Unauthorised reversal of fund transfer by HSBC

ChewyyBacca

Hi All
I had transferred all my funds from HSBC acct into my account with other bank. I first did a test transfer of a very small amount, which was reflected in another bank account in 5 mins time. Then I transferred £1.5 K from HSBC to another bank. The credit in other account didn't happen for 3 hours, so I asked HSBC on online Chat about it, and they assured me that credit will happen by EOD. I am aware all the banks are careful when outward fund transfer is initiated, and are doing extensive fraud checks. Thats why I enquired if any call was initiated to me, I was told records indicate none.
I patiently waited to see fund transfer, and when checked late evening around 7:30 pm I found HSBC acct with all the money. I was livid to see they willy nilly rejecting my transfer request. 
Again, on online chat, I was told that fraud alert was raised and the team rejected fund transfer. Also, no calls were made to me.
Its beyond my understanding - why wouldn't HSBC want to establish the legitimacy of the transaction by contacting me? Isn't the bank just custodian of clients money? But in this case, they acted like they are the owner of my money. I am utterly disappointed to see the behemoth of a bank, not following procedures and canceling trasanctions.
I have raised a complaint already, to no avail.
What would you all suggest me do? I do want to ruffle their feathers.
PS: I have briefly worked with them in the past, I know they have no morals, they don't follow rules in the spirit and are predatory in nature when it comes to fees and charges. Rich people with loud voices get their way (charges reversed, even compensation) while I have seen pensioners and vulnerable's money taken away.

dave1345

ChewyyBacca said:

 Isn't the bank just custodian of clients money? But in this case, they acted like they are the owner of my money.

It does seem very unusual that they wouldn't try to contact you. That said, I had a similar incident with Nationwide recently when making a payment to NS&I but in that case the money arrived back instantly and I just tried again later.

Regarding your comment above, many people make the mistake of thinking this is how banking works. When you deposit the money it becomes property of the bank in a legal sense and they are bound by law to protect that money. In addition if they do something wrong in terms of handling the money (i.e. allow it to be transferred fraudulently) the loss is theirs not yours because it is their money. Of course, in an everyday banking sense the issue of whose money it is doesn't come in to play because most transactions run smoothly.

I would ask them to explain why the transfer was rejected and if they can't do that raise a formal complaint about the fact that they can't explain why they rejected it and that you are concerned that you won't be able to do banking with them smoothly as you have done in the past.

dunstonh

I am aware all the banks are careful when outward fund transfer is initiated, and are doing extensive fraud checks. Thats why I enquired if any call was initiated to me, I was told records indicate none.

The call centre or branch staff wouldn't know if there are any internal security checks being carried out.

I was livid to see they willy nilly rejecting my transfer request. 

I am sure it was not willy nilly.

Isn't the bank just custodian of clients money?

It is also liable for people that naively send money to fraudsters (or stupidly send money depending on which side of the fence you sit on).

What would you all suggest me do? I do want to ruffle their feathers.

You are not going to ruffle feathers.    So, why waste energy on such futile things.   You only have a finite time alive. Spend it wisely.

I had transferred all my funds from HSBC acct into my account with other bank. I first did a test transfer of a very small amount, which was reflected in another bank account in 5 mins time. 

So, you made yourself look like a fraudster  (the small transaction followed by a larger one being a common indicator of potential fraud).

RG2015

dunstonh said:

I had transferred all my funds from HSBC acct into my account with other bank. I first did a test transfer of a very small amount, which was reflected in another bank account in 5 mins time. 

So, you made yourself look like a fraudster  (the small transaction followed by a larger one being a common indicator of potential fraud).

I frequently do this to validate first payments although with CoP this will cease to be necessary if the payee is confirmed.

I am not sure that a fraudster would bother with an initial small payment.

London7766551

HSBC are very strict with normal banking customers. They have been stung before. I believe there are a number of factors which would have caused this transfer to flag up. Did you get money from any dodgy places or do you send lots of money elsewhere? They didn't like something about your account and this transfer. They normally send a text however. 

billn

Was this a newly opened HSBC account? I had a similar thing happen see https://forums.moneysavingexpert.com/discussion/6196838/hsbc#latest and that was a newly opened HSBC account, they do seem very keen on security,having said that so do Santander, I was setting up a standing order and received an automated call to verify that it was me doing it, so it seems to be the way things are going now.

Op did you try to transfer the money again later?

ChewyyBacca

dave1345 said:

ChewyyBacca said:

 Isn't the bank just custodian of clients money? But in this case, they acted like they are the owner of my money.

It does seem very unusual that they wouldn't try to contact you. That said, I had a similar incident with Nationwide recently when making a payment to NS&I but in that case the money arrived back instantly and I just tried again later.

Regarding your comment above, many people make the mistake of thinking this is how banking works. When you deposit the money it becomes property of the bank in a legal sense and they are bound by law to protect that money. In addition if they do something wrong in terms of handling the money (i.e. allow it to be transferred fraudulently) the loss is theirs not yours because it is their money. Of course, in an everyday banking sense the issue of whose money it is doesn't come in to play because most transactions run smoothly.

I would ask them to explain why the transfer was rejected and if they can't do that raise a formal complaint about the fact that they can't explain why they rejected it and that you are concerned that you won't be able to do banking with them smoothly as you have done in the past.

dave1345 It seemed very unusual to me too. In June, my sister and uncle transferred their funds held in HSBC account into NS&I, and they were promptly called  asking for verification and confirming that they are doing the transaction of their own accord and the bank wont be responsible for any claim afterwards if it turns out to be a fraud.
Im not sure about banks becoming legal owners, they have custodial authority over the assets and by regulation they are supposed to protect the interest of their customers. As explained before, banks get the confirmation from customers- either written or verbal to get indemnity when a fraud occurs. In case indemnity is not in place, the bank May be liable, if it is proven they didn't take due care and didn't have robust processes to protect customers.
I have raised a complaint with them, not a peep though from them.

