for the bad actors.
of course, if the crime is committed by a penny ante fraudster, then the DOJ is not afraid to put them in jail.
There better be some serious god damned compensation for that company at the end of this. Jesus Christ, I wouldn't even know where to start in estimating the damages.
I had my business account frozen by Barclays for similar reasons but they responded quickly and had me up and running again quickly. Basically I had an international customer making cash payments directly into my account at Barclays branches in the UK (I think he used some kind of underground international payments system). After a few times I got locked out of my account. They tried telling me it was an IT error. They opened the account back up in about a week but I was on the phone with them every day.
I now have multiple bank accounts and a currency broker that I also use like a bank.
Oddly enough I tried to open an account with HSBC after that but because I've got a couple customers in "naughty" countries they refused to open the account. Their attitude makes a total mockery of all the advertising they seem to have plastered around at airports all over the world.
I use CurrencyFair and am very happy with them. Transferwise are a bit cheaper but they since have VC money and are likely to be cheap only temporarily I haven't tried them out.
I don't know if they do this but I had poor service from Barclays, bad enough that I moved to Santander. Unfortunately, they were worse than Barclays so I then moved to HSBC.
Interestingly they have been good so far, apart from closing my local branch.
> Then Apple failed. This was a strange one — it appears you actually need a valid payment card associated with your Apple account or you cannot download free apps or update existing ones.
I've always found this to be an issue that makes using a MAC a non-starter for me. I observed when I first got one (cast off) and it really puts me off.
Can anyone verify if this is true? I know it was in the past but AFAIK when the App Store took off they removed this restriction allowing you to select 'none' as payment method and still download free apps (otherwise at the time a lot of iPod Touch customers - i.e. kids/teenagers - would not be able to have use their products). The 'none' option still exists so I don't see why you couldn't download free apps with that selected.
I'm not entirely clear why the author felt it was a productive use of his time to write several thousand words on this. HSBC aren't likely to be swayed by such an article. They've been fined billions, they're probably not worried about being "called out".
First of all:
Why are you depending on only one bank account to run your business? It's very easy to set up two or more business bank accounts and use them both. Just like you have back-ups for your data (right?), it makes a lot of sense to also have financial back-ups for your business.
Same with the debit/credit card - is that all you've got for business payments? Why don't you have more than one card? Why don't you move things over to a personal card while you open a second business card?
It's too late for that now as the author didn't set that all up ahead of time, but instead of complaining on the internet, why don't they start moving things ASAP. I've found Santander incredibly easy to get up and running with (same day almost), compared to Barclays...etc.
Look, you're running a business, and your job running a business is to keep it running. If you haven't thought ahead to such possible events, you're doing your business a disservice.
So my advice - call Santander, start switching things over, stop broadcasting things online, and focus on keeping your business running. You can always do a recap later once things have died down.
And I agree, HSBC are a complete PITA. It's far too much trouble even getting a personal account with them, so a business account would be far more effort than I would be looking for.
Even Barclays wanted an in-person meeting (even though I've banked with them for decades) to open a business bank account. And the only date they had available was a month in the future. Yup, I cancelled that appointment.
So, build redundancy into your business. At the very least a second bank account. It's easy, but as you can see, so very important. Just IMHO.
> HSBC aren't likely to be swayed by such an article.
The article is clearly aimed at small business owners. He's doing people a favor by steering them clear of HSBC. I never got the impression he was speaking to HSBC, or attempting to call them out.
> It's very easy to set up two or more business bank accounts and use them both.
This is literally second on his list of takeaways.
I think you're being a bit hard on the guy. He had (as anyone would) a reasonable expectation of a banking service, coupled with acceptable customer service.
Hindsight is 20/20, and what he describes is not the norm.
As to "writing several thousand words" - the intent is not to sway the HSBC. It's to sway others who may be similarly stung by the HSBC.
I think it was an interesting article, and if I ever will have to deal with HSBC I'll be sure to think twice and twice over. Bad customer service shouldn't get a free pass.
Warning others from making the same mistake is extremely valuable.
Also please don't kick people when they're down. You probably wouldn't have gotten caught by this issue but I'm sure you have your own blind spots in other areas.
I don't know about the OP's actual banking needs, but in many cases your choices narrow considerably depending on what services you want.
Its a little naive to think "but you can just have banking redundancy", I mean you're right if you are running a very simple business (ie. lemonade stand). However once your requirements become: Need presence in County A, B, C in Currencies A and B with integrations to Partner X, Y, and Z your choices get really really tiny.
> I'm not entirely clear why the author felt it was a productive use of his time to write several thousand words on this. HSBC aren't likely to be swayed by such an article. They've been fined billions, they're probably not worried about being "called out".
Likely the author is thinking it's the last resort, and it has been shown to work a number of times before for other persons (eg problems with google/apple/and so on).
> I'm not entirely clear why the author felt it was a productive use of his time to write several thousand words on this. HSBC aren't likely to be swayed by such an article. They've been fined billions, they're probably not worried about being "called out".
I was locked out of internet banking for my business account with Lloyds for over 3 months due to a technical fault in the way it was setup. Was paid compensation in the end, but already had moved to another bank. They could not have cared less.
Some people will say no smoke without fire, but if you read on moneysavingexpert about people being locked out of their personal accounts for the same reason. Any transfer that is slightly different from your day to day will be flagged and risk having your account locked for weeks / months on end.
It happens more than we realise. A bit like winning the lottery, it could be you :(
The further we go down the road of electronic payments, and a cashless society it could get really messy.
The only way to solve in the short term is to spread the risk across many banks, and never keep your money in one place. Keep hold of some cash!