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.
I think the law is the problem. First, banks should not be held responsible for wrong doings by their customers. (think if hosting companies were responsible for the content their customers publish).
Second, the law gives them power without a recourse. This is because the law makes them responsible in case one of their customers were laundering money.
Reasons I can think of for why the banks are responsible for the wrong-doings of their customers, as you put it, is because HSBC among others have been caught laundering money[1] (or at the very least not preventing it). So making them responsible is similar to making barmen responsible for checking IDs before serving alcohol. Sure, the underage drinker is the one perpetuating the crime, but by criminalizing the barman you insist upon a check in the system.
The hosting company comparison doesn't fit, you can publish a myriad of content and quickly to a host, checking all of it, against laws for explicit content and copyright alone would be a mammoth task. Banks only offer financial services they themselves choose to provide. In essence they only provide FTP and the only file you can FTP is a number (to put it simply).
Banks need regulating (is there anyone alive in this day and age who doubts this?), not just on an international level, but locally and for the 'little man' too. My own experience this last year involved making a formal complaint to the consumer financial complaints body where I live about an error made by the bank, freely admitted to by the bank, and the result was "suck it up", including the financial cost. Banking is in a poor state, having lost the faith of the public.
So you are saying we are gonna let banks get away with it because Govts cant find better revenue source ? The amount of overreaching laws just to ensure Govts revenue is staggering. I shudder to think what would happen if UBI is added into the mix.
> So you are saying we are gonna let banks get away with it
I said nothing of the sort.
> overreaching laws just to ensure Govts revenue
Follow the link from my previous post, are you suggesting that laundering the profits from trade in opiates and helping fund terrorism is better than some laws that require banks to be accountable for their actions? Those money laundering transactions are processed for a fee. HSBC made money from people suffering and from people dying/being killed.
It looks to me as though in the case of Mohammad Rahman that the banks have been given a procedure by the government to be followed but have neglected to implement a workable solution, based on there being no recourse for individual customers. It appears, at least in the case of Mohammad Rahman that the bank failed in their duty to the customer while citing "it's not our fault and we don't really care anyway". Followed by "oh shit, bad press! Remedy at 12 o'clock!" but that nothing will change in the long term because they still don't care either morally or ethically.
If banks want to be in the business of banking then they ought to make banking their job and that does not only involve profit at the cost of everyone and everything, not excuse themselves with a shrug every time demands are placed on the banking system.
It isn't irrelevant at all when the law allowing them to seize funds exists directly due to the law being changed in order to prevent HSBC and others having been caught laundering money from cartels and terrorists. It really is not irrelevant.
No. From what I gather, kagamine is saying that the banks should be held responsible for money laundering to a point, much like someone selling alcohol checks a person's ID. They are in the position to spot money laundering and can do things to prevent fraud, just like the person checking an ID for alcohol can stop a crime from happening by doing a simple check.
The last bit gives it away:
"Banks need regulating... not just on an international level, but locally and for the 'little man' too."
In other words, they are only on the hook for fraud, but not for screwing folks over - and we need that regulation.
caught laundering money[1] (or at the very least not preventing it)
Those are of course two totally different things. Money laundering has a very vague definition in law. So banks can never prevent it entirely. That makes a huge difference.
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).
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.
But the government rules do not require the bank to continue to lock up the money even after evidence of legitimacy is provided or to make further errors that prevent the customer from demonstrating the legitimacy in the required way even if they want to. Both of those things appear to have happened here.
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.
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.
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
True - I get calls regularly from people wanting me to invoice through shady schemes involving offshore trusts and "loans" that will never be called in.
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.
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.
> 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?
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.
Unfortunately, even going and seeing your bank in person is no guarantee of getting sensible results.
I've been told I've failed an identity check while on a call from a branch, when that call had been started by a member of staff from that branch who had identified themselves and was standing next to me at the time, while I was in possession of more photo ID and proof of current address than I've ever needed to open any account in my life. And all that member of staff could do afterwards was apologize and share a half-hearted laugh with me as I left.
This happened while signing up for a new service, and ironically I was in the branch in the first place because I'd been unable to answer a security question on a call from my own phone. That was because the only two answers I was allowed to choose were both obviously incorrect, because the subject of that question was also the reason for my call, but again the person on the phone apparently wasn't allowed to accept that and continue.
The article says that he did go and see them in person, several times, and that the bank gave him conflicting incorrect advice and sent him to different departments.
