
Customers are getting caught up as banks de-risk due to money laundering laws - csomar
https://www.theguardian.com/money/2017/jan/22/barclays-took-my-440000-customers-caught-up-banks-de-risking-money-laundering-laws
======
rlpb
> ...if criminal behaviour is suspected, facilities can be legally withdrawn.

This is unacceptable. The UK government has pushed all the risk to the bank,
and this quasi-legal removal of the rule of law with respect to citizens
having control of their own money is the result.

It should not be legal for the bank to withdraw access to funds for an
extended period of time without a criminal standard of evidence.

~~~
retube
It's a direct result of the regulatory and reputational risks that banks now
face. Threatened with multi-billion dollar fines for facilitating money
laundering they're not taking any chances.

~~~
wavefunction
I suppose the many banks that have been fined for _actively_ laundering money
shouldn't have done that then, casting a pall as it has over the entire
industry.

It's always 'boohoo the Banks are so troubled' but how hard is it to refrain
from actively laundering money for drug cartels or third world despots or any
number of other illicit sources? How hard is it to refrain from rigging the
LIBOR or selling sub-prime CDOs to your clients to clear your own books after
marking years of profit building up another debt bubble?

I have very little patience or sympathy for the modern banking industry and
their travails screwing the rest of us over, and getting off with rather
unimpressive fines, if we're honest.

This guy had his entire account seized. What if the banks were fined
commensurate to their profits and they really started to feel the pinch? That,
combined with personal liability for the officers involved with these scandals
would certainly clean the problem up expeditiously.

~~~
retube
You realise that no bank was fined for _actively_ laundering money? And by
that I mean there was no institutional conspiracy to do so. The money
laundering that occurred was facilitated by a very small number of low-level
staff who hid what were doing (e.g cashiers in branches), plus a slightly
larger number who didn't pick up the activity.

What the banks were fined for was insufficient controls to detect laundering,
not laundering itself. Banks process 100s of millions of transactions a day,
including taking large numbers of cash deposits in developing countries like
Mexico. It is _incredibly_ hard to build a framework which reliably detects
suspicious activity without a lot of false positives. But given the potential
repercussions, banks are being very cautious. They cannot afford more
scandals.

~~~
FireBeyond
That is absolutely not true. There is evidence from HSBC at executive levels
that they knew exactly what was going on:

[http://www.rollingstone.com/politics/news/outrageous-hsbc-
se...](http://www.rollingstone.com/politics/news/outrageous-hsbc-settlement-
proves-the-drug-war-is-a-joke-20121213)

"As a result of the government's investigation, HSBC has . . . "clawed back"
deferred compensation bonuses given to some of its most senior U.S. anti-money
laundering and compliance officers, and agreed to partially defer bonus
compensation for its most senior officials during the five-year period of the
deferred prosecution agreement."

Faced with a lot of this knowledge, HSBC officials stated that to implement
more AML would reduce profitability, and as such, they should "change their
position".

------
tomxor
This isn't just the government changing laws... Barclays has recently shown a
very blasé attitude towards closing accounts. I was a victim of this:

Being an existing customer for many years, I opened a shared account with my
partner for paying bills etc. It's used for very specific purpose, with
regular payments in and out and a stable balance. never more than 2k.

After a few months with the account Barclays sent us a letter notifying us
that they will be closing the account due to us ignoring multiple requests for
proof of identity (we never received any, and also needed to give this to open
the account in the first place a few months ago anyway).

The letter ended with "we will not be able to offer you any services in the
future"... In branch - no explanation, they told us we can only continue to
hold the account if we provide identity (again) and gave no explanation as to
the "final" nature of the letter or what prompted it.

This is what happens when you automate account management and just plug some
new rules in without thinking... Roll on bitcoin for utility companies.

------
Silhouette
The most important points in the article seem to be summed up in just a few
lines:

“Customers making and receiving genuine transactions have absolutely nothing
to fear,” a [Barclays] spokesperson says.

Except Rahman is not a criminal and has spent three months without access to
his money. He might still be without it if the _Observer_ had not intervened
shortly before Christmas.

The rest is a sad but educational story of how much we now depend on big
business to live normal lives and how the big, automated systems used by those
businesses make no allowances for the human consequences when they make
mistakes.

~~~
gambiting
>>“Customers making and receiving genuine transactions have absolutely nothing
to fear,” a [Barclays] spokesperson says.

the problem with this statement is exactly the same as with the "if you have
nothing to hide, you have nothing to fear" argument. What if you get flagged
up as a terrorist in some database somewhere, because you sent an email to a
friend from Iran that you met at uni? Suddenly, your entire life is turned
upside down, and there's no easy way to fix it. But hey, if you have nothing
to hide, you wouldn't have this problem, right??? /s

~~~
Silhouette
_Suddenly, your entire life is turned upside down, and there 's no easy way to
fix it._

Yes, this is a real and apparently increasing problem in our increasingly
impersonal and automated society. It's not just malice that can get you, it's
also incompetence, and everyone has something to fear from that.

~~~
rrobukef
Incompetence? Try randomness. 'There is only a one in a million chance of
wrongly detecting fraud' means it happens every day. The incompetence starts
after this!

------
torrent-of-ions
So people are starting to realise that they can't actually trust the
organisations that control their money. I wonder if this sort of thing will
raise awareness about who we actually trust, and whether we should be trusting
anyone at all.

