2 ms·

You know how there are always stories where people are complaining that some financial company (often PayPal) shut their account down and won’t say why? That’s

You know how there are always stories where people are complaining that some financial company (often PayPal) shut their account down and won’t say why? That’s because of AML laws. Their account got flagged by OFAC—deservedly or not—and the company is bound from discussing anything about it under any circumstances. The level it goes to is frankly kind of ridiculous, but that’s the legal regime financial services companies operate under. And that’s not to defend PayPal as a company either. Just that when you see people saying some company is horrible because they close accounts and give no information, it's (not always, but) very frequently one situation that’s entirely out of the company’s hands.

jjeaff 4y ago
It should be noted that an account being flagged by OFAC is one of the many reasons a company might flag an account. And it is probably at the bottom of the list of most common reasons an account gets frozen. So let's not give these companies too much credit since most of the time they are freezing accounts for much more benign reasons. Like: we didn't do any due diligence on your business beforehand and now a little bit of data indicates you might fall outside of our basic risk bars and we don't want to do any due diligence on you now (so we can save a couple bucks) to confirm whether that is true or not, so we are going to freeze you out and collect interest on your money for the 3-6 month maximum after which you can take your money back and go kick rocks without ever knowing why because we want to limit our legal liability.
nr2x 4y ago
This is why you should just bank with HSBC! ;-)
miracle2k 4y ago
Where does it say customers are not allowed to be notified? For example: > 41. Should an institution tell its customer that it blocked their funds, and, if so, how does the institution explain it to them? > An institution may notify its customer that it has blocked funds in accordance with OFAC's instructions. The customer has the right to apply for the unblocking and release of the funds. https://home.treasury.gov/policy-issues/financial-sanctions/faqs/topic/1601 https://home.treasury.gov/policy-issues/financial-sanctions/...

jjeaff 4y ago

It should be noted that an account being flagged by OFAC is one of the many reasons a company might flag an account. And it is probably at the bottom of the list of most common reasons an account gets frozen. So let's not give these companies too much credit since most of the time they are freezing accounts for much more benign reasons. Like: we didn't do any due diligence on your business beforehand and now a little bit of data indicates you might fall outside of our basic risk bars and we don't want to do any due diligence on you now (so we can save a couple bucks) to confirm whether that is true or not, so we are going to freeze you out and collect interest on your money for the 3-6 month maximum after which you can take your money back and go kick rocks without ever knowing why because we want to limit our legal liability.

nr2x 4y ago

This is why you should just bank with HSBC! ;-)

miracle2k 4y ago

Where does it say customers are not allowed to be notified? For example: > 41. Should an institution tell its customer that it blocked their funds, and, if so, how does the institution explain it to them? > An institution may notify its customer that it has blocked funds in accordance with OFAC's instructions. The customer has the right to apply for the unblocking and release of the funds. https://home.treasury.gov/policy-issues/financial-sanctions/faqs/topic/1601 https://home.treasury.gov/policy-issues/financial-sanctions/...