So they're required to review 'unusual' behavior. If you've flagged yourself that there will be some 'unusual' behavior, when their system flags it they're less inclined to decide it's fraudulent activity.
The handling of accounts involved in suspected fraud is very frustrating for the account holder because the bank becomes much less communicative.
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.
I feel your pain. In my case, after being stranded in a foreign country with none of my cards working despite giving the bank advance notice of where and when I'd be abroad, I was told on the phone that an email hadn't gone through from the customer service rep I'd spoken with to the relevant security team. If I could call back on Monday when the security team was in, they could get it all sorted out for me.
I was on holiday for a long weekend, Thursday-Tuesday. It was Friday evening when I called them.
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.
The one time I've had to do a large SWIFT transaction it was in person at the branch, written out on a little piece of paper .. and seemingly lost the moment I stepped out of the branch. Simply vanished with no record of ever having been attempted. Had to do it again a few days later.
Error is everywhere. The important thing is how people and systems detect, assign and recover from it.
Barclays until a couple of years ago did SWIFT transfers by having you fill out a form, having them photocopy your ID, having the teller then fill out more stuff on a form, and then having them fax it to a central office. I used to do this regularly in the years after I moved from Norway as I still had various financial matters in Norway, and it was a pain and also led to several phone calls from said central office to confirm things that were unreadable on their faxed copy...
Nowadays I do all foreign transfers via HiFX (many other banks have a decent system for international transfers so I could set up another account, but I stick to Barclays for my actual bank accounts because the aracane nature of UK credit scoring means that as a non-citizen not on the electoral roll, having a bank account that's been open for a decade and a half is worth a lot in financial flexibility; and while they annoy me, they don't annoy me enough to go through the hassle of operate another account and let it "age" for a few years)
It's not just that - their normal fraud checks are also pretty useless and a nuisance.
For years I regularly had Barclays block my card for things like buying the same plane tickets to fly see my family that I've done every year for more than a decade, from the same airline, to paying for groceries from the same online merchant I've paid for groceries at roughly the same amount every week for a couple of years.
The one instance I've had of fraud, on the other hand, their system didn't catch at all:
Someone paid two credit card bills of 4k each at a bank I've never before transferred money to, for accounts not in my name. I very rarely make big transfers, and certainly have never in my life paid money to a card account not in my name. You'd think that would have set off some red flags and the usual automated call telling me my card has been blocked until I confirm some transactions over the phone. But no.
Now, they were quick to take action and moved the money back into my account near immediately (with a stern warning that if I didn't sign the relevant documents in time to confirm what I had stated to them, the money would be taken back) so I wasn't inconvenienced that much. But having regular, routine payments being blocked semi-regularly while two unusually large transactions to a bank I never transfer to went straight through without additional check made me question what the point of their fraud checks is.
Have you ever had an incident with a bank where you thought "damn, I wish I would have warned them earlier"? Has this advice worked for you? Has it worked for anyone?
In my experience, they do what they want.
Another anecdotal data point with a different UK bank: Recently an acquaintance has found themselves frequently locked out of their account because (according to their fraud team) someone is failing authentication challenges on the phone. My acquaintance has had to visit a branch multiple times to verify their identity and get passwords changed.
So even though someone can't prove who they are, they're locking my acquaintance out. How's that fair?
The kicker was one phone call where (after having discovered the account was locked... again...) the fraud team on the phone sounded incredulous, asking why we hadn't gone in to branch like they asked "last night"? Less than 30 seconds later they noticed last night's call was marked suspicious... that authentication failed... and that that phone call had triggered the lock the account.
The worst part is that no "human" will take your case on. They read from a script and aren't allowed to empathise. No "I'm really sorry, I can see why you're upset" or even "If what you're saying is true, I wouldn't be happy either."
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.
But in those days if something was obviously wrong you could ask to speak to someone more senior, and typically at least the duty manager in the branch had the authority to do something about an obvious problem. Now it seems if the computer says no, you just get a practised smile and some variation of "I'm very sorry, but there's nothing I can do to help you today."
>>“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
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.
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!
To be fair, the max cap of btc transactions may not last forever, with off-chain or alt-chain transactions.
Of course sane banks with good laws are desirable. But bitcoin can be seen as a way to put pressure on the regulating entities, so that the laws are designed with more protections for the citizen.
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.
Many of these can be prevented by multisig and/or a hardware wallet with the seed phrase tucked away.
Sending to the wrong address can be fixed with smart contracts that associate addresses with easier identifiers. Swapping value/fee can be prevented with a simple safety check in the client software, to make sure the fee is reasonable.