~~~
candiodari
If the purpose behind is is to get the government to force banks to
responsibly handle money ... you forget it's the government that requires
these rules in the first place. Barclays obviously carries the biggest part of
the blame, but when consulting for a bank, we were constantly reminded that
there are EU regulations stating that any transaction above 10.000 euros is to
be automatically flagged and reported, and if such a transaction is "unusual"
(yes that's what the government rule says), it is to be blocked, along with
all other transactions on the account, until evidence is provided that the
transaction was (a) legitimate (b) not made with the purpose of evading tax.
Note that the owner of the blocked account needs to prove the tax department
has no issues (for instance a letter stating no outstanding debts).

If Barclays is anything like my local banks, it sucks, but chances are they're
not doing this just to spite their customers.

Since that job I carry 1000 euros in cash in my wallet, and never again shall
I have a single bank account again. I managed to have a third account in a
separate country last year under a not-identical name (if you're married in
the EU chances are you have the right to use any combination of yours and your
spouses names, including both of them with or without a dash in between).

~~~
informatimago
Notice that 10,000 euros is nothing; as a free lance consultant, you can
invoice easily much more than that monthly. So basically they're tracking
everybody.

~~~
vidarh
While I agree it's not a high amount claiming that accounts to "basically
tracking everybody" is ludicrous. Someone billing 10k Euro a month would
easily be in the top 10% earners pretty much everywhere.

E.g. in the UK, assuming thats 10k of income before tax would place you in the
97th percentile [1]. Even half that would place you in the 90th percentile.

Most people never transfer amounts higher than that other than as part of e.g.
a house or car purchase.

[1] [https://www.gov.uk/government/statistics/percentile-
points-f...](https://www.gov.uk/government/statistics/percentile-points-
from-1-to-99-for-total-income-before-and-after-tax)

~~~
Xylakant
You obviously have never worked as a freelance consultant. 10k per month is
not unusual. That figure includes all cost and taxes, usually even VAT. It
also includes all travel-related expenses which can easily exeed thousand EUR
if you need to be on-site for a month. It's not even close to 10k personal
income in the end

~~~
vidarh
I _do_ work as a freelance consultant right now. I agree that 10k per month is
not unusual for consultants, but that was not what I disagreed with.

I disagreed with the conclusion that this means tracking basically everyone,
and I gave evidence of this not being the case for the UK, where if your gross
income before tax is even half that, it puts you in the 90th percentile of
earners.

Even _1 /3_ of that would place you in the 77th percentile. I've never been
close to taking out less than 1/3 of what I invoice. But just in case:

The 50th percentile for the UK is GBP 21k/year, or a bit over 24k Euro/year
according to the source I provided.

~~~
Spooky23
It's more common than you think. Many poorer populations don't trust or
understand banking, or work under the table. Either way, they stash pipes of
cash.

It's not uncommon for these folks to make huge cash deposits to buy a car or
whatever.

In the US, the $10,000 threshold is a formal number that requires a specific
form. $5,000 transactions are reported, and a bank official can flag any
transaction. Former NY governor Spitzer was caught patronizing escorts when a
bank official flagged a smaller transaction as a potential "structuring"
attempt.

~~~
dpark
> _It 's more common than you think. Many poorer populations don't trust or
> understand banking, or work under the table. Either way, they stash pipes of
> cash._

If you're poor, you're probably not stashing tens of thousands in cash. I bet
the percentage of people who both qualify as poor and have $10K in cash on
hand is low single digits.

> _It 's not uncommon for these folks to make huge cash deposits to buy a car
> or whatever._

Why would you deposit $10K to buy a car instead of carrying your cash to the
car dealer? Also, why are you buying a car that costs >$10K if you're poor?

------
muse900
I personally think he should seek with his solicitor if there is a way to
claim that the bank withhold his legally acquired money for 3 months and have
them pay way more than the around £9k they are trying to get away with.

