‘Embarrassed to ask for my money’
Wednesday 16th February 2011, 2:29PM GMT.
A MADEIRAN man who lives and works in the island feels discriminated against after his bank would not let him take out his money without proving what it was for.
Ulises De Freitas, 25 (pictured), moved to the island almost six years ago and has been working for Channel Hotels ever since.
He tried to withdraw £2,000 from his account with the Royal Bank of Scotland International because he was going on holiday to visit his family in Madeira.
However, the bank refused to give him the cash unless he showed them his flight ticket.
A RBS International spokesman said the company was unable to provide any details relating to any specific customer, but it provided a statement about its general policy.
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Just for fun – I wonder what the RBS staff would’ve said if he told them he needed the money “cos the boys waiting outside will break his knuckles if he doesn’t pay his drug debts.”
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This is ridiculous!!! It is his money. Why must you tell a bank what you want to do with your own money before they give it to you?? If I was him I would immediately close my account with them. What rubbish! Make them publish a letter of apology in the press. Looks like a classic example of anti-money laundering rules being abused to me.
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If he was to have his account accessed by thieves then he would be the first to complain.
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I am afraid in this day and age banks see the money you put in as theirs. They used to pay you interest when you had money in your account now they just charge you for the privilege of them using your money. Finally when they have spent all the money or lost it they get you to pay them more through taxes then they give themselves a pat on the back along with a huge bonus.
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Its for money laundering purposes and is standard bank policy, having worked in a bank myself. Its not a discrimination at all, and definitely not racially motivated.
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Firestorm – that is probably because, technically speaking, it becomes their money when you deposit it with them.
You loan the money to them, they promise to give it back subject to the terms of business and they may (or more often not!) pay you some interest. They are governed by AML regulations which require them to know where money comes from and, for large withdrawals, where it is going.
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Should have told them youve just caught up on the news and you thought leaving your cash in a global supercasino was not your idea of a safe investment!Then refused to leave until you had your funds in full!
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The money laundering argument doesn’t hold water. If he walked into the bank with a bag of cash and tried to open an account with it, then yes. But that applies when you deposit money, not withdraw it. The money that the bank has already accepted on deposit (and therefore has presumably already checked is not being laundered) is his to withdraw, whenever he wants, for whatever purpose he wants. That is NONE of the bank’s business.
All they can legitimately do is ensure they have suitable proof of his identity, which would address the comment from Mr G. And for sure, if they didn’t ask him to prove he was who he said he was, then he should be very worried indeed.
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Under the circumstances the bank were probably reasonable to seek proof of identity.
Howebver, as their customer had given the media his name etc it makes their comment “A RBS International spokesman said the company was unable to provide any details relating to any specific customer” arrogant. Why not be up front and confirm they needed proof of identity for a cash withdrawal of £2k?
Breath taking arrogance.
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DonkeyKong: You are right.
Well done to RBS you were doing what is banking
policy. Fancy making a big issue out of this by writting to the press. Racial it is not.
Terry Langlois: Well said.
Paul Le Page: You comments gave me a good laugh.
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TL:
Hmmmm, I bank with HSBC and have had a look through my documentation. I see no reference to my cash being theirs, albeit technically. I see it as being no different to putting my car in to the garage for a service. It is not theirs whilst it is under their roof, it is mine. What makes banking different?
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They have no right to demand proof of what the money is for, particularly for such a small amount.
That money is the bank’s liability to it’s customer, i.e. they’re debt to customers, not the other way round. A flight ticket proves nothing anyway.
They only have the right to ask him to prove who he is to ensure no-one is trying to steal that money. This is not standard AML/CDD stuff, the account already exists and banks do not monitor 2K transactions for suspicious activity, otherwise they’d have to increase staff tenfold.
That is the fact of banking/financial services. I withdrew double that today, without a flight ticket, invoice or anything else, just proof of my ID.
Having said that, another institution has just asked me to prove something claiming “Regulations” as the reason. I know there are no such regulations so will not comply. All institutions make up rules for themselves, apply them inconsistently and tend to argue “Regulations”, meaning/blaming the GFSC Regulations, and it’s complete tosh, having witnessed it so many times in my various roles.
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Yes he has a reason to complain,
On what grounds does the bank have to question?
Under no circumstances is this acceptable
Really Terry?
Are you that naive?
Big Brother is watching
Up in the sky
Never doubt the all seeing eye
Control they will, hold power they do
Hell is here on Earth for you
Over time this is what you will see
Friction over banking policy
Disastrous consequences for Guernsey
I ask you to seek the truth
Come on message me,
Kings rule slaves
Sugar coating and conditioning the naive…
All the banks are one, here to control the masses, money is a man made thing, don’t fall in to the trap, and see what is “really there”
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Truth Man – where does it say that HSBC is holding the money on trust for you? It does not.