It is possible, but sometimes it is not. If you sent money to wrong account, bank can't just take it back from other party account.
On the other hand, I by mistake sent bitcoin to a wrong address and couldn't believe that someone who owned that address sent me all bitcoins back week or so later. There are good souls out there :)
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.
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.
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.
> ...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.
Indeed. I think it would be helpful if our society could have some forum that would make an officially recognised determination of whether someone suspected of criminal activity had actually committed those criminal acts, based on the available evidence either way, on a case by case basis. That same forum would also be well placed to determine any temporary measures that were necessary and proportionate to protect the interests of all concerned until it reached its final decision.
I don't think commercial service providers are likely to be a good choice for that forum, though. We should probably consider something else.
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.
Sure. What I'm saying is that the bank should also face consequential damages when they suspend an account for an extended period of time without a criminal standard of proof. This will help redress the balance. Instead of them "not taking any chances", they will be forced to consider the situation and make a real determination.
Anti-money laundering laws explicitly do not require a criminal standard of proof. This is by design - governments and in particular the US government which insists on all this stuff regardless of what other countries thing absolutely love a system that fights crime, as they see it, without all the hassle of due process and court cases.
AML account closures only require 'suspicion', for example, a name match against a blacklist compiled by a government agency is 'suspicious' even if it wouldn't hold up in a traditional court of law.
And what I'm saying is that government-sanctioned removal of services upon citizens who have broken no law should not be tolerated in a society that values the rule of law.
I absolutely agree. Unfortunately convincing governments to roll back anti-money laundering laws would be like pulling teeth. They only ever make them more aggressive.
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.
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.
>You realise that no bank was fined for _actively_ laundering money?
And no banker was jailed for 2008.
> And by that I mean there was no institutional conspiracy to do so.
That simply means that the conspiracy was too big to reasonably punish. Too many friends of the prosecution would have been hurt, so miraculously nobody was charged.
> But given the potential repercussions, banks are being very cautious. They cannot afford more scandals.
Which is what the OP was saying. We've dumped risk on the banks and now they're hurting legitimate customers to avoid that risk. And because it's essentially mandatory to have a bank, customers are being forced to use services that - like Paypal - will hold their money for months or years without feedback simply because they can.
They don't care that they freeze your accounts and you can't pay your mortgage, they're indemnified against claims from customers. "Oh, sorry, it was vaguely related to anti-money laundering. Check back in 90 days."
It's almost like our governments are trying to make us use non-bank solutions.
"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".
I'm sorry but this is blatantly untrue. Look at any sanctions violation case, for example, and you find examples of stupid emails with bankers saying "DO NOT MENTION <sanctioned country> ANYWHERE ON THIS PAYMENT."
Great, they now face regulatory and reputational risks, and rightly so.
They should be allowed to take steps to prevent themselves from unwittingly supporting laundering, terrorism, etc.
However, those steps should not include STEALING THEIR CUSTOMERS' MONEY, which is no less than this bank did until contacted by the media.
If they decide the person or transaction is insufficiently verifiable to accept, hold, or move the money, fine. Refuse to keep the funds and RETURN THEM TO THE OWNER. Keeping the funds is simply theft.
This is no better than the "asset forfeiture" going on in US police departments who are behaving as robbery gangs.
That might have to go hand in hand with similar time scales and costs of the legal system. Imagine the delay and cost if this had been handled in court. Mr Rahman would still be waiting for a court date and paying an expensive solicitor to prepare his case.
The onus would be on Barclays to make a case. Since they don't have a case, nothing would happen, and Rahman would still have access to his money.
The course of events would be:
1. Rahman receives £500,000.
2. Rahman withdraws £60,000.
3. Barclays considers this suspicious, so suspends Rahman's account for seven days pending further investigation.
4. Rahman presents his evidence of where he got the money in the hope of his account being released in under seven days.
5. Whether Barclays accepts Rahman's evidence or not, they fail to gather a criminal standard of evidence against Rahman within seven days, so release his account anyway, since to keep his account suspended further would be illegal.
If Barclays does not do 5, then sure, Rahman will end up in the same situation now. He'll spend the same amount of time as he did already in getting it resolved. However, when he does get it resolved, Barclays' settlement will include consequential damages for the house he failed to purchase because of Barclays' illegal suspension of his account.
As it stands, since keeping Rahman's account suspended was not illegal for Barclays, they don't really owe him anything, so his settlement is much smaller and he is still out of pocket because his house purchase failed through as a consequence.
