I couldn't fill up my gas. Called and they told me to come to the bank with two forms of ID. When I arrived to the bank the fraud department was operating in NY (3hrs ahead) and they were closing, so they told me to come next tuesday (it was a long weekend).
I went homeless for 1 week with no food. It was my last semester in university and couldn't pay for tuition because my bank acc was locked, so the university dropped my classes and i was not able to graduate, as failing to stay enrolled (international student) i had to go back to my country.
- 3 days before i received a transfer from my brother (6k usd) to pay for tuiton and new place
- no unusual transactions, never reported any fraud before, just was hit with the "per our agreement we can close your account without notification." and they provided me the balance 1 week later.
I had to go back to my country, without a degree, was not able to land any job. Unfortunately, good places require degrees. Stayed unemployed, hit with chronic depression as anyone would. Lost 4+ years of professional progress. When covid came, i was able to complete my degree online and graduated in 2021, but because all fresh grad programs require a certain age; i did not qualify. Was able to finally land a good job in 2023.
This issue needs a resolution, what happened to me might not happen to everyone, i know my situation is different. but financial institutions should be held responsible for actions like this, imagine someone else who needs to pay for his/her medication...
What is not being said is that many folks are operating at the limits of their executive function. Add something like this to an already stressful period of time to such people, and they simply will not be able to advocate for themselves in an effective manner or make logical decisions in the moment.
I say this from personal experience. Small stuff like this, in particular gatekeeping kafkaesque stuff, absolutely kills my life in a way that is not logical or explainable. It effectively shuts my brain down. I've lost many years of my life due similar issues, where in the end someone else could have handled them as a minor annoyance.
The issue is banking is highly regulated but a lot of the regulation is about AML, terrorism screening and such. Not actually protecting customers from abuse but rather the other way around - banks are taking precautions to protect themselves from customers. Some of the regulation is also the result of decades of lobbying efforts by major players, making it extremely hard for new ones to compete. Banks are rarely held accountable because for some reason most regular people are fine with this or don't understand it.
There is a solution - not sure if everyone's ready to hear it yet: Decentralized finance. Good luck to a bank trying to shut down your self-hosted Ethereum wallet. Banks provide important services and will continue to exist, but giving them full unchecked control over our life savings and finance is mad. There are a lot of other issues with the current system, and many people don't really understand the contracts they're signing, including that they don't legally own "their money" in the bank account in most cases (they're creditors). But the question of effective control over ones own funds is the most crucial one to me.
All this idiocy could have been prevented by a communication stating "come here before one week or we will close your account". They simply do not care about people.
Soon we will have to stop having sympathy for people who get screwed by the banks as the alternative is just too easy and obvious.
It happened to me once in Africa, and I said "never again".
I now have a backup plan for everything that is critical for my life.
I have several modes of transportation, several clients, 2 computers, 2 sources of internet, several ways of contacting my family, etc.
System always fail.
He got stuck for about a week and a half with his money all locked up in an account he couldn't access. It was early enough in the month that rent and bills etc. wasn't an issue, we just ended up helping him out buying food for a few days while he sorted out another account and got an advance on his salary.
I remember the range of excuses and explanations for delays from the bank left us all gobsmacked.
Took us a full week to get a cheque (!!) that we could take to another bank to move all of our money there. Thankfully, I had just sold something online for cash and was able to live off that, and let my landlords and billers know that I was in the process of rebanking.
Since then I've made it one of my lifes goal to sabotage any benefits to the bank (Macquarie) since. I've so far denied them about $700k AUD in revenue by ensuring any time I see their name I shoot down the deal or find an alternative provider. Luckily they operate heavily in the commercial space. I'll continue to do whatever I can to hurt them. Fuck you Macquarie.
Stories like yours highlight how important the freedom to transact is. It’s all fine and dandy until one day suddenly it isn’t and you’re completely fucked.
This sentence is simply BIZARRE.
As an example, I'll use the public university geographically closest to me. (University of Utah)
* It requires no payment until two weeks after classes begin. [1]
* It offers monthly payment plans. [2]
* It allows for late payments, with a late fee capped at $75. [2]
This is not the exception. Much like rent, utilities, etc, there is ample consideration for interruption of tuition payment.
---
What institution is as utterly inflexible as you describe?
[1] https://registrar.utah.edu/academic-calendars/fall2023.php
Aside from the bank's fault, this is a failure of basic society functioning on so many levels.
Dropping you because you couldn't pay for tuition for one week? Having to leave the country because you failed to enroll because of that? Being homeless for a week out of a bureucratic mistake?
True it boils down to people really. Society has just a facade of being functioning, in reality it as bad as the govt, banks that it represents.
I don't see any reason why this hasn't happened except that the Fed has been captured by private banks.
"Oh I never use cash, cashless transactions take 0.00362 seconds less, so taking the risk that I become homeless is worth it to me." - followed by outrage at discovering that trusting your entire financial life to the whims of a compliance department is a real risk.
At some point, you have to assess your risks and realize that your "convenience" comes at a cost. Why people don't use cash, or at the very least have a few stacks in a safe somewhere, always floors me.
I know because it happened to me.
The fact that you became homeless, no food for one week, couldn't graduate because you couldn't pay tuition etc. all point to the same thing. BTW, colleges don't screw you over if you are late paying tuition for just one week. I know that quite well too.