When you deposit money with a bank, you accept that they will use it as they wish and will only owe you a liability to pay it back when you request it. You become a creditor of the bank, nothing more.
That is why the Landsbanki depositors have lost out, because LG was not holding the money on trust for them, it was using it elsewhere (and sending it to England). That is how banking works and is why you need to be careful who you bank with, as banks do go bust occasionally and leave their creditors (customers) in the lurch.
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How many of you have seen the truth? it just goes to show….
little wonder…
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I suggest he moves his account to First Direct – old fashioned banking with personable staff – now there’s a novelty!
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I had the same problem with HSBC when I wanted to take out £1000. I had to argue with the staff for over 20 minutes to get my money out, and I had told them what I wanted it for!
It has nothing to do with money laundering, as not every bank applies the same rule. My boyfriend went to his bank on the same day as me to get the same amount and all they said was ‘certainly sir…how would you like that?’
It was for this reason and the general decline in service that after 15 years banking with HSBC I have now closed my account with them and gone to a much better one.
Banks remember, it our money, not yours!!
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Don’t be too upset mr de freitas, this happens to a lot of people and mr x banker has hit the nail on the, head, it’s individual rules made up by people who need to justify their job. whether or not the GFSC is involved is another matter (but whilst on that one ,if the finance industry fails in guernsey it will be due to the self important aura surrounding employees in that office who instigate asinine rules and make business people, who come daily to guernsey, wonder whether it’s worth investing here ,due to the silly little hoops they have to jump through )anyway ,well out of order to request such info for an amount that will soon only add up to the average households quarterly utility bills.i had the same problem with my bank ,with a slightly larger amount needed in cash ,after a stand up shouting match for ten minutes i relented ,and said i need the money to employ the services of several exotic hookers for a week or two ,they said they couldnt put THAT down so the reply was ,well dont then,, i didnt get my money i had to transfer it.(not to the young ladies i might add)
lets face it if you want to launder money here all you have to do is start a company ,or bring your existing huge multinational over, convince the states that you wish to break a monopoly, and set up your plaque on the wall with not a hope of EVER recouping your expenses or out lay cos the customer base is no where near big enough to sustain a profit margin ,but no matter, the money coming in worldwide is legally passed through the proper channels ,
or failing that and better by far , as most banana republics do, is enlist the services of upstanding local officials to add an element of propiety to transactions !!!
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TL:
Ah, that’s my point. They owe you a liability to pay it back when you request it. That does not make it their money (possession is not 9/10ths of the law despite the mis-conception) – it makes it yours to take back on demand. This does make me question what right they have to ask why you need it when you demand it. For example, if the guy had said “Mind your own” could they have withheld it? I doubt it.. or am I wrong?
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I think its absurd. What he wants the money for is none of their business. Not even for anti-money laundeing purposes.
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Truth Man – have a look at the first paragraph of the second boxed quote here: http://www.cobdencentre.org/2009/12/banking-part-1/
You surrender ownership of the money to the bank. It has a contractual liability to you, but the legal ownership of the money transfers to the bank upon deposit.
If you loan a company £100, that company will include the £100 as an asset on its accounts (until it spends it) and also include a corresponding liability to you for £100. The money belongs to the company despite the fact that it has a liability to pay it back to you when you demand it. If the company goes bust you cannot walk in and take your £100 from the safe, you must wait in line with all of the other creditors to see the you get anything from the general pool of assets. This is how banks operate.
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i have never trusted banks at all ,
if ever i had a lot of cash i would keep it myself at home then you dont need to answer there silly questions ,
its your moeny they should remeber that without you being a customer they wouldent have a job at all so think on banks
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I think we should be asking the banks what there doing with our money rather than them asking some guy who wants 2 grand of his money.
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If he was putting 2 grand in cash into his account then the bank would have every right, in fact a legal obligation to ask him where it came from.
This money has come from a known legal source, his account in the Royal Bank of Scotland. So what has money laundering got to do with it.
All he was obliged to do was provide proof of his identity to access his own money. This is just a case of a plain abuse of power by the bank. The message is clear, don’t bank with the Royal Bank of Scotland.
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TL:
Interesting bit of case-law, thank you for the link. Further down the page the conclusion seems to imply that banks have muddled together two pieces of law: The principle of a Monetary irregular deposit and the principle of a Monetary loan. Clearly, the case-law of 1848 has favoured the bank being loaned the money principle. It would be very interesting to see how a court would view this in modern times. Also, my experience of the law (not business law I hasten to add) tells me there are certainly many other relevant pieces to study that further complicate the issue for both sides of the argument.