> Imagine the delay and cost if this had been handled in court.
The court would have nothing to handle, so Rahman would incur no delay or cost.
I don't think the government will like that. It'll put Barclays in a lose-lose situation. If they are not careful with flagged transactions, they get fined heavily. If they are careful and mistakes happen, they get fined heavily.
Better give them an option where they can be reckless and it has no consequences for the legal system.
Why should this be Barclays' problem at all, though? Beyond perhaps some objective criteria for reporting certain financial transactions to the authorities that deal with things like fraud or money laundering, why should anyone other than official government departments be responsible for making any judgement or taking any other action here? Let the appropriate government departments take official legal action if they think there's a real case to be made, and let them cover the costs of that. Let banks provide banking services and banking customers use them. It's really not complicated or unfair, until someone makes it so.
It is not the banks responsibility. See my other comments.
However, this is an incredible show of incompetence. It is easy to make banks responsible of money laundering. Also easy to make them non-responsible of inappropriately holding customers funds.
Got a problem with that? You can deal in cash or bitcoins then.
>Got a problem with that? You can deal in cash or bitcoins then.
That's an incomplete solution. Cash and Bitcoin are still subject to money laundering regulations. You just reduce the number of instances where they are applied, but you can't completely avoid them
That's not how it started though. Here's how things went:
* government made out of parties voted for because $reason
* 9/11 happened
* government takes measures because terrorism
9/11 (and co) was one of those things few people - especially voters - could've predicted, and in many ways it forced the government's hands - our country is under attack, lots of angry people want to cause trouble, etc.
Mind you, I don't think there's been any strong "we are going to reduce anti-terrorism measures" parties, or if they were they weren't popular.
> Mind you, I don't think there's been any strong "we are going to reduce anti-terrorism measures" parties, or if they were they weren't popular.
There almost can't be. All it takes is one attack of any kind after they relax rules, regardless of whether the relaxation allowed it to happen, and they lose every. single. election. the next cycle.
This is the same with laws like no education for illegal immigrant.
Outside any humane argument, technically the schools are not equipped to determine the legal status of every child parents. Even outside any malicious application (which is by itself a wide opened door) it becomes a forced legal discrimination: the school cannot afford to take risk on children in case they lose their government allowance if his parents are found illegal.
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.
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.
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.
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.
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.
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.
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?
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.
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[ 5.2 ms ] story [ 153 ms ] threadSecond, the law gives them power without a recourse. This is because the law makes them responsible in case one of their customers were laundering money.
The hosting company comparison doesn't fit, you can publish a myriad of content and quickly to a host, checking all of it, against laws for explicit content and copyright alone would be a mammoth task. Banks only offer financial services they themselves choose to provide. In essence they only provide FTP and the only file you can FTP is a number (to put it simply).
Banks need regulating (is there anyone alive in this day and age who doubts this?), not just on an international level, but locally and for the 'little man' too. My own experience this last year involved making a formal complaint to the consumer financial complaints body where I live about an error made by the bank, freely admitted to by the bank, and the result was "suck it up", including the financial cost. Banking is in a poor state, having lost the faith of the public.
1. https://en.wikipedia.org/wiki/HSBC#Controversies
I said nothing of the sort.
> overreaching laws just to ensure Govts revenue
Follow the link from my previous post, are you suggesting that laundering the profits from trade in opiates and helping fund terrorism is better than some laws that require banks to be accountable for their actions? Those money laundering transactions are processed for a fee. HSBC made money from people suffering and from people dying/being killed.
It looks to me as though in the case of Mohammad Rahman that the banks have been given a procedure by the government to be followed but have neglected to implement a workable solution, based on there being no recourse for individual customers. It appears, at least in the case of Mohammad Rahman that the bank failed in their duty to the customer while citing "it's not our fault and we don't really care anyway". Followed by "oh shit, bad press! Remedy at 12 o'clock!" but that nothing will change in the long term because they still don't care either morally or ethically.
If banks want to be in the business of banking then they ought to make banking their job and that does not only involve profit at the cost of everyone and everything, not excuse themselves with a shrug every time demands are placed on the banking system.
No. From what I gather, kagamine is saying that the banks should be held responsible for money laundering to a point, much like someone selling alcohol checks a person's ID. They are in the position to spot money laundering and can do things to prevent fraud, just like the person checking an ID for alcohol can stop a crime from happening by doing a simple check.
The last bit gives it away: "Banks need regulating... not just on an international level, but locally and for the 'little man' too."