ChewyyBacca

dunstonh said:

I am aware all the banks are careful when outward fund transfer is initiated, and are doing extensive fraud checks. Thats why I enquired if any call was initiated to me, I was told records indicate none.

The call centre or branch staff wouldn't know if there are any internal security checks being carried out.

I was livid to see they willy nilly rejecting my transfer request. 

I am sure it was not willy nilly.

Isn't the bank just custodian of clients money?

It is also liable for people that naively send money to fraudsters (or stupidly send money depending on which side of the fence you sit on).

What would you all suggest me do? I do want to ruffle their feathers.

You are not going to ruffle feathers.    So, why waste energy on such futile things.   You only have a finite time alive. Spend it wisely.

I had transferred all my funds from HSBC acct into my account with other bank. I first did a test transfer of a very small amount, which was reflected in another bank account in 5 mins time. 

So, you made yourself look like a fraudster  (the small transaction followed by a larger one being a common indicator of potential fraud).

You may be right about that @dunstonh. The call centre staff rarely has access to the applications that Fraud team may be using. 
Well, there was no attempt to reach me and get a confirmation, they just cancelled the transaction. The fund transfer was between Chewy's HSBC account to Chewy's XYZ bank account; not some Nigerian Prince account (that should certainly raise alarm bells) 
And alas, you are right here. they are too big to take on. None of the Regulators can catch this cat by its bells, I am a nobody.
About, small amounts being transferred-  well it is a good practice to always do a test amount transfer, before sending a large amount. Once the money leaves your account, you may be unprotected. Banks try to wriggle out of their responsibilities.
I always, always send a small amount, when a new account is opened.

ratechaser

ChewyyBacca said:

dunstonh said:

I am aware all the banks are careful when outward fund transfer is initiated, and are doing extensive fraud checks. Thats why I enquired if any call was initiated to me, I was told records indicate none.

The call centre or branch staff wouldn't know if there are any internal security checks being carried out.

I was livid to see they willy nilly rejecting my transfer request. 

I am sure it was not willy nilly.

Isn't the bank just custodian of clients money?

It is also liable for people that naively send money to fraudsters (or stupidly send money depending on which side of the fence you sit on).

What would you all suggest me do? I do want to ruffle their feathers.

You are not going to ruffle feathers.    So, why waste energy on such futile things.   You only have a finite time alive. Spend it wisely.

I had transferred all my funds from HSBC acct into my account with other bank. I first did a test transfer of a very small amount, which was reflected in another bank account in 5 mins time. 

So, you made yourself look like a fraudster  (the small transaction followed by a larger one being a common indicator of potential fraud).

You may be right about that @dunstonh. The call centre staff rarely has access to the applications that Fraud team may be using. 
Well, there was no attempt to reach me and get a confirmation, they just cancelled the transaction. The fund transfer was between Chewy's HSBC account to Chewy's XYZ bank account; not some Nigerian Prince account (that should certainly raise alarm bells) 
And alas, you are right here. they are too big to take on. None of the Regulators can catch this cat by its bells, I am a nobody.
About, small amounts being transferred-  well it is a good practice to always do a test amount transfer, before sending a large amount. Once the money leaves your account, you may be unprotected. Banks try to wriggle out of their responsibilities.
I always, always send a small amount, when a new account is opened.

And that last point is, IMHO, perfectly reasonable. I do exactly the same with new accounts to test the pipes and plumbing (so to speak), and obviously make certain that I've not mistyped the details when setting up the payee.

Unfortunately, this is also part of the fraudsters playbook. I've had situations where (for example) a credit card has been used to buy an ice cream in a far flung country, just to see if it 'works' ahead of a much larger transaction - fortunately that then got blocked.

ChewyyBacca

London7766551 said:

HSBC are very strict with normal banking customers. They have been stung before. I believe there are a number of factors which would have caused this transfer to flag up. Did you get money from any dodgy places or do you send lots of money elsewhere? They didn't like something about your account and this transfer. They normally send a text however. 

They have been stung because their Risk management systems are ancient. They move very slow, don't always react to the changes. (Reference to Ultimatum given by American Regulators to rehaul their processes, a 1.7 bn fine slapped on them)
The money has been lying there for 2 years, collecting dust (my bad, should have removed long time back). No Dodgy connections, source of funds = salary. Also 4 year old account.

ChewyyBacca

billn said:

Was this a newly opened HSBC account? I had a similar thing happen see https://forums.moneysavingexpert.com/discussion/6196838/hsbc#latest and that was a newly opened HSBC account, they do seem very keen on security,having said that so do Santander, I was setting up a standing order and received an automated call to verify that it was me doing it, so it seems to be the way things are going now.

Op did you try to transfer the money again later?

Nah billn , 4 year old account.
When a new account is opened, it is automatically entered into different AML applications, every transaction is monitored for some initial months and flagged,  especially cash deposits. Branch staff and/or fraud team regularly calls the customers to check source of funds and unflag the particular transactions. All banks do that, its a regulatory requirement. Some banks do it more than others, more fancy applications, using AI and all, their ways may differ, but basics are the same, for regulatory reporting purpose.
During late evening chat, I told them i will transfer money again, and they better not reject it, without talking to me. Initiated transfer around 9 pm with next date transaction date. When I checked phone at 9 am, transfer was complete.