When my bank closed my accounts, I was super annoyed. But I knew why they did it.
Like, can a bank legally put that they can close account without notification in their T&C? Isn't there a regulator that would control these and fine the banks?
The binding arbitration clause (or privatized justice system) is another thing that I can't believe the US population never rebelled against...
The main thing is any company can start denying you service whenever they want as long as it's not for a protected reason, and then it's up to you to prove in the court of law (or arbitration) that they didn't specifically screw you over in any particular way, which is usually not worth the hassle.
This happened to me a decade ago (not in the US), and I was surprised to find that every bank in the country had similar provisions in place. I'd be surprised if yours doesn't too.
I've been unbanked for a while due to paperwork issues in France but thankfully didn't have any life-changing consequences like you.
I would love to present to the world your story. Can you e-mail me at lepenguin.stableunit@gmail.com
Thank you.
It does feel like depository institutions should have to make your funds available the same day via wire/cashiers check/cash if they close your account in this manner.
I didn't dispute any transactions, nor did I deposit any fraudulent checks, no check bounces, no overdrafts, no cash deposits, no wires, not an instance of disrespecting any Chase employee either on phone or in person. Yes, I used Zelle often, I deposited checks often. When people complain about debanking, many folks defend these banks, saying that there are good reasons for these banks to close (some transaction, etc).
Banks are heavily regulated, I understand. Regulators want to see a certain number of SAR and CTR filings based on the size of bank. If a bank has 1M accounts, regulators want to see a certain number of SAR/CTR filings, a certain number of account closures; regulators go hard on financial institutions, if the latter don't follow the industry average (#SARs, #CTRs, #closures). This has created a vicious loop: banks use machine-learning/AI to flag accounts; then, back office employees 95% of the time just close these accounts.
Welcome to the new debanking world. Chase and many others also monitor your political activity, social media, protests, etc. If they don't like you, they can close your account by simply stating that "we have an obligation to know our customers; after careful consideration, we decided to close your account". When banks decide to close your checking accounts, beware that they also close your credit cards (esp Chase is notorious for this).
Perhaps this article demonstrates that the largest banks are unable to know their customers and truly act on that information. And, perhaps having those banks engage in self-destructive mass cancelations serves regulators' purposes just fine.
Unverifiable, untraceable money arriving into your account does not work well with AML regualations.
Did Chase let you withdraw the outstanding balance in full when they closed your account? The last thing I want is to see my money being trapped in limbo state...
The case one should worry about these banks is this: you deposit a $500K check, or you got a wire for $500K; check was cleared on the sender's side. Now Chase/Big Bank holds your funds, saying that this check is fraudulent, and that bank closes your account after finding you risky (risky because of this $500k and by looking back at your account history). Now $500K is in Chase's hands, your account is closed by Chase, and Chase doesn't want to give $500K, nor does Chase want to return $500K to the original bank/sender. This is where you should file a complaint with CFPB right away. Without CFPB complaints, the fraud department at Chase, its Bank employees just give you run around for months. File CFPB complaint right away, if any bank holds your funds after 10 business days; don't listen to these employees at all.
CFPB can't force banks to reopen your accounts. Just to get your funds, file a complaint with CFPB right away, and don't trust any bank employee on getting your funds.
The problem is what you are describing is not exactly legal. You are acting as a money transmitter for your mother; and this might even trigger for you some complex tax obligations.
What you should do is open a Chase bank account for your mother. You already bank with the agency.
This is a big claim. It should have big evidence to back it up.
Chase is will known for this in many political circles
"19 Republican states accuse JPMorgan of closing bank accounts and discriminating against customers due to their religious or political beliefs" [1][3]. Of course, this site is not favorable to conservatives and their views. Some left activists' accounts are closed as well [2].
[1] https://www.businessinsider.com/republican-states-accuse-jpm...
[2] https://nitter.cz/OccupyWallStNYC/status/1674022837084991489
[3] https://www2.cbn.com/news/us/chase-bank-cancels-nonprofits-b...
At least, that is the charitable interpretation.
I didn't experience that when I was on board of directors.
In my personal affairs I had a checking account force closed because of their auditors - not the regulators. Rumors and myths about enforcement have internal people and contractor (compliance software) going too far. No recourse individually on this behavior.
What's really behind the decision is simply risk avoidance. It's like "firing" bad customers. The banks consider it prudent business to kick anyone who might be a problem out the door. Avoiding one criminal causing issues is worth kicking out 20 ordinary honest customers.
(Interac is the Canadian debit card system, owned by a network of banks, which has also branched out into person-to-person money transfers between bank accounts because we don't have Venmo/Zelle/etc here).
Banks do what the government tells them to do.
They are more than happy to launder drug money, they don't care. You think they close the account of some random person who made too many cash deposits to protect themselves from the customer?
No, they protect themselves from the government who will hit them with massive fines when they "fund terrorism".
Oh lord, this just asks for gamification.
If there's a multi-million dollar customer and a five thousand dollar customer, who do you reckon they'd rather lose in order to reach their quotas?
Since when is this grounds for closing an account?
Many phone systems have a thinly veiled threat about zero tolerance policies, to treat staff with respect, and in the case of certain government agencies here in the UK, that they will refer cases to the police. The same is repeated on written posters in eg doctors and dentist offices
Just a coincidence I’m sure but I find employees (especially on the phone) even more condescending and unhelpful these days
Open multiple bank accounts at different banks, use services like wise.com for transfers, and limit your overseas spending with American cards to only a credit card issued with a bank that isn’t the same as your primary accounts.
