First Direct want proof of identity years after account opened: anyone else affected?

masonic

MoneySavingNovice wrote: »

I would have to disagree with you on that one.

If there was a legal dispute with First Direct, as First Direct is not a limited company and it does not have a banking licence I think that they (i.e. First Direct/HSBC Bank plc) would have an almost impossible task in persuading a court that the legal entity is anything other than HSBC Bank plc.

While I fully agree that HSBC Bank plc are fully entitled to operate First Direct and HSBC as two divisions, this does not mean that in the eyes of the law they are in anyway separate.

I have explained my interpretation of what the HSBC employee told me and my understanding of the scope of the term 'legal entity'. You are arguing a different point using a more narrow definition. As I said previously, I am not a lawyer, but I seem to have a legal agreement between myself and first direct in my possession. Are you stating this is invalid because one of the parties (first direct) is not legally entitled to enter into a contract as an individual and that only HSBC Bank plc itself could be named on the contract?

<shrug> Perhaps I should have stated that HSBC and first direct simply believe they are separate legal entities, or HSBC and first direct operate as if they were separate legal entities? It is what happens in practice that is what counts in this particular situation because customers are going to have a hard time convincing HSBC and first direct to operate as if they were a single entity.

Coming back to the original point, I do not believe that first direct can be compelled to accept a copy of a document taken by a HSBC employee in an HSBC branch if it does not want to do so, despite it being HSBC's policy to obtain ID documents in that manner. Explicit agreement by first direct is needed for that option to be open to customers. Further, anti money laundering checks carried out by HSBC on HSBC account holders will not be taken into consideration by first direct when they review the information they hold about customers. Do you disagree with those points?

Doc_N

Isn't this all getting a bit OTT?

There's a very simple point at issue here - whether First Direct should be asking customers affected by their failure to check ID to pay a solicitor, doctor etc a fee for certification, when decent customer service would demand that they simply take the documentation to an HSBC branch for certification.

For the record, they will accept that - but only if you make a fuss. That shouldn't be necessary - it should be the norm, not the exception.

GingerBob_3

Twenty or more year ago banks didn't ask for identification documentation. There are very many people with accounts dating back that far, but it seems only FD are now inconveniencing their customers by requiring retrospective checks. Why? Because of their (HSBC's) own criminal activities. It beggars belief. I suggest any FD customers faced with this imposition should not comply and should change to another bank immediately.

masonic

Doc_N wrote: »

There's a very simple point at issue here - whether First Direct should be asking customers affected by their failure to check ID to pay a solicitor, doctor etc a fee for certification, when decent customer service would demand that they simply take the documentation to an HSBC branch for certification.

For the record, they will accept that - but only if you make a fuss. That shouldn't be necessary - it should be the norm, not the exception.

GingerBob wrote: »

Twenty or more year ago banks didn't ask for identification documentation. There are very many people with accounts dating back that far, but it seems only FD are now inconveniencing their customers by requiring retrospective checks. Why? Because of their (HSBC's) own criminal activities. It beggars belief. I suggest any FD customers faced with this imposition should not comply and should change to another bank immediately.

As GingerBob correctly points out, "Twenty or more year ago banks didn't ask for identification documentation." They are required to hold that information now. How do they address that problem? The only way I can think of is to ask those customers who have never had their identity and address verified to do so. Anyone with a 20 year old account who is complaining that the bank failed to check ID when the account was opened is living in cloud cuckoo land IMHO.

I don't think the reason FD is now required to collect this information is because of "their (HSBC's) own criminal activities". What is clear from the letters is that they should have inconvenienced customers with these requests several years earlier (prior to the revelations about HSBC).

I have opened quite a number of accounts over the past decade and have been required to provide documents for a handful of those accounts (for the rest I was verified electronically). In all cases, a list of acceptable documents was provided, along with a note to contact the bank if I could not meet those requirements in order to discuss alternative methods. So I don't think FD is doing anything unusual in not providing an exhaustive list to begin with. Is it really necessary to "make a fuss" or do you just have to politely ask for alternative options? Do FD ask in the letter to contact it if a customer cannot comply with the request?

GingerBob_3

masonic wrote: »

As GingerBob correctly points out, "Twenty or more year ago banks didn't ask for identification documentation." They are required to hold that information now. How do they address that problem? The only way I can think of is to ask those customers who have never had their identity and address verified to do so. Anyone with a 20 year old account who is complaining that the bank failed to check ID when the account was opened is living in cloud cuckoo land IMHO.

I don't think the reason FD is now required to collect this information is because of "their (HSBC's) own criminal activities". What is clear from the letters is that they should have inconvenienced customers with these requests several years earlier (prior to the revelations about HSBC).

I have opened quite a number of accounts over the past decade and have been required to provide documents for a handful of those accounts (for the rest I was verified electronically). In all cases, a list of acceptable documents was provided, along with a note to contact the bank if I could not meet those requirements in order to discuss alternative methods. So I don't think FD is doing anything unusual in not providing an exhaustive list to begin with. Is it really necessary to "make a fuss" or do you just have to politely ask for alternative options? Do FD ask in the letter to contact it if a customer cannot comply with the request?

But why is it only FD that are doing this? Maybe it's just the cynic in me, but I can't help thinking they are really just trying to get rid of these long-standing customers.

katejo

GingerBob wrote: »

But why is it only FD that are doing this? Maybe it's just the cynic in me, but I can't help thinking they are really just trying to get rid of these long-standing customers.

