5 ms·

Not sure if you're in the US? where that maybe possible. In the UK this is not that simple. Not even sure how you would sue them, their T&C would cover this u

Not sure if you're in the US? where that maybe possible. In the UK this is not that simple. Not even sure how you would sue them, their T&C would cover this under AML / Knowing your customer legislation. The problem is the knee jerk reaction from the government on stopping the bank's bad practices without thinking what happens, in reality, day to day.

umanwizard 9y ago
So in the UK it's legal for banks to simply shut down your account and steal your money, and you have no recourse? Seems hard to believe. Apparently, from his profile, the guy you responded to is from the Netherlands.
- djmobley 9y ago
  There's nothing to suggest the Bank have "stolen" OP's money.
  - alistairSH 9y ago
    Would you prefer "holding the OP's money hostage"? Call it what you will, it doesn't make the situation any less ridiculous.
  - qubex 9y ago
    Actually, and somewhat counter-intuitively, money you put into a bank account belongs to the bank, as an account-holder you have a credit and they have fiduciary duty towards you. But in a very fundamental sense the property of your money has passed to the institution you bank with. They do however have the duty to make it available you, or rather, do as you instruct them to up to the value you banked with them. EDIT: Foley v Hill, the foundational precedent https://en.wikipedia.org/wiki/Foley_v_Hill?wprov=sfti1 https://en.wikipedia.org/wiki/Foley_v_Hill?wprov=sfti1
    - jacquesm 9y ago
      This is correct, and similar legislation exists in many other jurisdictions. It is one reason why you want to be somewhat careful with who you bank with.
- manarth 9y ago
  It's a UK company [1]. The issue isn't that there's no recourse - it's that there's no urgent recourse, so you can spend months without access to the funds you need to pay bills, pay employees, pay your mortgage…Time enough to go bankrupt and lose your home. [1] https://beta.companieshouse.gov.uk/company/08036404 https://beta.companieshouse.gov.uk/company/08036404
- woodylondon 9y ago
  Basically yes - the law changed and the banks are just taking advantage of it. Part of this is that while under investigation they are not allowed to talk to you, and have no motivation to act quickly. I have read in a lot of cases, once they start the process it is very unlikely it will end well. You will, of course, get your money back (assuming you can prove everything they want). They will close your account and the damage is done regardless if you are guilty of something or not. Quicker for them to close an account, then carrying on investigating a backlog of cases. Of course, at some point, they will lose customers from a bad reputation but can take years before this becomes a mainstream problem. I think the odds are small of this happening to you by accident, but it is happening. This problem has not happened to me but did to a friend and I had to loan him money to pay his rent, bills etc. Took 3 months to resolve. Was with Halifax bank. Personally, the main problem I have experienced is around credit cards and reducing limits when you pay off lumps sums. Worse still - I had a credit card closed and they took the money directly from my savings account as part of their T&C ability to garnish money from any other source linked to the bank. There was nothing I could do about it. Lesson learned NEVER have a loan/credit card in the UK with the same bank as the one you have savings or your salary goes into Also, NEVER have your personal accounts and business accounts with the same bank! The other comments on here about having multiple accounts for businesses can be a little tricky as some banks will not open a second business account if you already have done opened with someone else. e.g I had Lloyds business bank, tried Metro bank but they refused to open until I could prove Lloyds was closed.
  - Silhouette 9y ago
    The other comments on here about having multiple accounts for businesses can be a little tricky as some banks will not open a second business account if you already have done opened with someone else. e.g I had Lloyds business bank, tried Metro bank but they refused to open until I could prove Lloyds was closed. I wonder what the reasoning behind that is. Surely if I wanted to move my company's banking facilities from one bank to another, I'd need to make sure the new facilities were open and working, run both in parallel for a few weeks while clients paid outstanding invoices and the like, and then close down the old ones once everything was using the updated details? If Metro won't open a new account until you can prove that you've already closed down the old one, how many businesses ever transfer to Metro?!
- zhte415 9y ago
  Difference of shutting down and preventing access to funds. It is legal, based on small print, to shut down an account on the sending of a letter (proof of sending a letter) and place funds for all accounts (businesses likely to have multiple accounts, globally) in a nostro account for transfer, waiting for payment instruction, just-like-that. Quite ugly, but done. That's a bit different from OP's case, however.