In other words, they are only on the hook for fraud, but not for screwing folks over - and we need that regulation.
Those are of course two totally different things. Money laundering has a very vague definition in law. So banks can never prevent it entirely. That makes a huge difference.
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).
But the government rules do not require the bank to continue to lock up the money even after evidence of legitimacy is provided or to make further errors that prevent the customer from demonstrating the legitimacy in the required way even if they want to. Both of those things appear to have happened here.
Most people earn far less, and only ever transfer such large amounts when they buy a car.
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...
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.
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.
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?
I've been told I've failed an identity check while on a call from a branch, when that call had been started by a member of staff from that branch who had identified themselves and was standing next to me at the time, while I was in possession of more photo ID and proof of current address than I've ever needed to open any account in my life. And all that member of staff could do afterwards was apologize and share a half-hearted laugh with me as I left.
This happened while signing up for a new service, and ironically I was in the branch in the first place because I'd been unable to answer a security question on a call from my own phone. That was because the only two answers I was allowed to choose were both obviously incorrect, because the subject of that question was also the reason for my call, but again the person on the phone apparently wasn't allowed to accept that and continue.
The handling of accounts involved in suspected fraud is very frustrating for the account holder because the bank becomes much less communicative.
I was on holiday for a long weekend, Thursday-Tuesday. It was Friday evening when I called them.
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.
Error is everywhere. The important thing is how people and systems detect, assign and recover from it.
Nowadays I do all foreign transfers via HiFX (many other banks have a decent system for international transfers so I could set up another account, but I stick to Barclays for my actual bank accounts because the aracane nature of UK credit scoring means that as a non-citizen not on the electoral roll, having a bank account that's been open for a decade and a half is worth a lot in financial flexibility; and while they annoy me, they don't annoy me enough to go through the hassle of operate another account and let it "age" for a few years)
For years I regularly had Barclays block my card for things like buying the same plane tickets to fly see my family that I've done every year for more than a decade, from the same airline, to paying for groceries from the same online merchant I've paid for groceries at roughly the same amount every week for a couple of years.
The one instance I've had of fraud, on the other hand, their system didn't catch at all:
Someone paid two credit card bills of 4k each at a bank I've never before transferred money to, for accounts not in my name. I very rarely make big transfers, and certainly have never in my life paid money to a card account not in my name. You'd think that would have set off some red flags and the usual automated call telling me my card has been blocked until I confirm some transactions over the phone. But no.
Now, they were quick to take action and moved the money back into my account near immediately (with a stern warning that if I didn't sign the relevant documents in time to confirm what I had stated to them, the money would be taken back) so I wasn't inconvenienced that much. But having regular, routine payments being blocked semi-regularly while two unusually large transactions to a bank I never transfer to went straight through without additional check made me question what the point of their fraud checks is.
In my experience, they do what they want.
Another anecdotal data point with a different UK bank: Recently an acquaintance has found themselves frequently locked out of their account because (according to their fraud team) someone is failing authentication challenges on the phone. My acquaintance has had to visit a branch multiple times to verify their identity and get passwords changed.
So even though someone can't prove who they are, they're locking my acquaintance out. How's that fair?
The kicker was one phone call where (after having discovered the account was locked... again...) the fraud team on the phone sounded incredulous, asking why we hadn't gone in to branch like they asked "last night"? Less than 30 seconds later they noticed last night's call was marked suspicious... that authentication failed... and that that phone call had triggered the lock the account.
The worst part is that no "human" will take your case on. They read from a script and aren't allowed to empathise. No "I'm really sorry, I can see why you're upset" or even "If what you're saying is true, I wouldn't be happy either."
“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.
From experience, nor do the wage slaves simply enforcing the 'rules' as dictated by their employers.
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
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.
Bitcoin isn't the answer. Sane banks with good laws, however are.
Of course sane banks with good laws are desirable. But bitcoin can be seen as a way to put pressure on the regulating entities, so that the laws are designed with more protections for the citizen.
Not necessarily defending it, but please name the bigotry correctly.
- lose key to wallet
- lose wallet due to inadequate backups
- lose contents of "brainwallet" due to weak password
- lose wallet/contents due to malware targeting bitcoin
- lose wallet/contents due to bug in client software (recommendations change frequently)
- send to merchant, defrauded in the old-fashioned way
- keep on exchange for trading, exchange collapses
- erroneously swap transaction value and transaction fee, or other fat-finger errors
- erroneously send to wrong or non-existent target address
Sending to the wrong address can be fixed with smart contracts that associate addresses with easier identifiers. Swapping value/fee can be prevented with a simple safety check in the client software, to make sure the fee is reasonable.
not possible with bitcoin
On the other hand, I by mistake sent bitcoin to a wrong address and couldn't believe that someone who owned that address sent me all bitcoins back week or so later. There are good souls out there :)
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.