Yay, patriot act. Glad we have so much energy focusing on legit bankers instead of the crypto that is actually funding multiple US adversaries at this very moment
Funny you criticize crypto, when it actually solves all the bullshit you're mentioning.
It's so nice knowing for a fact that when I send or receive crypto, it will 100% arrive within moments, unlike the absolute shitfest that is international transfers (like SWIFT).
Crypto today is the only way how you can take control of your own funds.
What use is the money in your Bank account if the ruling political party can label you an ultra-right extremist and retroactively lock all your money down, just because of a single 1$ donation you did to a cause you believed to be right, like Canada did?
Make sure to hold my bag for me.
Maybe if you're talking about Monero or another currency with the key security property of untraceability. Otherwise it's only a matter of time until cryptocurrency exchanges require documentation about the sources of money, which will likely resemble a parallel blockchain that carries wallet metadata.
He's not wrong
Turns out my ATM card worked fine while I was over there. I did let the bank know I would be there and I kept my address in the US though. My card got locked at one point which was a disaster since it was strictly a cash economy. I put the card into an ATM that was apparently being serviced or something. I had to get on Skype (remember Skype?) to call my bank to straighten it out. Once they gave me the go ahead I tried the next day only to be denied again. Turned out Visa wanted to talk to me as well. Thankfully they did not cancel the card, I have no idea how I would have gotten a replacement.
Since I told the bank ahead of time that I was going to be going many places the ATM card worked all over the place: Yemen, Dubai, Qatar, Turkey, Greece, Malta… Everywhere except China lol. Had to use my credit card there.
I am just average white US citizen who was working on oil rigs but most likely some of my whatsapp/facebook/iMessage contacts were related to families involved in dissidence against the Saudi government (because the oil region of Saudi is populated by a minority Shia group that is severely underrepresented in governance). Their mosques also had individuals with mental health issues who occasionally try to bomb the mosques in a very, very similar parallel to school shooters back home here in USA.
0: https://en.m.wikipedia.org/wiki/Secondary_Security_Screening...
Of course, that doesn't help if you don't just look weird but actually are weird. Spending a lot of time overseas is not weird in itself, because it's common enough. Some specific international situations are weird. Because such situations are rare, it's not cost-effective for the bureaucracy to develop processes for dealing with them fairly.
Banks are about to lose more trust, and money. I'll be doing some research into my credit union as well. Can't trust these institutions, man.
The onus should not be on us to fit their model, but on them to fit their model to reality.
The only time a compliance officer has been in touch with me was when I was moving money to crypto exchanges.
Keep your US address on there and VPN (though frankly I’ve never needed to for anything other than Charles Schwab) and you often glide through unnoticed.
What all the people profiled in the article have in common is that they were depositing money in "suspicious" ways.
Protip: chill.
Also, if you get flagged in one of these services, they usually send your info to similar companies and they either close your account or don't let you create new accounts.
That being said, if you know when are are leaveing,.where you are going, and when you will be home, you can often put a vacation note on your account, and then the bank will know you are on vacation. That is what I did when I spent this summer in Japan, using.my bank debit card because it has no foreign transaction fees, the whole time.
If you want better service, there are two ways. One is to be an ultra high net worth individual. But the threshold for that is pretty high - from what I recall, real private banking nowadays starts around $5M to 10M in assets with a single institution. The term "millionaire" doesn't mean as much as it did in the 1990s.
The other option is to go with a small local bank or a credit union. If you're in a CU with 10,000 members, it's a lot easier to resolve problems or discuss unique circumstances.
I’ve had zero problems. I think we’re all getting excited about anecdotes.
There should be more enforcement on dubious banking transactions, numerous Australian banks have had some big fines because they were literally facilitating money laundering on cartel-scale amounts of money for years. Makes me cringe when they crack down on a Joe Nobody who's obviously not, at even a quick glance, some kind of mule / druglord.
By crypto I'm assuming you mean USD.
Not only USD, but actual US weapons in the hands of US adversaries.
Sigh.
I have never in my life seen someone identity a problem and then blame the solution this quickly.
Wise is like Paypal 2.0. If you sneeze the wrong way, they'll freeze your account.
Last I heard, wise.com is outright stealing people's money now.
Otherwise, this is a good heads-up. Banking for expats can be tricky; a lot of US financial institutions don't want to service customers who live overseas, and will automatically cancel your account if they find out you don't live in the US.
The US is looking more and more like the old Soviet Union, where people weren't allowed to leave. Even China doesn't have this problem; there are tons of Chinese expats living in democratic nations, and they don't have problems like this.
Let's not forget Crypto mining has a not insignificant energy footprint, and is a driver of climate change. Really, detrimental to society from the get-go.
It's federally required to exist, and services all Americans already. Basic banking services should be one of the things it is expanded to provide in a minimal, safe fashion (i.e. no loans or lending, but guaranteed electronic banking and funds transfer services).
That alone exceeds the requirement of “minimal” as there’s now a need to hire staff for fraud monitoring, handle disputed transactions, chase fraudulent transfers, deal with those who forgot their passwords to electronic banking, had their passwords stolen, etc.
