Banks Change Policies (??) Effecting Millions In Britain. Is This Going To Spread To The States? Probably.

Major UK Banks Face Backlash After Withdrawal Limits and Delays

Pete Rizzo (@pete_rizzo_) | Published on January 27, 2014 at 16:30 GMT | Events, News

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Restrictions on withdrawals, ATM hardware errors, widespread fraud – while these may sound like the kind of problems associated with a burgeoning economic platform, they are in fact issues dominating the headlines of traditional global finance.

In the past week, UK customers have encountered complications withdrawing cash from major banks (including Bank of Scotland, Halifax, HSBC, Lloyds and TSB) due to contentious policy changes and service interruptions.

On 24th January, it was revealed that HSBC had failed to inform customers of a policy change implemented in November that would require consumers to submit “evidence” to complete cash withdrawals of £5,000 to £10,000.

The revelation caused widespread public outrage among privacy and alternative currency advocates who view the development as symptomatic of the increased control banks and financial institutions are exerting over the traditional monetary supply.

Similarly, Bank of Scotland, Halifax, Lloyds and TSB customers were affected by the unscheduled shutdown of cash machines and debit cards on 27th January, which representatives claimed was caused by a server failure.

Up to 3,500 ATMs were not working for three hours, reports said.

Cash withdrawal restrictions

HSBC’s actions were not just concerning to consumers. In the aftermath, major banks also moved to distance their brands from such restrictions, clarifying their policies on large cash withdrawals.

None indicated that they would require evidence to authorize this action, though all stated that they still reserve the right to ask questions about large withdrawals as a consumer protection precaution.

Yet, while the consumer protection angle was a favoured explanation by banks, certain consumers saw it very differently. Stephen Cotton, the HSBC customer whose story incited the maelstorm, got to the heart of the issue in press statements made after he was denied both £5,000 and £4,000 withdrawals. Cotton said:

“You shouldn’t have to explain to your bank why you want that money. It’s not theirs, it’s yours.”

Cotton has been banking with HSBC for 28 years, and had previously received indications from phone support that he could make such a withdrawal. Following the backlash, the bank quickly moved to change its guidance to employees, instructing them to make clear that providing such information is not mandatory.

Speaking on the policy, HSBC said:

“Cash presents more risk, and in particular financial crime risk, than other payment methods. It also leaves customers with very little protection if things go wrong.”

“Therefore, we need to monitor particularly closely movements of cash in and out of the banking system. This is why 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.”

ATM issues continue

The problems encountered by the Bank of Scotland, Halifax, HSBC, Lloyds and TSB ATMs may have been less notable, if only because a string of IT problems have plagued UK banks in recent years. Though, in the case of these banks, actions to resolve the issues were greeted more positively.

Paul Pester, CEO of TSB, took to Twitter to personally apologise for the outage, and to deal with real-time customer concerns.

Pester updated customers as to when the problem was fixed, responded to a consumer suggestion by updating its automated telephone messages and apologized to frustrated customers who reported point-of-sale disturbances and call centre issues.

A call to action

In the ensuing unrest, the virtual currency community has used the issue at hand to illuminate those who are dissatisfied with the current state of the banking industry, yet uninformed about available alternatives.

Separate reddit threads have since emerged, with some garnering more than 200 comments spanning a wide range of topics.

Evan Rose, president and CEO of BitcoinATM, spoke to CoinDesk about how his industry can learn from such issues. Rose noted that although the bitcoin ATM industry isn’t immune from the issues experienced by these banks, it does benefit from “a clean design slate”. He said:

“Whereas much of the infrastructure surrounding traditional ATM networks is grounded in technology 20+ years old, we took the opportunity to build our service from the ground up with absolute redundancy and availability in mind.”

“Much of the bitcoin ecosystem is being built in a similar manner, which has the potential to give bitcoin companies a leg up over the traditional services customers are accustomed to.”

The Collapse Of The Banking System Is Getting Much Closer. British Banks Restricting Withdrawals. Chinese Bank Holiday.

