HSBC, One of the World’s Largest Banks, Makes Customers Provide Proof They Need Money Before Processing Withdrawal Requests
Despite the largest position in my personal household portfolio being Wells Fargo & Company, bought when it was practically being given away for free during the stock market crash, I’m at the point where I think the major global banks should be smashed and, here in the United States, at least, restrictions on inter-state banking put back in place so there is wide geographic diversity in deposit institutions to spur competition and prevent the probability of a banking crisis in the event of another Great Depression.
Stories like this one from BBC News further strengthen that conviction.
HSBC, one of the largest banks on the planet, is now treating customers with reasonably decent size cash reserves as if they are petulant children who must ask for permission to withdraw their own money. The banker, it would seem, knows best and can keep you from your own funds.
One example provided by the journalist who penned the article:
Stephen Cotton went to his local HSBC branch this month to withdraw £7,000 from his instant access savings account to pay back a loan from his mother.
A year before, he had withdrawn a larger sum in cash from HSBC without a problem.
But this time it was different, as he told Money Box: “When we presented them with the withdrawal slip, they declined to give us the money because we could not provide them with a satisfactory explanation for what the money was for. They wanted a letter from the person involved.”
Mr Cotton says the staff refused to tell him how much he could have: “So I wrote out a few slips. I said, ‘Can I have £5,000?’ They said no. I said, ‘Can I have £4,000?’ They said no. And then I wrote one out for £3,000 and they said, ‘OK, we’ll give you that.’ ”
He asked if he could return later that day to withdraw another £3,000, but he was told he could not do the same thing twice in one day.
Mr Cotton cannot understand HSBC’s attitude: “I’ve been banking in that bank for 28 years. They all know me in there. You shouldn’t have to explain to your bank why you want that money. It’s not theirs, it’s yours.”
HSBC says they are making modifications to the policy but admit that the story is true:
Since last November, in some instances we may have also asked these customers to show us evidence of what the cash is required for.
The banking industry is fundamentally broken. Now, the big banks are trying to convince Congress to take away the tax exempt status of credit unions, which are owned by their members and designed to not make a profit, because they don’t want customers fleeing to these alternative competitors.
And what’s worse, the arrogance shown by the British Bankers Association head, who said, “I can understand it’s frustrating for customers. But if you are making the occasional large cash withdrawal, the bank wants to make sure it’s the right way to make the payment.” It’s none of the bank’s damn business how you want to pay someone, or even whether it is efficient or appropriate!