What are the new revenue channels that will pay for all that extra staff (and considering it’s USPS, their pensions)?
Are you talking about a specific law, or about the clause in your constitution?
If the latter: the postal clause merely gives congress some powers, but does not require them to do anything.
For the record, I am far from a "crypto bro." I understand all of their limitations, including high volatility. I am arguing that their value is quickly growing in relation to their risks.
Except, unless cryptocurrencies are tied to some brain implant so you cant lose the keys. There will be a need for a custodian for the average joe's key...and banks 2.0 here we come.
The documents they need to open a bank account (plastic residence permit, address registration certificate) are not available to them, sometimes for up to a year.
The ways around it are poorly documented and change often as German banks tighten their KYC requirements.
<hours elapse> guy emails me asking if I sent the wire because it's not in his account. I say sure did, but let me check if the funds have departed my account. This is when I discover that WF locked all my online account access. And of course they did not send the wire.
This whole mess took nearly the entire day to resolve and required me to go into a WF branch to prove I was myself. And when I did that the helpful WF manager I worked with ended up exasperated at the WF department that had locked my account. She said they ended up suspecting that she was a bad actor, even though she was calling on an internal line!
This all makes me suspect that in addition to bad ML filtering, banks also have plain moron/assholes working in their fraud departments.
(Yes I got the car eventually and my bank accounts back)
I once had my card declined buying groceries, which ultimately took several hours to unlock. The cause? The $1.25 transaction for the fancy air compressor at the gas station to fill my tires. No biggie, had to re-shop when my card was eventually unlocked a few hours later by their slack-ass fraud department.
The second story, I once had my card declined purchasing groceries and found my account was -$750 dollars or so. An old gym I had cancelled my membership was acquired by another firm, and this new firm apparently thought I was still a member and owed several years worth of $54 a month fees. Now, instead of doing (3 * 12 * 54) in a single transaction, or $54 transactions 36 times they just started hitting my account for $100 in serial, then for some reason switching to $50 in serial, and then $25 in serial until I was comically in the hole. The bank manager was able to freeze and deny further charges from the firm, initiate a fraud complaint, and ultimately had my money back in a week. Thankfully I had some cash in my safe for the duration.
What boggles me is they were unable to interpret a company for which I had never made a prior transaction jackpotting my account as a fraud, but Thank God they stopped my $1.25 tire pressure refill.
Totally wrong direction.
> "Money laundering" (however that is defined) should not be a crime. Theft, fraud, etc. should be.
This goes back to this weird fetishism where people think it was oh-so-cool to arrest and convict Al Capone for "not paying taxes" instead of convicting him for his actual crimes.
A society which thinks its cool to send people to jail for tax evasion instead of sending them to jail for organized crime is a failed society.
Anyway, wasn't the tax evasion also an actual crime? It's not like you get a pass on the tax evasion because you're also strongly suspected of committing much worse crimes, is it?
I'm not event sure that we, as a society, actually did decide that. When, how? Was there a vote, a referendum? I cannot speak for everyone, but to me it feels like we as a society sure as fuck didn't decide anything. Yes, somebody decided that, but we as a society never were a part of the conversation, really.
Nothing crazy about it. All those KYCs, checks and check on checks have nothing to do with money laundering or any other sort of illegal activity but it has to do with control over YOUR money.
Notice how extremely regulated the industry is? So multi-billion dollar scam ventures just can't exist under this pressure, right? Multi billion dollar dodgy deals with money laundering? They should have disappeared if my $500 txn gets so much attention, right?
Wrong - it's blossoming. One may ask how - and the answer is on the surface and it has nothing to do with money laundering.
It’s not criminalized. If it were, you’d go to jail instead of just having your account closed.
The real problem is that politicians made banks liable if an account is used for laundering, so naturally banks terminate accounts that look suspicious in order to avoid getting fined.
In the counterfactual world where money laundering is explicitly legal, crime becomes far harder to prove, the government is far less useful at stopping crime, and people spend more of their time inventing parallel structures to stop crime that are far less accountable than the government is, until we've sleep-walked into anarchocapitalism.
None of this excuses 'debanking' of course. In the case of debanking, you aren't being accused of the crime of money laundering, the bank just thinks you might be, so they summarily execute your account in the same way that Google executes[1] spammers. The thing you need to be angry about is the weaponization of freedom to associate, and you need to be calling for common carrier regulation rather than legalizing financial crime.
[0] Theoretically, at least - the CIA and NSA have fought tooth and nail to get full take, which is disgusting
[1] Metaphorical, at least until 2035 when Google starts livestreaming executions of known spammers
Any such attempt smells like trolling to me.
System that are shitty by accident, do not compare to intentional evil.
Whatever happens to you is fine and dandy as long as it doesn't happen to them... and it probably won't happen to them.
Most people grant these powers to the government hoping to get their pet peeve taken care of, and are surprised when the government not only doesn't do what they promised, but turn those powers onto its own favorite victims instead.
Innocent until proven guilty, not guilt until proven innocent.
Being de-platformed from financial infrastructure is tantamount to being economically jailed and instantly forced into life altering poverty. This isn’t some silly app you’re getting banned from…
Banks shouldn’t be allowed to ban anyone. They should need a court order to lock up/ban someone from access/mobility of their own property.