I am a longstanding FD customer and haven't yet received such a demand. I wonder how many have?

masonic

GingerBob wrote: »

But why is it only FD that are doing this? Maybe it's just the cynic in me, but I can't help thinking they are really just trying to get rid of these long-standing customers.

I'm sure if you looked back over historic threads, you could dig up examples of other banks asking for ID from long standing customers. The question is of why is it only FD that is doing this now? The answer seems to be because they didn't do it several years ago.

I don't think FD cares whether its customers are long standing or not and the fact it continues to offer a cash incentive to new customers suggests it really isn't trying to reduce the number of customers it has.

MoneySavingNovice

Doc_N wrote: »

....There's a very simple point at issue here .......

Totally agree. I can see no legal obstacle to this approach.


This discussion is really about a point of law, which only becomes significant in the case of legal action. I'm sure that masonic will not agree... but here is a answer to his questions/points anyway.

masonic wrote: »

.....I seem to have a legal agreement between myself and first direct in my possession. Are you stating this is invalid because one of the parties (first direct) is not legally entitled to enter into a contract as an individual and that only HSBC Bank plc itself could be named on the contract?

I would be interested to see this. Just looking at the T&C’s of First Directs Current Account, it makes it very clear (admittedly with some legal jargon) that the contract is between the account holder(s) and HSBC Bank plc (see the last page). To clarify this, First Direct is not a party to that contract, as it does not exist as a separate legal entity. You can have multiple parties to a contract without affecting it validity. But my reading of First Directs Current Account contract does not imply that the contract is between anyone other than the account holder(s) and HSBC Bank Plc.

.... Perhaps I should have stated that HSBC and first direct simply believe they are separate legal entities, or HSBC and first direct operate as if they were separate legal entities? It is what happens in practice that is what counts in this particular situation because customers are going to have a hard time convincing HSBC and first direct to operate as if they were a single entity.

First Direct do not have a Banking Licence. If they were a separate legal entity they would be in breach of the Banking Act 2009 for providing banking services. HSBC Bank plc do have a banking licence and its is this company with whom an account holder has a contract - at least according to the T&C’s of First Directs Current Account.

How HSBC Bank plc decide to operate is down to then, subject to the laws and regulations of the counties in which they operate. They have clearly chosen to act as two ‘virtual banks’ which I agree customers would have a struggle to change. I have seen no evidence to support you statement that ‘HSBC and first direct simply believe they are separate legal entities' The current account T&C’s of First Directs Current Account support the opposite view.

.... I do not believe that first direct can be compelled to accept a copy of a document taken by a HSBC employee in an HSBC branch....

Very true. The only place that any organisation is complied to accept any documentation is at their registered office, and then it is quite limited to what they are compelled to accept, i.e. things like court papers etc.

.... Further, anti money laundering checks carried out by HSBC on HSBC account holders will not be taken into consideration by first direct when they review the information they hold about customers....

I can see no legal obstacle why the money laundering checks carried out by the HSBC brand could not be used by the First Direct brand, and the other way around. But they have chosen that they do not wish to do this - which is their decision.

masonic

MoneySavingNovice wrote: »

This discussion is really about a point of law, which only becomes significant in the case of legal action. I'm sure that masonic will not agree... but here is a answer to his questions/points anyway.

You are correct that I disagree that this discussion is about a point of law. My view is that this discussion is about the practicalities of being asked for documentation by FD. However, I introduced the term "legal entity", which has given you the foothold to make it about a point of law, so I only have myself to blame for that.

On the contrary, I am willing to defer to your superior legal knowledge. As mentioned, I was only repeating what I was told by an HSBC employee investigating a complaint about an unrelated matter and I am open to the possibility they could have been wrong.

I would be interested to see this. Just looking at the T&C’s of First Directs Current Account, it makes it very clear (admittedly with some legal jargon) that the contract is between the account holder(s) and HSBC Bank plc (see the last page). To clarify this, First Direct is not a party to that contract, as it does not exist as a separate legal entity. You can have multiple parties to a contract without affecting it validity. But my reading of First Directs Current Account contract does not imply that the contract is between anyone other than the account holder(s) and HSBC Bank Plc.

I quoted the part of the contract that I believed supported my position in an earlier post. If a party to a contract can be defined as "first direct, a division of HSBC Bank plc" and that can be clarified to mean HSBC Bank plc itself in another part of the contract, then clearly I am mistaken.

I have seen no evidence to support you statement that ‘HSBC and first direct simply believe they are separate legal entities' The current account T&C’s of First Directs Current Account support the opposite view.

Sorry, m'lud, you've caught me trying to submit hearsay as evidence. All I have is my own testimony of a phone conversation with an HSBC employee. Consider that statement withdrawn.

ChiefGrasscutter

GingerBob wrote: »

Twenty or more year ago banks didn't ask for identification documentation. There are very many people with accounts dating back that far, but it seems only FD are now inconveniencing their customers by requiring retrospective checks. Why? Because of their (HSBC's) own criminal activities. It beggars belief. I suggest any FD customers faced with this imposition should not comply and should change to another bank immediately.

When I wanted to make a withdrawal from an investment/unit trust/OEIC type dating back that sort of time from being originally opened I was required to provide full address and passport ID prior to any withdrawal being approved. I think this has happened on a couple of occassions now.
So these financial services groups are taking the attitude that existing old accounts are OK provided no transactions are done on them - if they are, than full ID to the current requirement has to be provided.

Recently an account of mine was made dormant due to inactivity by a saving group. To re-activate it I had again to send in full certified passport ID and original address ID.