BBC Watchdod: Banks freezing out innocent customers and blacklisting them

JuicyJesus

Banks can block or close any accounts they like in line with their T&Cs, for any reason including for no reason at all. "Innocent until proven guilty" doesn't come into it. They are private businesses following their own legal obligations as they see fit. Simple as.

meer53

innovate wrote: »

Justice, as I understand it, allows the accused to defend themselves, after the accused has been charged. That is the case throughout the western world, except perhaps in Guantanamo Bay and when someone in a bank thinks someone is a money launderer or terrorist.

It may well be the case that banks are damned if they do and damned if they don't - - I am not saying the fault lies with the banks. They may well be cornered by the law. However, that does not make it just - - - the principle of "innocent until proven guilty" must apply in any educated western society (and hopefully anywhere else in the world).

With the locking/closing of bank accounts, we are seeing unilateral action by someone/something (i.e. computer decision) in a bank, with absolutely zero option for the individual to 1) know what they are accused of, and 2) being able to defend themselves.

This is fundamentally wrong.

Can't see why anyone would not want to object to banks having in effect their own jurisdiction. The current arrangements just fundamentally fly in the face of justice.

When accounts are frozen due to AML regulations, they are usually suspended due to a "suspicion" of money laundering.

No-one is "accused" of money laundering and most accounts are unblocked once the banks have carried out the correct investigations.

The system works, it protects the public and their customers, it is a very small number of people who are affected by this situation, the current arrangements work perfectly well in identifying money laundering.

innovate

meer53 wrote: »

I work for a bank. I close accounts daily. Sometimes i contact the customer, sometimes i don't. It depends on the reason for the closure, BUT, there is ALWAYS a valid reason for the closure or blocking of an account.

There are always 2 sides to a story, before demanding changes in the law, it is wise to remember this. As for Watchdog, the sooner Ann Robinson retires the better.

Where is that 2nd side of the story when you unilaterally decide there is a valid reason for closing/blocking the account?

Who/what gives you the right to judge over somebody else without them having had a chance to defend themselves?

As I said before, may be it is the law, in which case it needs changing urgently. Though I suspect a lot of it is to do with people being intimidated by banks/bank employees and not taking the appropriate steps to defend themselves.

Of course, there will be many cases where blocking/closing is justified - -- but it cannot possibly be down to some bank employee's decision.

Financial crime is no different to any other crime. The Police can make arrests but the Police do not decide on the punishment, even if they have witnessed the crime. The suspect always gets told what they are charged with, and has the right to defend themselves. Don't see why banks should have rights that exceed those of the Police.

innovate

JuicyJesus wrote: »

Banks can block or close any accounts they like in line with their T&Cs, for any reason including for no reason at all. "Innocent until proven guilty" doesn't come into it. They are private businesses following their own legal obligations as they see fit. Simple as.

I agree 100% that if anyone breaks the T&Cs of a company, that the company can then terminate the business relationship. However, any reputable company would inform their customer which of the T&Cs have been broken.

"Innocent until proven guilty" must come into it when a bank has the powers to financially ruin you (CIFAS markers etc).

meer53

innovate wrote: »

Where is that 2nd side of the story when you unilaterally decide there is a valid reason for closing/blocking the account?

Who/what gives you the right to judge over somebody else without them having had a chance to defend themselves?

As I said before, may be it is the law, in which case it needs changing urgently. Though I suspect a lot of it is to do with people being intimidated by banks/bank employees and not taking the appropriate steps to defend themselves.

Of course, there will be many cases where blocking/closing is justified - -- but it cannot possibly be down to some bank employee's decision.

Financial crime is no different to any other crime. The Police can make arrests but the Police do not decide on the punishment, even if they have witnessed the crime. The suspect always gets told what they are charged with, and has the right to defend themselves. Don't see why banks should have rights that exceed those of the Police.

The decision to close or block an account is mine, based on my risk assessment. Who would you expect to make the decision to block or close an account ? Surely the people who deal with this issue daily are best placed to make the right decisions ? My job is to minimise the financial risk to the company i work for, i would be negligent if i didn't do this.

It is against the law to alert someone to the fact that there is a suspicion of money laundering, if this is proven, then a court will decide the punishment, not the bank. Banks dont have rights that exceed those of the Police, why do you think they do ?

JuicyJesus

innovate wrote: »

I agree 100% that if anyone breaks the T&Cs of a company, that the company can then terminate the business relationship. However, any reputable company would inform their customer which of the T&Cs have been broken.

They can't. That would be tipping off. Which is something you still don't seem to get.

Financial crime is no different to any other crime.

Yes it is, in the same way as motoring offences are different from burglary which is different from murder.

grumbler

meer53 wrote: »

I work for a bank. I close accounts daily. Sometimes i contact the customer, sometimes i don't. It depends on the reason for the closure, BUT, there is ALWAYS a valid reason for the closure or blocking of an account.

In fact you don't need any reasons for closing an account with some notice. The main problem is with blocking/freezing without any notice and arrogantly treating presumably innocent customers like criminals. What are these reasons that you believe to be valid? What proportion of customers that have their accounts frozen (and possibly then closed) are investigated/prosecuted by government authorities for alleged crime or tax avoidance? None? 1%?

ERICS_MUM

Money laundering is one of the major growth industries around the world and obviously funds heinous crimes such as terrorism, illegal drugs trading, military coups, civil wars etc.

This is why the ML laws are so draconian and are also cross-border - governments signed up to a common set of laws.

Banks just don't have the authority to over ride these laws, and to do so would result in severe sanctions on the bank and also prosecution and even imprisonment of the individuals who made the decision.

Banks need to be able to "spot" an account which seems to have unusual activity over it, and the best way to do this is to measure accounts against their terms and conditions.

pqrdef

JuicyJesus wrote: »

Not really the same. It'd be more like John Lewis having evidence and being able to share this with the other department stores and the police, but being legally prohibited from showing it to you.

Evidence of what? If the account-holder hasn't had the chance to test it and explain it, it can never be unambiguous.

pqrdef

JuicyJesus wrote: »

Banks can block or close any accounts they like in line with their T&Cs, for any reason including for no reason at all. "Innocent until proven guilty" doesn't come into it. They are private businesses following their own legal obligations as they see fit. Simple as.

Fine, so long as they hand over the cash. Where does it say they can refuse to let the customer have his money for any reason they like or no reason at all?