URL and to post comments: http://dollarvigilante.com/blog/2014/1/27/capital-controls-deployed-worldwide-by-major-banks-is-it-too.html Monday,January 27, 2014 [Editor's Note: The following post is by TDV Editor-in-Chief, Jeff Berwick] First Chase limited cash withdrawals and money transfers on certain business accounts, then HSBC told its customers they had to prove why they were withdrawing cash. After that Lloyd's ATM's stopped working and China banned cash transfers and foreign currency conversions starting this week.  We've covered the global trend towards capital controls in western nations, and we are unsurprised to announce the trend is only getting worse for savers. As we've predicted in the past (and been right), this will only get worse. Now the Central Bank of China has ordered its commercial banks to suspend cash transfers for three days and foreign currency conversions for nine days starting January 30. This during the Lunar New Year Holiday, a time usually busy for banks in China.  The ban affects every commercial bank in China, and will cease domestic renminbi transfers from January 30 to February 2, and conversions of renminbi to foreign currency to February 7. Forbes published the following "Important Notice," sent by Citigroup to its customers in China: Important Notice: 1. Due to the system maintenance of People’s Bank of China, Domestic RMB Fund Transfer through Citibank (China) Online and Citi will be delayed during January 30th 2014, 16:00pm to February 2nd 2014, 18:30pm. As to the fund availability at the receiving bank, it depends on the processing requirements and turnaround time of the receiving bank. We apologize for any inconvenience caused. 2. During Spring Festival, Foreign Currency Transfer Transaction through Citibank (China) Online and Citi Mobile will be temporally not available from January 30, 2014 18:00pm to February 7, 2014 09:00am. We apologize for any inconvenience caused. If you have any enquiries, please reach us via our 24-hour banking hotline at 800-830-1880 or credit card hotline at 400-821-1880. If you are calling from other parts of the world, please reach us at 86-20-38801267 for banking services or 86-21-38969500 for credit card services. The maintenance is taking place during a peak period for Chinese banks, during the week-long Lunar New Year holiday, beginning Jan. 31. What's likely is that China's policy is aimed at lessening the impact of a shockwave to be set-off by a default in China's multi-trillion dollar "shadow banking system." HSBC HALTS PALTRY TRANSFERS, NOT LARGE ONES HSBC has also recently implemented de facto capital controls on its customers. One HSBC customer, Stephen Cotton, was reduced to writing different amounts out on pieces of paper, until the bank agreed to an amount. "So I wrote out a few slips," Cotton told BBC. "I said, 'Can I have £5,000?' They said no. I said, 'Can I have £4,000?' They said no. And then I wrote one out for £3,000 and they said, 'OK, we'll give you that.'" According to HSBC customers, they have been stopped from withdrawing "large" amounts of cash "because they could not provide evidence of why they wanted it." In reality, the amounts are paltry. HSBC admits there has been a change in policy: customers must give reasons for withdrawing paltry sums. The bank says it did not need to tell any customers simply because the new practice did not entail a change in their policy. Mr. Cotton needed £7,000 from his instant access savings account in order to pay back a loan from his mother. Just one year ago he had no trouble withdrawing the same amount. But, he could only get the £3,000 out of his account. When he asked if he could back later in the day, the bank told him he could not do the same thing twice in one day. Mr. Cotton has been banking in that branch of HSBC 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." And that's where he's wrong. The bank doesn't consider it his money. Another individual, Peter from Wiltshire, had a similar problem. Wanting to take out £10 000 cash from HSBC to pay to his sons and some to fund his long-haul travel plans, Peter rang the day before to give HSBC notice. Everything seemed fine until the next day Peter got a phone call from his local branch. They said they needed him to send the money via a bank payment and to provide booking receipits for his holidays. Another customer, Belinda Bell, was required to provide a builder's quote before she could obtain her funds to pay him. HSBC said the policy change was to better serve their customers. "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." Douglas Carswell, the Conservative MP for Clacton, said of 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." Lloyds TSB, another major bank in the UK, recently suffered a "glitch" which kept customres from accessing their accounts. “What is going on is known as a ‘glitch’ for now, and perhaps as ‘preemptive planning’ depending on who you ask,” Zero Hedge reported on the issue. “Sure, in a few months it may be called a bail-in (see Cyprus), but we will cross that bridge when we get to it.” Time-and-time again we are covering capital controls being instituted. We shouldn't really take any credit for predicting these unfoldings. We were in good company, as the International Monetary Fund only recently published how it anticipated your savings would be stolen. It doesn't matter if there was some government decree or not. All that matters is the facts on the ground. And the facts on the ground, from my perspective, are that people all over the world are having difficulties accessing their money. Hence, capital controls by stealth. They're here, and they're very real. Where was your money when it was too late? To learn more about creeping capital controls worldwide, and how to defend yourself, click here.

Anarcho-Capitalist.  Libertarian.  Freedom fighter against mankind’s two biggest enemies, the State and the Central Banks.  Jeff Berwick is the founder of The Dollar Vigilante, CEO of TDV Media & Services and host of the popular video podcast,Anarchast.  Jeff is a prominent speaker at many of the world’s freedom, investment and gold conferences as well as regularly in the media including CNBC, CNN and Fox Business