Some may say the loan principle applies partly because of the theory you mention “If the company goes bust you cannot walk in and take your £100 from the safe, you must wait in line with all of the other creditors to see the you get anything from the general pool of assets. This is how banks operate.” But surely your comment is more to do with the fact that you can’t take something from someone who doesn’t have it. In other words if a company goes bust, the reason you can’t take money from them is because they no longer have the monetary equivalent of that which was handed to them by the depositors.
Anyway, loan or no loan, I still want to know whether the bank could have refused to give the lad the money if he had declined to answer the questions.
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Truth Man – I think that the other issue is that if the money remains yours, they would need to look after it very differently (as trustee / fiduciary). Whilst many depositors in today’s times would welcome banks doing just that, it would cause the banking system to grind to a halt and the deposited funds could not be made available to drive other areas of the economy.
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It amazes me how many people react to such a subject and wish to voice their “knowledgable opinion” …. open your eyes outside the protective bubble …. there is a big world out there were far worse things happen
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Spinhead
What have you just reacted too? :)
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Lots of comment. Issue is the same. No bank has the right to demand such information (as a flight ticket in this case to fulfill their obligation of repaying a debt to their customer for such a trivial amount – in terms of banking regulations, (not necessarily trivial to many people) – and that is not just for withdrawals, it applies to deposits too.
I have, on many occasions, deposited and withdrawn, significantly higher amounts than that in question.
The issue is quite simply stupidity on the part of certain financial institutions in their interpretation and subsequent application of rules and regulations issued by the Guernsey Financial Services Commission.
It is not the rules or regulations themselves, and much of this is due to the newly created bandwagon of compliance and anti-money laundering staff, many of which are extremely experienced and competent, unfortunately there is an even greater number of those jumping on that bandwagon (extemely highly paid 70k is relatively cheap these days), getting qualified with no real practical experience and reading guidance for 0.1% of examples and applying to 90% of cases.
And for those who wish to criticise others for their supposed “knowledgable opinion” why do you not share your wisdom with us. Clearly obvious, you know nothing about this subject or you are one of the daft bunch who have joined one of those “international” organisations offering “diplomas” in this subject and now command a salary of someone with 30 odd years of experience after your 12months of study. Perhaps not daft at all, stupid nonetheless and good luck to you. That final comment is not directed to the extremely professional compliance, AML, CDD people who do exist, I am sure they too get shocked by the application by certain organisations of “regulations”, initiated by new entrants to this industry who don’t have a clue.
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Having just read this thread my initial reaction is why ask for a sight of his flight ticket? He may have needed the monies to buy the ticket!
Big brother still around the corner!
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Had a similar problem with Natwest on the High St. Needed £5k cash, none of their business why. Had passport and they know me in the branch. They refused to give the cash without paperwork for why I wanted the money. My answer “because its mine” was deemed unacceptable.
As it happened I was going on holiday in the US with family and was taking £5k to convert to dollars elsewhere. I explained this, they still refused until I went home, typed up my own “currency invoice” for £5k and gave this to them.
Jokers. Have since moved my banking elsewhere. Luckily not RBS either! For similar transactions since my new bank just ask for passport, chip and pin authentication, and then its “how would you like that Sir?”.
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Well, come on danno. Which bank has your money now?
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I find HSBC, St Sampsons are the worst for this, have taken quite a few amounts of £5K out of my account and each time what do you want it for etc etc. Not only that but this same bank will now not let you take out more than £500 in english as company policy. Luckly had another account at Lloyds who not only did not question why i was taking money out but did not have the same min amount rule in relation to taking out english. actually they had never even heard of this type of company policy…..HSBC loses customer..
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I wonder if the ‘policy’ being enforced by the teller has anything to do with this story from a while ago http://www.guardian.co.uk/business/2010/aug/03/royal-bank-of-scotland-fsa-biggest-fine
Ali M – I’m afraid if you were a customer of my bank I would be asking why you want to withdraw “quite a few amounts of £5k” in cash out of your account. Even if it wasn’t money laundering that activity might suggest a bit of tax evasion may be going on which again, bank employees have a duty to report as suspicious activity. (I’m not accusing you of tax evasion or money laundering btw!)
Not having a go at anyone but I am amazed at the amount of people on here making large cash transactions. Personally, cheques, electronic transfers, debit cards, credit cards etc cover all the large transactions I need to do and also mean I don’t have the security risk of walking around with several k in my back pocket!
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I understand that they should ask for ID but not ask what is was for. But it is good in a way that the bank cares I guess?
