HSBC in Britain is apologizing today after some branches were requiring customers to provide a valid reason for large cash withdrawals. The BBC reported that listeners of the radio program “Money Box” on Radio 4 said since November of last year, they were being questioned about the need for the money they were withdrawing from their own accounts, and in some cases, had to provide proof.
Steven Cotton, a listener of the show, said, that he tried to withdraw over $11,000 to pay his mother back for a personal loan. “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,” said Cotton. “They wanted a letter from the person involved.” Cotton then had to haggle with the bank for an amount they would allow him to withdraw from his own account. Additionally, was told that he could not return the same day to withdraw any more money.
HSBC released a statement earlier today that read in part:
“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,” the bank said in a statement. “We apologize to any customer who has been given incorrect information and inconvenienced.”
This is not the first time HSBC’s banking practices have made international headlines. Two years ago, HSBC agreed to a record $1.9 billion fine to make allegations by authorities in the United States go away that the bank’s anti-money laundering controls were sloppy and that they had allowed millions of dollars of dubious transactions by customers in Mexico and other nations, including drug proceeds.
Money laundering for the drug cartels. Nice.
As part of the settlement, HSBC pleaded guilty to violating several laws in the United States, including the Bank Secrecy Act, but avoided criminal prosecution. No one went to jail for laundering drug money for Mexican drug cartels.