That said, this is likely a narrow lens statement. The problem is more complex around governments/judicial systems incentivizing banks to behave like governments. In reality, our regulatory agencies need to do their jobs: regulate/enforce and be held accountable when they don’t (instead of passing that enforcement on to banks through threat of liability).
That presumes (and requires) a very specific risk model by the banks.
It is wonderful to hear politicians and the UN speak of our wonderful human rights, but clearly that does not extend to our ability to trade our skills, good and services in a legal manner, in our common currencies.
Now how is that for our much vaunted human rights?
Is anyone going to propose a constitutional amendment that makes banking a human right not subject to the whims and caprices of anonymous secretive unaccountable govt and banking officials?
Of course we could trade in cash, at the risk of having some "law enforcement" officials seizing our cash and asking us to prove we acquired it legally, subject to time wasting and expensive legal process which usually costs more than the amount seized. Habeas corpus doesn't apply to the cash which is why the court cases read State of New York vs $28,777 rather than State of New York vs John Doe.
In the EU some countries have placed limits on the size of payments which can be made in cash.
As for the US one has to wonder why the $10000 deposit notification limit which was made in 1970 has not been adjusted to account for inflation, which according to Google it is about $79,000 in 2023.
Those officials must have been ecstatic at the introduction of computers which makes tracking such transactions so easy.
Anyone to campaign for the adjustment of the $10000 figure to account for inflation? We want to party!!
Think of how it would improve the liquidity of banks. So much money would come flowing in in full knowledge that it wouldn'tbe subject to needless checks from nosy make busy bank and IRS officials.
However wrong the EU is on many things, at least the EU states that having a "basic bank account" is a right in the EU that cannot be denied: "If you are legally resident in an EU country you are entitled to open a "basic payment account". Banks cannot refuse your application for a basic payment account just because you don't live in the country where the bank is established.". [1]
And the European Convention on Human Rights has some implication on banks in the EU, for example when they lend money (say for a mortgage) to an EU citizen.
I'd say that that's better than a country where you can be totally de-banked and blocklisted.
I don't have any false hope but it's at least better than nothing.
[1] https://europa.eu/youreurope/citizens/consumers/financial-pr...
Capital One used to have a cafe near Boston Commons, although they accepted all card networks. I think it would be pretty neat if they opened coffee shops sponsored by CC companies that only accept their CC customers (e.g. coffee shops that only accept Visa or only accept Amex).
Eg Some people are rude, but that shouldn't be illegal.
My belief is their is some data science team responsible for this. They are ruining people's lives with their false positives. I hope those people read this message and realise what they are doing.
I was lucky. I would've got a marker put against me that could've had every other bank close my account. I only escaped this because of my persistence in calling them and getting lucky with a customer service rep who went the extra mile.
Beyond the specifics of closed bank accounts, what are we are seeing is the following pattern:
- Government pushes regulation on banks to monitor their customers for X, Y, Z
- Banks, on behalf of the government, collect data on individuals for X, Y, Z.
- When banks are not satisfied, they either de-bank their customers or file a report with the government.
Banks, which are supposed to work for their customers, instead end up being coerced to watch their customers on behalf of the government.
Because more and more transactions are digital, the net result if that the government has found a new venue for (totalitarian?) surveillance of almost all economic transactions of their subjects. Back in the day, the KGB would have dreamed of having something like this.
Of course, one needs to live to see how bad it will get, and if people will get more accustomed to holding cash[^1] in a hidden safe.
[^1]: Or a cash equivalent. In certain places, there is talk to make do without any cash at all.
For regulatory reasons, only the government should be able to mandate closure and for that it should be backed by a judicial order.
I don't fucking care about idiots mumbling about "muh, terrorism! money laundering", fuck you and your safetyism. We live in a democracy, and nobody should be punished except after a judicial procedure with ample defense rights.
Banks regulatory requirements should stop at making sure they collect all the required information and report suspicious activity to the government. They are not in the business of policing people, investigating, judging and punishing people. They don't have this mandate.
(a) Banks can be vague in their SAR filings with “transaction with no apparent economic, business or lawful purpose”
(b) What BSA manul says: "No bank, and no director, officer, employee, or agent of a bank that reports a suspicious transaction may notify any person involved in the transaction that the transaction has been reported." [1]
This deadly combination is enough for banks to NOT disclose. That's why a vague reason is provided by banks; here is Chase's template: "Financial institutions have an obligation to know our customers and monitor transactions that flow through our customers' accounts. After careful consideration, we decided to close your account because of unexpected activity on these or another Chase account."
[1] https://bsaaml.ffiec.gov/manual/AssessingComplianceWithBSARe...
Widespread disenfranchisement risks a quiet, at first, socioeconomic apartheid, instability, and more homeless people.
The root cause is the oligopolic concentration of power by too few corporations and regulatory capture leading to little-to-no oversight to civically murder or banish a person arbitrarily.
A number of potential remedies include:
1. Decentralization (credit unions, breaking up corporations that are too big)
2. Regulation (antitrust, consumer protection, and algorithm standards)
3. Public utilities for essential services (postal banking which already occurs partially in the US with money orders)
Closely-related book Three Felonies A Day: How the Feds Target the Innocent by Silverglate.
one additional scenario that always stuck with me as to how wacky banks can stretch their power: i had a woman who had her own sole-owned accounts, a joint account with her mother, and her mother had her own accounts. the mother had overdrafted her sole account a few hundred dollars, and per the bank agreement, they took money from the joint account & the daughters sole-owned account to offset the balance. she was completely blindsided & distraught once it all became clear as anyone would be. how is that fair? this was in 2015. hopefully things have changed.