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Mark – a lot of personal transactions are still done in cash.
Cheques take time to clear, most individuals don’t have credit card facilities and many people (quite reasonably IMO) don’t want to give their bank account details to total strangers.
If I sold my car for example, if someone wanted to drive the car away that day I would insist on a cash payment – and be happy to take one.
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Mark
Why people want to withdraw their money is none of your business mate unless its for illegal puposes. Do you expect anyone to tell you what its for if its not legal? thats a fools question.
The banking world is amongst the most morally corrupt and they ask us questions???
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This happening more and more its either their employees are daft or they dont like you withdrawing money.
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Personally I think the rules are going to far with the Banks asking for this and that.It is our money after all. If there was another way I’m sure we would all use it and ditch the banks. Usually the person or cashier is about ones daughter or grandaughters age and they have the nerve to ask you what you need the money for? Big brother it is and I totally agree with Mark on that one.
The poor guy has every right to be aggrieved and my answer to that is CLOSE YOU ACCOUNT WITH THE ROYAL BANK OF SCOTLAND AND TELL THEM TO GO TO HELL!
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Paul le Page – true, you can of course ask for a bankers draft or indeed a cheque and tell them to come back when it has cleared. But I accept that doesn’t always work.
bcb – unfortunately the legislation puts a personal responsibility on any individual involved in financial services to report suspicious transactions and to make appropriate enquiries. Whether or not you agree with that is immaterial if you’re not the one faced with possible criminal sanctions if it all goes wrong.
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To add to my previous comment (posted rather hastily)
I don’t necessarily agree with what happened to to Mr De Freitas but the reporting obligations which come as part of these laws has led to some criminals being identified and convicted. Unfortunately with the good comes the bad for people in this situation and some feeling unnecessary intrusion into their life.
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I thank you all for your support and comments
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Mark – that is a fair point. Bank employees have it hammered into their heads that they are personally responsible for reporting suspicious activity – and that they could face prosecution if they don’t.
Although I can’t imagine a cashier being prosecuted for handing over an account holder’s cash after only establishing ID, I can imagine some younger cashiers being so frightened by the fear of prosecution that they go a bit OTT – which may well be what happened here.
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Although it is the responsibility of employees to report suspicious activity, to refuse to hand over cash to the account holder on the basis that the employee has a suspicion could be considered as “tipping off” which is a much more serious offence and I believe can lead to a custodial sentence.
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Mark
The point is, is that if was asked what it was for do you think i am likely to say it is for tax evasion purposes or drugs etc if thats what i wanted it for?. You only need to know that it is not for illegal purposes.
Why not just have a form to sign stateing that it is not for illegal activity then you dont need to ask what its for?.
I may want it for something very personal and dont want some stranger who might tell all and sundry what i wanted it for.
It reminds me of the customs when they stop and ask where you`ve been and why. I always tell them its none of their business.
They have no right to know but only the right to ask.
Paul Le Page
You are right about “suspicious activity” but i think the banks are just as guilty on that score.
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Must have come under the ‘funny sounding foreigner’ course that the employees attend.
Could quite easily have been racially motivated and until the bank explain or apologise we summise that there is an element of that
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Next time I transfer between my accounts online, I will expect a “suspicious activity” prompt?
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bcb,
You’re completely correct, if it was being used for nefarious activities people are hardly likely to say (although there are one or two extremely stupid people in this world!). However, someone coming in and withdrawing large amounts of cash every week to say, “buy a new car”, would raise a few questions and might lead to the reporting of a suspicious transaction. However, this is reliant on someone noticing a pattern and not just accepting everything at face value.
There are flaws in the legislation and it isn’t understood properly by a lot of the people who have to comply with it – hence we get situations such as the one reported in this article.
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Cookie – you may not realise it but your account activity is almost certainly monitored electronically and anything out of the norm would be flagged for review by, most likely, your banks anti-fraud team.
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Mark, It was a tounge in cheek comment to be honest, I appreciate online transactions are monitored in much the same way as face to face transactions. You wouldn’t happen to be a MLRO by chance? Having had experience in retail banking it is also all too often the case that banks simply do not wish to lose deposited monies & will question withdrawls to try & retain funds incase the customer is simply going to another provider! Rules eh!
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With all due respect this is quite simply a stupid decision. If that amount falls under the flagging amount for money laundering it does not make sense at all. If someone wants to withdraw the money to buy drugs do you honestly think he will tell the bank that???? This is a simple case of Foreigner….cash….bookem Danno! You can dress it up all you like but that seems clear to me. And if this is policy to refuse someone his money or to explain what you want it for then my money is going under my bed and the banks can go and stick their service where the sun really does not shine!
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