djmobley 9y ago
Exactly. Getting a solicitor involved may be a (very expensive) means of expediting a resolution, but I don't see on what grounds you could follow through with legal action.
- jacquesm 9y ago
  > I don't see on what grounds you could follow through with legal action. That's exactly why you talk to a lawyer. I've been in business a bit longer (30+ years by now) so I can see such grounds but whether or not the lawyer agrees they are good grounds is an important element in determining the strategy. But I highly doubt the bank would let it get to the point where they would have to appear in court.
raverbashing 9y ago
> In the UK this is not that simple Still, the advice of talking to a lawyer (solicitor/barrister) is correct. Yes, things might not be simple that's when you talk to a professional who knows what to do KYC does not preclude you from searching legal help and T&Cs have limitations.
- djmobley 9y ago
  For a small business, getting a solicitor involved is a big expense. I agree it would probably expedite a resolution, but at what cost?
  - raverbashing 9y ago
    What is the cost of your business closing?
  - gambiting 9y ago
    Almost every solicitor/law firm will give you an hour of free consultation where you can explain the situation and they will tell you that it's worth pursuing or not, I'd at least start with that.
  - mcguire 9y ago
    If you have a business and don't have some kind of existing relationship with legal representation, you may be screwed in more ways than having your bank accounts frozen.
gog 9y ago
They can write whatever they want in their T&C but that doesn't mean that it would stand up in court. IANAL and there could be something different in the UK legal system from the rest of the EU.
fredley 9y ago
In no way should extra due diligence on the part of the bank cause this situation to arise. They've audited this guy twice, either they formally accuse him of laundering money and close his account, or they unfreeze his account. This is just terrible inefficiency, and hints at complete chaos behind the scenes. This is the fault of HSBC, not the regulation they've (fairly!) been subjected to.
- hpcjoe 9y ago
  While I agree that HSBC is at fault, to be blunt about it ... determining fault and pointing fingers doesn't pay the bills. Banks can and will screw you over, hard. I may one day write my own experience up as an object lesson and cautionary tale for those who might succumb to the sirens song of bank "services" and "products". The best advice is to consult an attorney right now. Yeah, it will cost you money. The 1 hour spent talking with them, and paying them for that time is well worth the fee, in general. This will give insight into how to approach the problem. Another avenue that the OP should explore is sort of an amplified version of what they did at medium. Like it or not Medium is not quite "wide" distribution. They should choose another outlet to tell their story, one that gets much wider public attention, and enables them to call out HSBC in a very public forum. I don't know if the UK has the same rule as the US in "absolute truth is a defense". If so, go to a widely read/reported media outlet. Tell your story truthfully, in depth. Let them be your megaphone. HSBC will react when confronted with bad press. If your story is rock solid and unimpeachable, they will need to move quickly. Otherwise, they have no incentive to do so. Incentivize them.
  - mjw1007 9y ago
    Going to a national newspaper sounds like a good idea. But don't try the Telegraph for anything HSBC-related. https://www.opendemocracy.net/ourkingdom/peter-oborne/why-i-have-resigned-from-telegraph https://www.opendemocracy.net/ourkingdom/peter-oborne/why-i-...
jacquesm 9y ago
I'm in NL, and my bank disabling access to my account would cause them to be in the 'kantongerecht' tomorrow morning because of the immediate effects such an account closing would have. I'm thinking taxes and salaries having to be paid, indirect damages due to reputation and other immaterial affairs and direct damages because of my inability to pay employees which would surely cause them to leave the company due to breach of contract on my part. I'm 100% sure I could get a hearing in court based on the last one alone.
- woodylondon 9y ago
  We should all move to Amsterdam :) Sounds much better!
  - jacquesm 9y ago
    No need, almost every big EU bank has a representation in London (at least, for the time being).
    - edwinjm 9y ago
      Some banks are already moving to Amsterdam (or have plans), like Royal Bank of Scotland and MUFG, Japan’s biggest bank. https://www.theguardian.com/business/2017/aug/04/rbs-plans-move-to-amsterdam-for-post-brexit-hub https://www.theguardian.com/business/2017/aug/04/rbs-plans-m... https://www.ft.com/content/158dcffe-7535-11e7-90c0-90a9d1bc9691 https://www.ft.com/content/158dcffe-7535-11e7-90c0-90a9d1bc9...
      - karaokeyoga 9y ago
        moving their EU base to Amsterdam, that is …
- roel_v 9y ago
  "Kantongerecht" hasn't existed since 2002. You go straight to the "rechtbank" nowadays.