Here's what companies should be doing: using AI to easy the work of their workers.
What's the difference? Well, in this case, closing an account is a serious action. It should always require human review. Mistakes do happen. Bugs happen. So, automated systems should simply allow one person to review many more accounts and/or to require less time to review such actions.
Companies should always be responsible for the consequences of these automated actions including all damages plus punitive damages. Want to know how this can go (and has gone) horribly wrong?
Hertz had an automated system that was falsely reporting rental cars as stolen [1]. People were charged and spent time in jail for this (eg [2]).
This should never happen. Any police report like this should require human review where the human is responsible for the consequences of that. Automated system or not, Hertz made false police reports. That's a crime. Or it should be if it isn't.
We are rapidly heading towards a dystopian future where ordinary life is impossible and nobody knows why because none of these systems explain why you're being imprisoned and your money has been seized.
[1]: https://www.npr.org/2022/12/06/1140998674/hertz-false-accusa...
[2]: https://www.cbsnews.com/news/former-marine-arrested-charged-...
People were happy when it was only "fascists" getting debanked but now it's happening to normal people they don't like it.
Wait until it starts happening to everyone that attended a pro-Palestinian rally.
>“We must know our customers and monitor the transactions that flow through our bank,” he said. “That includes instances where we see a pattern of cash deposits that are just below federal currency reporting thresholds.”
Later in the article:
>“We must know our customers and monitor the transactions that flow through our bank,” Mr. Dubrowski said, who stressed that the bank was not accusing Mr. Ladipo of any wrongdoing. “That includes instances where we suspect that the transactions involve parties connected to potential scams.”
Is Mr Dubrowski an AI by any chance?
Unless you're implying Monero I don't think so.
> is uncensorable like cash
Uncensorable until you get sanctioned like Tornado Cash? Or this is also about Monero?
> but could also be digitally transmitted like electronic payments?
At the same speed, convenience, security and efficiency level?
I find this one of the most telling bits of this entire article. It says the quiet part out loud - people are often not looking purely to understand. People want information so they can negotiate, reason, or argue with the decisions.
A bank account nowadays is not some kind of privilege which can only be granted citizens which hold the correct political beliefs and have never upset whatever stupid algoritm they have in place to check for "money laundering". A bank account nowadays is simply a modern prerequisite.
Let me be clear, if the bank "freezes" someones account, I think they are in moral right to use violence against bank officials in self defense. The bank has attacked the individual in a meaningful way, akin to digital sabotage, but way worse.
> The algorithmically generated alerts are reviewed every day by human employees.
At 1.8M reports either banks employ an army of reviewers or there is fuck all of a review.
> or wire transfers with banks in high-risk countries.
Sounds like something ripe for discrimination against immigrants.
Try to explain to your employees how their salaries are delayed because your bank suspects you’re terrorists or something.
This and some other experiences turned me to someone who believes that the freedom to transact is an inalienable right, and that it should be taken out of the hands of governments and centralised institutions as much as possible.
I had a small business bank account, and one day I got a call from the bank asking to go through my transaction list and provide explanations for all the transactions. Fortunately they didn't close the account, but given the fact that it was costing them to investigate my account, it did make me wonder if they would have closed it if it wasn't profitable enough.
(b), (c), (d) force banks to wage war against cash. So, if you have a small business that accepts cash, your bank doesn't want your business as a customer, as they don't want to accept cash deposits, nor do they want customers who withdraw cash regularly. That's why large retailers have their own shadow banks to get around the push towards anti-cash.
* no industry likes regulation (except as a weapon against competition)
* banks previously made billions helping criminals
* now the government says "stop helping criminals", so they invented a system that will inconvenience voters until the government gets off their case
They probably know equaly bad the customers whis accounts they do not close.
Both banks and the banking regulation is a joke. They could certainly do some more manual verification of suspected cases to clear out the obvious mistakes, but they only care about the bottom line and to not be fined.
https://www.washingtonpost.com/news/wonk/wp/2015/06/08/bitco...
https://prestonbyrne.com/2017/12/08/bitcoin_ponzi/
https://ic.unicamp.br/~stolfi/bitcoin/2020-12-31-bitcoin-pon...
https://ic.unicamp.br/~stolfi/bitcoin/2021-01-16-yes-ponzi.h...
Banks obviously! Crime and corruption departments are costly. If you are an actual millionaire they will make a 40 pages report on your political views before kicking you but if you are a small customer paying rent that happens to have a funny name or withdraw cash too frequently its better to just kick you out of the platform... and have you talk to the algorithm.
Think of it. If government wants to efficiently catch financial crimes they can instead setup a digital-nomad-crypto-friendly-bank-with-minimal-kyc-plus-eresidency-and-offshore-companies and just follow the money. I suspect this will be a lot more efficient than the current framework.
Banks are locking the capacity of an individual or group of people to interact with society and their access to basic living needs while making a mockery of the concept of innocent til prove guilty we built our societies on. The burden to prove you are not a criminal is on you.