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.
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.
I don't think commercial service providers are likely to be a good choice for that forum, though. We should probably consider something else.
AML account closures only require 'suspicion', for example, a name match against a blacklist compiled by a government agency is 'suspicious' even if it wouldn't hold up in a traditional court of law.
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.
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.
No way. Even a cursory examination will find many cases where banks were suspected of actively facilitating criminal activity.
And no banker was jailed for 2008.
> And by that I mean there was no institutional conspiracy to do so.
That simply means that the conspiracy was too big to reasonably punish. Too many friends of the prosecution would have been hurt, so miraculously nobody was charged.
> But given the potential repercussions, banks are being very cautious. They cannot afford more scandals.
Which is what the OP was saying. We've dumped risk on the banks and now they're hurting legitimate customers to avoid that risk. And because it's essentially mandatory to have a bank, customers are being forced to use services that - like Paypal - will hold their money for months or years without feedback simply because they can.
They don't care that they freeze your accounts and you can't pay your mortgage, they're indemnified against claims from customers. "Oh, sorry, it was vaguely related to anti-money laundering. Check back in 90 days."
It's almost like our governments are trying to make us use non-bank solutions.
http://www.rollingstone.com/politics/news/outrageous-hsbc-se...
"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".
They should be allowed to take steps to prevent themselves from unwittingly supporting laundering, terrorism, etc.
However, those steps should not include STEALING THEIR CUSTOMERS' MONEY, which is no less than this bank did until contacted by the media.
If they decide the person or transaction is insufficiently verifiable to accept, hold, or move the money, fine. Refuse to keep the funds and RETURN THEM TO THE OWNER. Keeping the funds is simply theft.
This is no better than the "asset forfeiture" going on in US police departments who are behaving as robbery gangs.
That might have to go hand in hand with similar time scales and costs of the legal system. Imagine the delay and cost if this had been handled in court. Mr Rahman would still be waiting for a court date and paying an expensive solicitor to prepare his case.
The course of events would be:
1. Rahman receives £500,000. 2. Rahman withdraws £60,000. 3. Barclays considers this suspicious, so suspends Rahman's account for seven days pending further investigation. 4. Rahman presents his evidence of where he got the money in the hope of his account being released in under seven days. 5. Whether Barclays accepts Rahman's evidence or not, they fail to gather a criminal standard of evidence against Rahman within seven days, so release his account anyway, since to keep his account suspended further would be illegal.
If Barclays does not do 5, then sure, Rahman will end up in the same situation now. He'll spend the same amount of time as he did already in getting it resolved. However, when he does get it resolved, Barclays' settlement will include consequential damages for the house he failed to purchase because of Barclays' illegal suspension of his account.
As it stands, since keeping Rahman's account suspended was not illegal for Barclays, they don't really owe him anything, so his settlement is much smaller and he is still out of pocket because his house purchase failed through as a consequence.
> Imagine the delay and cost if this had been handled in court.
The court would have nothing to handle, so Rahman would incur no delay or cost.
Better give them an option where they can be reckless and it has no consequences for the legal system.
However, this is an incredible show of incompetence. It is easy to make banks responsible of money laundering. Also easy to make them non-responsible of inappropriately holding customers funds.
Got a problem with that? You can deal in cash or bitcoins then.
That's an incomplete solution. Cash and Bitcoin are still subject to money laundering regulations. You just reduce the number of instances where they are applied, but you can't completely avoid them
9/11 (and co) was one of those things few people - especially voters - could've predicted, and in many ways it forced the government's hands - our country is under attack, lots of angry people want to cause trouble, etc.
Mind you, I don't think there's been any strong "we are going to reduce anti-terrorism measures" parties, or if they were they weren't popular.
There almost can't be. All it takes is one attack of any kind after they relax rules, regardless of whether the relaxation allowed it to happen, and they lose every. single. election. the next cycle.
Outside any humane argument, technically the schools are not equipped to determine the legal status of every child parents. Even outside any malicious application (which is by itself a wide opened door) it becomes a forced legal discrimination: the school cannot afford to take risk on children in case they lose their government allowance if his parents are found illegal.
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.
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.
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.
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.
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?
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.