umanwizard 9y ago

So in the UK it's legal for banks to simply shut down your account and steal your money, and you have no recourse? Seems hard to believe. Apparently, from his profile, the guy you responded to is from the Netherlands.

djmobley 9y ago
There's nothing to suggest the Bank have "stolen" OP's money.
- alistairSH 9y ago
  Would you prefer "holding the OP's money hostage"? Call it what you will, it doesn't make the situation any less ridiculous.
- qubex 9y ago
  Actually, and somewhat counter-intuitively, money you put into a bank account belongs to the bank, as an account-holder you have a credit and they have fiduciary duty towards you. But in a very fundamental sense the property of your money has passed to the institution you bank with. They do however have the duty to make it available you, or rather, do as you instruct them to up to the value you banked with them. EDIT: Foley v Hill, the foundational precedent https://en.wikipedia.org/wiki/Foley_v_Hill?wprov=sfti1 https://en.wikipedia.org/wiki/Foley_v_Hill?wprov=sfti1
  - jacquesm 9y ago
    This is correct, and similar legislation exists in many other jurisdictions. It is one reason why you want to be somewhat careful with who you bank with.
manarth 9y ago
It's a UK company [1]. The issue isn't that there's no recourse - it's that there's no urgent recourse, so you can spend months without access to the funds you need to pay bills, pay employees, pay your mortgage…Time enough to go bankrupt and lose your home. [1] https://beta.companieshouse.gov.uk/company/08036404 https://beta.companieshouse.gov.uk/company/08036404
woodylondon 9y ago
Basically yes - the law changed and the banks are just taking advantage of it. Part of this is that while under investigation they are not allowed to talk to you, and have no motivation to act quickly. I have read in a lot of cases, once they start the process it is very unlikely it will end well. You will, of course, get your money back (assuming you can prove everything they want). They will close your account and the damage is done regardless if you are guilty of something or not. Quicker for them to close an account, then carrying on investigating a backlog of cases. Of course, at some point, they will lose customers from a bad reputation but can take years before this becomes a mainstream problem. I think the odds are small of this happening to you by accident, but it is happening. This problem has not happened to me but did to a friend and I had to loan him money to pay his rent, bills etc. Took 3 months to resolve. Was with Halifax bank. Personally, the main problem I have experienced is around credit cards and reducing limits when you pay off lumps sums. Worse still - I had a credit card closed and they took the money directly from my savings account as part of their T&C ability to garnish money from any other source linked to the bank. There was nothing I could do about it. Lesson learned NEVER have a loan/credit card in the UK with the same bank as the one you have savings or your salary goes into Also, NEVER have your personal accounts and business accounts with the same bank! The other comments on here about having multiple accounts for businesses can be a little tricky as some banks will not open a second business account if you already have done opened with someone else. e.g I had Lloyds business bank, tried Metro bank but they refused to open until I could prove Lloyds was closed.
- Silhouette 9y ago
  The other comments on here about having multiple accounts for businesses can be a little tricky as some banks will not open a second business account if you already have done opened with someone else. e.g I had Lloyds business bank, tried Metro bank but they refused to open until I could prove Lloyds was closed. I wonder what the reasoning behind that is. Surely if I wanted to move my company's banking facilities from one bank to another, I'd need to make sure the new facilities were open and working, run both in parallel for a few weeks while clients paid outstanding invoices and the like, and then close down the old ones once everything was using the updated details? If Metro won't open a new account until you can prove that you've already closed down the old one, how many businesses ever transfer to Metro?!
zhte415 9y ago
Difference of shutting down and preventing access to funds. It is legal, based on small print, to shut down an account on the sending of a letter (proof of sending a letter) and place funds for all accounts (businesses likely to have multiple accounts, globally) in a nostro account for transfer, waiting for payment instruction, just-like-that. Quite ugly, but done. That's a bit different from OP's case, however.

djmobley 9y ago

Exactly. Getting a solicitor involved may be a (very expensive) means of expediting a resolution, but I don't see on what grounds you could follow through with legal action.