And while vast majority of people are vocal against xenophobia and racism when its the banks ruining someone life because they have the wrong passport color some people will applaud and justify the systems protecting their sweet homeland from dirty barbarians from the east and south.
But even if you think AML laws are a force for good you need to agree this whole situation is very fucked up. I'm normally very against regulation but bank accounts in current digital society should be granted as a basic right.
Despite the article and the comments, this isn't an American thing. There are stories on line that are near identical to these from all over the world.
Justice is never applied evenly.
Yet, Chase did not do anything against Bernie Madoff for decades [1]
https://www.reuters.com/article/us-jpmorgan-madoff-deal-idUS...
central banks suck. rich get the benefit of doubt. everyone else gets rugged capitalism treatment.
This is the biggest reason I make it a priority to bank locally and in person.
Recent events show even in our liberal democracies, governments can't be trusted with the power they already have, and the enormous power that technology does and will afford them.
(The most salient example is the Trudeau government freezing the bank accounts of trucker donators.)
i read through most of the article and could not find discussion of such an obvious question
do you get to re-open your account after they realize they're wrong? does this actually affect credit scores? big if true. i realize this is probably just a bug due to security theater with unwillingness to fix the bug being part of the security theater.
we already knew the bank polices every single transaction we make (which is absolutely intolerable and should be illegal, along with most of the credit system which is also just surveillance), but closing accounts in any meaningful way would be new.
and this is another dipshit article that doesn't actually even name the problem. instead they point to unprovable discrimination as usual. NO. the problem is that what someone does with their money is a private matter, like none of your fucking business. there wouldn't be any discrimination if the bank just was a real product and not a one sided """relationship""" which is just code for "we shove our noses into every transaction you make for your own good, loser".
what i imagine is that in actuality what actually happens is you have to do a bunch of annoying phone calls and "security" crap like going on a website and doing captchas, receiving 6 digit codes through SMS, whatever new security theater fad is current like spinning around in front of a camera, etc then you get your account re enabled.
Estimated yearly cost of KYC/AML worldwide: $180 bn. Money actually frozen (frozen doesn't even mean it's going to eventually seized): $12 bn. 15x less. Complete, total and utter failure.
Basically these KYC/AML rules are profoundly unjust and overwhelmingly only affect honest people who did exactly nothing wrong.
The situation is so bad that there even the EU is now trying to rectify things a bit.
Here's a recent article I read (in French):
https://paperjam.lu/article/liste-contacts-ouvrir-compte-b
The article says this:
"ABBL a échangé avec la Commission de surveillance du secteur financier (CSSF) pour que la réglementation AML/KYC s’applique de manière proportionnée, en conformité avec les textes. L’obligation de diligence variera dans son intensité selon les risques effectifs que peut représenter une structure."
Basically: discussions are ongoing to make sure banks use proportionated KYC/AML rules and all the while staying within the letter of the law.
For the situation has gotten so out of hand that it's an issue for startups and individuals trying to open bank accounts and it's beginning to have a noticeable effect on the economy.
Basically 180 billions, worldwide, burnt yearly in nothing productive: only pointless administrative work. It's not helping poor people. It's not helping the economy. It's helping nobody. It's leeches leaching all the while making everybody suspicious and scared that their accounts are going to be closed.
An example: the association of parents at my kid's school wanted a bank account. We're talking about a non-profit with a yearly budget of few thousand dollars. Due to crazy KYC/AML they couldn't.
That is not "proportionate". And some of the demands were likely not in accordance with the law.
For example I've had sites, to verify my identity, which asked me to film myself while speaking (AirBnB "conciergerie" / high-end thinggy IIRC. Not sure but that "videos of yourself talking" happened to me on several sites).
I'm not sure that the EU directives regarding KYC/AML allow the collect of information including videos of people talking.
When speaking about things needing to stay proportionate, I've had a notary ask me to trace the source of funds up until 2014. Seriously WTF: there should be a limit as to how many years they can go back in time.
I bought an apartment in 2001 and I now want to sell but I'm concerned because I don't have any trace of the money anymore: it's from nearly a quarter of a century ago. I'm concerned that, before the sale, the notary (who's forced to snitch btw) is going to ask me the source of the funds used to buy that apartment in 2001 (nothing shady: I was writing computer books but I don't have any trace of any royalties payment. I don't even remember through which bank I bought it).
Another example: I did cancel a private insurance. All that was needed was a proof I moved to another country. Or so I thought. They gave me the full KYC/AML... For cancelling an insurance! Why? I take it because I moved and went living to another EU country: if you move from one country to another, you automatically become someone suspicious.
Now where it becomes really vicious: these KYC/AML always go back further and further in time but banks do not allow you to go back more than 8 or 10 years (when you want to check older statements). They then bill you hundreds of EUR, per account, per year, to give you your older bank statements. Which is adding insult to injury: the very same clique that is making your life miserable with KYC/AML is making money for the very bank statements they're asking (well, technically it's bank B asking your statements of bank A... But for another person it's going to be bank A asking that person's statements at bank B).
It's so bad I now have a Git-versioned folder only for KYC/AML with proofs of everything. Any wire transfer of more than 10 K EUR I now save and archive for posterity.
Another big issue is that none of this KYC/AML nonsense is centralized: so you basically have to do the same fucking paperwork for your insurance, banks, brokers, notary, etc.
