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HSBC imposes restrictions on large cash withdrawals
By Bob Howard
British Broadcasting Corp., London
Friday, January 24, 2014
Some HSBC customers have been prevented from withdrawing large amounts of cash because they could not provide evidence of why they wanted it, the BBC has learnt.
Listeners have told Radio 4's "Money Box" they were stopped from withdrawing amounts ranging from L5,000 to L10,000.
HSBC admitted it has not informed customers of the change in policy, which was implemented in November.
The bank says it has now changed its guidance to staff.
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Stephen Cotton, from Worcestershire, went to his local HSBC branch this month to withdraw L7,000 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A year before, he had withdrawn a larger sum in cash from HSBC without a problem.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 L5,000?' They said no. I said, 'Can I have L4,000?' They said no. And then I wrote one out for L3,000 and they said, 'OK, we'll give you that.'"
He asked if he could return later that day to withdraw another L3,000, but he was told he could not do the same thing twice in one day.
He wrote to complain to HSBC about the new rules and that he had not been informed of any change.
The bank said it did not have to tell him. "As this was not a change to the Terms and Conditions of your bank account, we had no need to pre-notify customers of the change," HSBC wrote.
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."
Peter, from Wiltshire, had a similar experience.
He wanted to take out L10 000 cash from HSBC, some to pay to his sons and some to fund his long-haul travel plans.
Peter phoned up the day before to give HSBC notice and everything seemed to be fine.
The next day he got a call from his local branch asking him to pay his sons via a bank payment and to provide booking receipts for his holidays. Peter did not have any booking receipts to show.
The following day he spoke to HSBC again and this time, having examined his account, it said he could withdraw the L10,000.
Belinda is another customer who was initially denied her cash, in her case to pay her builder. She told "Money Box" she had to provide the builder's quote.
HSBC has said that following customer feedback, it was changing its policy: "We ask our customers about the purpose of large cash withdrawals when they are unusual and out of keeping with the normal running of their account. 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 reason being we have an obligation to protect our customers, and to minimise the opportunity for financial crime. However, following feedback, we are immediately updating guidance to our customer-facing staff to reiterate that it is not mandatory for customers to provide documentary evidence for large cash withdrawals, and on its own, failure to show evidence is not a reason to refuse a withdrawal. We are writing to apologise to any customer who has been given incorrect information and inconvenienced."
"Money Box" asked other banks what their policy is on large cash withdrawals.
They all said they reserved the right to ask questions about large cash withdrawals. But none said they would require evidence of what the money was being used for before paying out.
Douglas Carswell, the Conservative MP for Clacton, is alarmed by the new HSBC policy: "All these regulations which have been imposed on banks allow enormous interpretation. It basically infantilises the customer. In a sense your money becomes pocket money and the bank becomes your parent."
But Eric Leenders, head of retail at the British Bankers Association, said banks were sensible to ask questions of their customers: "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."
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