jacquesm 9y ago
> I don't see on what grounds you could follow through with legal action. That's exactly why you talk to a lawyer. I've been in business a bit longer (30+ years by now) so I can see such grounds but whether or not the lawyer agrees they are good grounds is an important element in determining the strategy. But I highly doubt the bank would let it get to the point where they would have to appear in court.

raverbashing 9y ago

> In the UK this is not that simple Still, the advice of talking to a lawyer (solicitor/barrister) is correct. Yes, things might not be simple that's when you talk to a professional who knows what to do KYC does not preclude you from searching legal help and T&Cs have limitations.

djmobley 9y ago
For a small business, getting a solicitor involved is a big expense. I agree it would probably expedite a resolution, but at what cost?
- raverbashing 9y ago
  What is the cost of your business closing?
- gambiting 9y ago
  Almost every solicitor/law firm will give you an hour of free consultation where you can explain the situation and they will tell you that it's worth pursuing or not, I'd at least start with that.
- mcguire 9y ago
  If you have a business and don't have some kind of existing relationship with legal representation, you may be screwed in more ways than having your bank accounts frozen.

gog 9y ago

They can write whatever they want in their T&C but that doesn't mean that it would stand up in court. IANAL and there could be something different in the UK legal system from the rest of the EU.

fredley 9y ago

In no way should extra due diligence on the part of the bank cause this situation to arise. They've audited this guy twice, either they formally accuse him of laundering money and close his account, or they unfreeze his account. This is just terrible inefficiency, and hints at complete chaos behind the scenes. This is the fault of HSBC, not the regulation they've (fairly!) been subjected to.

hpcjoe 9y ago
While I agree that HSBC is at fault, to be blunt about it ... determining fault and pointing fingers doesn't pay the bills. Banks can and will screw you over, hard. I may one day write my own experience up as an object lesson and cautionary tale for those who might succumb to the sirens song of bank "services" and "products". The best advice is to consult an attorney right now. Yeah, it will cost you money. The 1 hour spent talking with them, and paying them for that time is well worth the fee, in general. This will give insight into how to approach the problem. Another avenue that the OP should explore is sort of an amplified version of what they did at medium. Like it or not Medium is not quite "wide" distribution. They should choose another outlet to tell their story, one that gets much wider public attention, and enables them to call out HSBC in a very public forum. I don't know if the UK has the same rule as the US in "absolute truth is a defense". If so, go to a widely read/reported media outlet. Tell your story truthfully, in depth. Let them be your megaphone. HSBC will react when confronted with bad press. If your story is rock solid and unimpeachable, they will need to move quickly. Otherwise, they have no incentive to do so. Incentivize them.
- mjw1007 9y ago
  Going to a national newspaper sounds like a good idea. But don't try the Telegraph for anything HSBC-related. https://www.opendemocracy.net/ourkingdom/peter-oborne/why-i-have-resigned-from-telegraph https://www.opendemocracy.net/ourkingdom/peter-oborne/why-i-...

jacquesm 9y ago

I'm in NL, and my bank disabling access to my account would cause them to be in the 'kantongerecht' tomorrow morning because of the immediate effects such an account closing would have. I'm thinking taxes and salaries having to be paid, indirect damages due to reputation and other immaterial affairs and direct damages because of my inability to pay employees which would surely cause them to leave the company due to breach of contract on my part. I'm 100% sure I could get a hearing in court based on the last one alone.

woodylondon 9y ago
We should all move to Amsterdam :) Sounds much better!
- jacquesm 9y ago
  No need, almost every big EU bank has a representation in London (at least, for the time being).
  - edwinjm 9y ago
    Some banks are already moving to Amsterdam (or have plans), like Royal Bank of Scotland and MUFG, Japan’s biggest bank. https://www.theguardian.com/business/2017/aug/04/rbs-plans-move-to-amsterdam-for-post-brexit-hub https://www.theguardian.com/business/2017/aug/04/rbs-plans-m... https://www.ft.com/content/158dcffe-7535-11e7-90c0-90a9d1bc9691 https://www.ft.com/content/158dcffe-7535-11e7-90c0-90a9d1bc9...
    - karaokeyoga 9y ago
      moving their EU base to Amsterdam, that is …
roel_v 9y ago
"Kantongerecht" hasn't existed since 2002. You go straight to the "rechtbank" nowadays.