Fuck KYC/AML. Just fuck it. This horrible, pointless waste of time and energy is bane of my existence and needs to die.
These laws/rules reflect the sick mind of those who wrote them and those who voted them (and they're badly failing at actually freezing and seizing drug/terrorist/trafficker' money).
No bullshit fees. I can get to a real person quickly. No stupid algorithm running in the background ready to banish me the moment something unusual happens.
There are legitimate reasons to use a bigger bank, but I'd wager that for 90% or more of people, a credit union would be a net improvement.
Ah well, nevertheless.
It's increasingly clear that automating important decisions like this is causing a lot of harm while removing most forms of recourse available to those affected. Coupled with the way automated decisions are used to perform and then launder fraud on a massive scale, maybe we should target laws at the automation itself: Require decisions made by automated systems of any kind to be auditable and explicitly define what human is held responsible and what remedies can be applied
Standardized testing and remote learning monitoring, automated sentencing software, and any number of social programs are examples, if you were wondering.
So, part of the problem is the signalling that the tolerating of these practices when they happen to those less able to defend themselves presents to companies. "Go ahead, do it, you'll get away with it." I tend to think: because the people with the power to stop it benefit from it.
As with any classification system though, 100% accuracy isn't going to happen. But there's always some customer service rep that can look at the details of the account, and see why in the world the system said what it did. But a detailed explanation of why we thought something was fraudulent could (and sometimes would!) just lead to another fun reddit post where someone describes how to hide the fraud a little better.
For any given system like this, how much harm is actually being done, vs how much is being prevented (as fraud just leads to raising prices to cover for it: financial companies are not charities)? I've read way too many CSR conversations where a blatant fraudster with world-class chutzpah would claim that we were destroying their family for no reason, when the data was damning. But this doesn't mean that everyone who isn't a fraudster really reaches out to the CSRs, and has the energy to prove there was no fraud. The actual levels of damage are just hard to measure.
We should have sensible, mandatory, available customer service access, which costs just enough to access to not be hammered by bots, but that is completely refunded in case of error. But what is really causing this is that many companies have lowered the barrier of interaction so much that we are letting a lot of fraud through the door. Remember how getting a merchant account in a real bank is a multi-day affair? How getting hired to become a delivery driver needed an interview, with a real person, and a manager checking between deliveries? The price of not having to interact with a human to sign in is fraud detection that isn't a boss you interact with every day, makes sure you are working, and is paid from the work you do. Companies with billions of customers and probably hundreds of millions of suppliers aren't exactly workable without automating a lot of those intermediate jobs away.
Maybe we made the wrong call across the board, and lower-productivity, but far higher trust commerce is the way to go... but a lot of that commerce is losing in the market, right now. So if we like it, we have to be willing to pay extra for it.
how about we stop at the actual source by not having the government launder the task of law enforcement to third parties? The article makes it pretty clear that banks aren't exiting customers for fun. They're doing it because they have to, on pain of facing regulatory action.
It isn't an automated decision-making problem. Every instance involves humans in the loop making the final decision. And that article makes clear -- via spokesperson statements -- that it is auditable and the banks know exactly why accounts were terminated.
This is already done for financial statements.
If you put out software that is actively causing harm, you should know your fingerprints are on it
Employees like devs would be protected by professional insurance. That would cause bad management to shape up, or otherwise lose inaurance coverage.
> human oversight policies provide a false sense of security in
> adopting algorithms and enable vendors and agencies to shirk
> accountability for algorithmic harms.
> propose a shift from human oversight to institutional oversight as
> the central mechanism for regulating government algorithms.
> First, agencies must justify that it is appropriate to incorporate
> an algorithm into decision-making and that any proposed forms of
> human oversight are supported by empirical evidence. Second, these
> justifications must receive democratic review and approval before
> the agency can adopt the algorithm.
Now, I do not know how bad fintech scene is, but I do know that they generally suck when it comes to actual BSA compliance. Then again, I do not really consider fintech banks. Neither does treasury for that matter[1].
Still, this is not THE problem even if you raised a valid and relevant concern here. The issue is and always has been BSA legislation that put this requirement on banks without specifics. More than that, the core issue is that the stupid population that was so scared post-9/11 that it let this thing pass through with minimal whimper.
Clearly, it got bad enough that it got some important people and Treasury had to issue a guidance[2]. No one cared for 2 decades.
I am sorry for the tone. I am glad this is getting a wider audience, but I do have a bee in my bonnet that it took this long.
[1]https://home.treasury.gov/news/press-releases/jy1105 [2]https://home.treasury.gov/news/press-releases/jy1438
Because it is a legislative problem of not ensuring sufficient rights, such as the inalienable right to have access to an electronic money account with which you can receive, send, and keep money.
Jokes aside, we are entering a world of AI-decision hell. If it is any similar to the algo-decision hell from the past decade, humans are fucked.
It's already highly anti-democratic, but imagine what an aggressive, oppressive government will do with this power.
https://www.theatlantic.com/politics/archive/2015/05/the-gla...
https://www.nytimes.com/2022/12/22/nyregion/madison-square-g...
It’s particularly bad in some cities. Rather than enforcing access to the special hell that is US retail banking, just prohibit businesses from ripping out their existing cash infrastructure.
Even with a bank account, your ability to transact is subject to surveillance and seizure/freezing without evidence or probable cause. Cash has none of these problems.