Barclays is bad with legalities I had issues with them in the past but I guess
every bank is... They asked me to come in and proof my address while I have an
account with them for over 10 years, money comes in and out every month from
my employer, I got a credit card with them as well etc etc and generally I
bank with them for 10 years without ever doing anything suspicious... I found
it very odd that they asked me to go in and verify me address after that
long... then I read online they've done it to many others including a guy
working as a bank manager with them.

~~~
krona
I know people who have had the same experience (e.g. having to prove their
identity on multiple occasions.) Mentioning the words "Bob Diamond" seemed to
be the most efficient way to resolve the issue.

------
arca_vorago
A few years ago a few researchers started using math to map inter-corporate
board ties and ownership structures and came out with the conclusion that
there were 147 mega corporations with more power than imagined.

At the top of that list, was Barclay's. When you are that powerful, with that
much money, consequences essentially don't exist.

Welcome to the future, neo feudal corporate oligarchy.

~~~
Neliquat
Link/Source?

~~~
arca_vorago
[https://arxiv.org/PS_cache/arxiv/pdf/1107/1107.5728v2.pdf](https://arxiv.org/PS_cache/arxiv/pdf/1107/1107.5728v2.pdf)

------
xbmcuser
Wow this is bullshit government doesn't want you to use cash but then if you
keep your money in a bank the bank is allowed to take it.

~~~
chaz6
Precisely, if your money is in a bank, the government controls it. We need to
bring back the gold standard ASAP.

------
sleepychu
It hurts but I've just accepted I need to go and see my bank in person if I'm
doing anything 'unusual' in the near future. The alternative is ending up in
this situation where they _cannot_ talk to you because your account is subject
to ongoing fraud investigation and the people investigating you _do not_ care
because the potential fraud is so inconsequential.

~~~
blowski
I went to my bank in person to tell them I was going abroad for some time -
gave them dates, locations, etc. The rep put a note on my account, but it was
still frozen due to suspicious activity. I could only reopen it by visiting a
branch in person. That was 10 years ago.

~~~
midgetjones
I had the opposite experience - I worked on cruise ships for two years without
telling my bank. Drew money out and used my card, sometimes in different
countries on consecutive days, without a single issue.

Came home, got a day job, and my card got flagged for 'suspicious activity'
when I started following the same pattern every day of buying a train ticket
and lunch from the same shop. If that's suspicious, there must be some really
unimaginative fraudsters out there.

------
samdoidge
This is why I believe Bitcoin can succeed.

~~~
019801200
If Bitcoin succeeds, out totalitarian governments will find a way to control
it.

There is no longer any banking secrecy, no telephone secrecy, and there won't
be computing secrecy if the civil servant parasites fear that their pensions
are at stake.

~~~
elcct
In order for socialism to work, it needs access to every bit of money a worker
earns so the part of it can be successfully redistributed. Because countries
that implement socialism sooner or later will run out of money (as socialism
by its nature is not sustainable), they will go to enormous lengths to
discover any funds that are not declared and can be redistributed. Some
countries are so desperate they want to stop using the cash at all. Humanity
will always find solution to the oppression, one is the Bitcoin.

------
nommm-nommm
In the US a while ago Citibank had a promotion that required signing up for a
new account and depositing $15,000. So I did. My account was then frozen for
"suspicious activity" due to a "large transfer into a new account" until I
called them. Luckily a phone call was enough for them to unfreeze my account.

I just found it so odd to consider doing a promotional requirement as
suspicious... and I didn't know how long they could just keep my funds frozen
like that. Seemed sketchy. What if I had checks that needed to clear?

------
popol12
One more reason to use Bitcoin.

~~~
kefka
yeah, because we can introduce a max cap of 5 transactions/second. Sounds like
a great idea :/

Bitcoin isn't the answer. Sane banks with good laws, however are.

~~~
dnautics
did you not notice how this 'good law' suddenly became racist?

~~~
Ensorceled
It's not racist, it's nationalist. I'm sure it's not flagging Japanese because
they come from a low crime country despite they're being of non Northern
European descent.

Not necessarily defending it, but please name the bigotry correctly.

------
jackskell
I've been discussing basic cash solvency with my small circle of influence for
years. My credibility went up with the folks when I had to wire thousands of
dollars to them when they were vacationing in Europe.

And, if I were in this man's situation, my second stop would have been the
local FBI office to report bank theft. ACTUAL bank theft.

------
id122015
So first he received £500000 in compensation benefits, and now he receives yet
more £8000 as compensation for compensation.

------
crististm
Analogy.

This is a problem in telecommunications as well. You broadcast a strong signal
and foreign stations pick up your message. A solution is to use spread-
spectrum and go below the margin of spectral noise.

In this case, random, small transactions much less than the threshold for
scrutiny.

~~~
zb
Note that, unlike anything the guy in the article did, what you're suggesting
actually _is_ illegal. He at least got his money back eventually because he
was demonstrably 100% above-board. If you get caught structuring transactions
to avoid scrutiny - and your strategy is probably not nearly as sophisticated
as you think - then you will not be so lucky. Do not try this.

