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I think this is a huge problem and one that is going to continue and get worse. How is it the banks were the ones at fault, but the customers are paying for it
by woodylondon 9y ago
I think this is a huge problem and one that is going to continue and get worse. How is it the banks were the ones at fault, but the customers are paying for it. They just hide behind AML / Knowing your customer and say talk to your MP.
I was locked out of internet banking for my business account with Lloyds for over 3 months due to a technical fault in the way it was setup. Was paid compensation in the end, but already had moved to another bank. They could not have cared less.
Some people will say no smoke without fire, but if you read on moneysavingexpert about people being locked out of their personal accounts for the same reason. Any transfer that is slightly different from your day to day will be flagged and risk having your account locked for weeks / months on end.
It happens more than we realise. A bit like winning the lottery, it could be you :(
The further we go down the road of electronic payments, and a cashless society it could get really messy.
The only way to solve in the short term is to spread the risk across many banks, and never keep your money in one place. Keep hold of some cash!
- jacquesm 9y ago> The only way to solve in the short term is to spread the risk across many banks, and never keep your money in one place. This is always good advice, and when you reach the maximum amount for which an account is insured (100K or thereabouts) it is an absolute must. I have my funds spread over five accounts just in case and make sure you note the legal differences between savings accounts and current accounts, the latter may not be insured in case the bank folds depending on where you are.
- millstone 9y agoI think the limit was upped to $250K in the wake of the financial crisis.
- Retric 9y agoJoint accounts are also insured at 250k per person per bank and count separately from individual accounts. So a couple can have 3 accounts 2x 250k + 500k in a joint account at the same bank.
- abritinthebay 9y agoand that couple would be rich enough to afford a financial advisor anyhow.
- seanmcdirmid 9y ago500k is nowhere near rich enough to afford a financial advisor; many people save that much easily for retirement. Maybe 2 million.
- TheCoelacanth 9y agoIf you have 500k in cash in a normal bank account, you are either so financially illiterate that you absolutely need a financial advisor or you are rich enough that you can easily afford a financial advisor.
- seanmcdirmid 9y agoOr you are saving for a down payment for a house in the Bay Area? There are plenty of other good reasons why someone who wasn't rich would have 500k in the bank without significant other investments.
- abritinthebay 9y ago500k as a down payment? Yeah... that would come under rich. In that situation you either are rich enough to save that much AND/OR are rich enough to afford payments on a house where that is a sensible down payment rather than a transfer of equity from a sale.
- seanmcdirmid 9y agoYa, to buy a small simple house. Rich is always relative.
- 9y ago
- ams6110 9y agoI may be mistaken but I thought FDIC deposit insurance didn't apply to business accounts anyway.
- jacquesm 9y agoThis is strongly dependent on the legal entity the OP has chosen to do business with the bank. For some of those there is no coverage, for others the coverage is the same as if the account is a private account. Typically as soon as you incorporate things change but it is very well possible that a small company that is not incorporated (basically an individual trading as a company or freelancer) does have deposit insurance. Regardless it is good practice to know exactly what the state of affairs of your bank accounts are and to really spend some time to read the fine print regarding balances and what will happen to them if the bank should go under or cease operations for whatever reason. In NL by the way DNB will guarantee business accounts as well. Example from Triodos Bank: https://www.triodos.nl/nl/zakelijk/service/veelgestelde-vragen/?faqId=4346 https://www.triodos.nl/nl/zakelijk/service/veelgestelde-vrag... (in Dutch)
- to3m 9y agoPhoton Storm Ltd is a corporation.
- Retric 9y agoI think part of the problem is banks don't make much money from the average account outside of fees. I would rather banks just charged say 20$ a month and had actual customer service instead of the mess big banks evolve into.
- daemin 9y agoBanks already do that for business accounts. Actually depending on the type of account it could be much, much more than that. For reference I used to pay close to $10 / 30 days to have a business account open in Australia. Note that I said every 30 days, not every calendar month. This makes it slightly more expensive than you think.
- pebers 9y agoThe mess the banks are in has very little to do with current accounts being a loss leader.
- cat199 9y ago> I think part of the problem is banks don't make much money from the average account outside of fees Umm.. how about 'using your money to fund interest earning loans'?
- raugustinus 9y agoAnd then fund more loans on those loans. Like fractional reserve banking.
- VHRanger 9y ago> How is it the banks were the ones at fault, but the customers are paying for it. Market power. There are economies of scale in banks, so there are few banks which are huge and can generally afford to act shittily to their customers (unlike in competitive industries). For the record, I don't think breaking up the banks or capping bank size will fundamentally solve the problem either.
- dx034 9y agoRather regulation. Banks have been hit with multi-billion dollar fines because they conducted business with the wrong people. Closing "good" accounts is less risky than paying exorbitant amounts because you failed to do so.
- noir_lord 9y agoI have to pay for my linodes on the gf's credit card because HSBC randomly lock my card for suspicious payments. That payment has gone on the same day of the month to the same place since 2009 and they still randomly do it. Last time was three days before Christmas. HSBC are terrible.
- Sephr 9y agoLinode credit card info has been hacked so many times that I'm not surprised that HSBC is doing this. For any other service, I'd be upset if my bank did this, but Linode is quite literally the least secure paid service I've ever used. I've had multiple credit cards compromised as a direct result of multiple Linode hacks.
- user5994461 9y agoSeriously???
- Sephr 9y agoYes. The last time Linode got hacked while I was still a customer, I learned about it on HN from a third party before Linode even publicly acknowledged the incident. I decided enough was enough, and switched to a less cost-effective provider with a better security track record.
- ben_jones 9y agoCan you substantiate this claim at all (its an unfair question but still)? In todays day and age I wouldn't put it past a close competitor to make posts like yours on tech forums.
- Sephr 9y agoJust Google "Linode hacked" and scroll to your heart's content. The worst incident in my opinion was in 2013. Credit card numbers and password hashes were compromised, and Linode actively denied it until the hackers literally showed proof (which was linked to on HN at the time iirc). I remember reading chat logs that painted Linode as extremely negligent towards security.
- webbrahmin 9y agoThank God such issues are not rampant in India. I guess the Indian central bank the RBI is to thank for it.
- WalterBright 9y ago> spread the risk across many banks That saved me in the 2007 crash, as one account of mine got frozen for a year. Just like it's a bad idea to put all of your investments into one stock.