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Why banks are suddenly closing down customer accounts

nytimes.com

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Re: Why banks are suddenly closing down customer accounts

#211

Post by ClumsyPilot »

raincom wrote: post #130
creer wrote: post #107

Earlier quoted context omitted.

No such thing as "an algorithm run amuck" - more like "another department run amuck". Someone programmed the thing, someone is running it deliberately.

Regulators fined Chase and other big banks for "weak controls". One way to show that these big banks have "strong controls" is to change parameters for these algorithms. Many legitimate transactions fall under structuring, layering, smurfing, laundering. After all, any goal of money laundering is to make their transactions appear "legitimate". Now almost all transactions (except for big businesses and people with few…

> One way to show that these big banks have "strong controls" is to change parameters for these algorithms

imagine if some bank knowingly facilitated money laubdering, and needed to show they gave strong controls. What eould you do?

Thats right, you would close 10k minor accounts of random schmucks for 'suspicious activity', report 'job done' to the regulator, and continue your corrupt practices

Re: Why banks are suddenly closing down customer accounts

#212

Post by krupan »

dclowd9901 wrote: post #202
krupan wrote: post #70

The crazy thing to me in all this is that the types and amounts of transactions you make with your money and the bank is not criminal and never could be. It could however be a technique used to hide things that are criminal like fraud or theft. Somehow somewhere along the way we as a society decided we were ok with criminalizing the types of transactions that can be used to hide crime. That to me should have been a c…

Is there a legitimate, non-criminal reason to launder money?

Again, how exactly do you define money laundering? Currently the definition by law seems to be, "anything that could be used to hide criminal activity." In that case, yes, there are plenty of legitimate, non-criminal reasons to make transactions that "could be used" to hide criminal activity. Is privacy a crime?

Re: Why banks are suddenly closing down customer accounts

#213

Post by kylehotchkiss »

reaperman wrote: post #191
musictubes wrote: post #180

Earlier quoted context omitted.

I moved from the US to Yemen from 2006-2008. After I got the travel details figured out I realized I would need some way of getting money while I was there. Freaked out for a bit, figured that with the war on terror ongoing it would prove to be incredibly difficult. 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 lo…

I got put on a watch list during my time in Saudi and Abu Dhabi. Didnt affect my banking but every plane ticket i got for years had “SSSS”[0] printed/sharpied on it and all my luggage would get a secondary hand-search at every stop immediately pre-boarding both domestically and internationally. I am just average white US citizen who was working on oil rigs but most likely some of my whatsapp/facebook/iMessage contact…

SSSS isn’t related to having financial things. Booking a one way ticket transiting a middle eastern country to the US is often enough.

Re: Why banks are suddenly closing down customer accounts

#214

Post by raincom »

SpaceNoodled wrote: post #118
raincom wrote: post #41

Banks hide behind Bank Secrecy Act and other regulations in order to debank people. Chase closed my account, and the reason Chase gave: "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." I didn't dispute any t…

Will Chase cancel my mortgage, too?

No, they don't; however they cancel your checking, savings, business checking, credit cards. Only exception is mortgages.

Re: Why banks are suddenly closing down customer accounts

#215

Post by gruez »

ClumsyPilot wrote: post #203
ensignavenger wrote: post #161

Earlier quoted context omitted.

Banks don't really have much choice in the matter. They have been deputized to enforce federal laws, and given penalties if they don't. To add a cherry on top, the laws are vague and require the bank to investigate, judge, and execute account closures. 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 ban…

they are vague they catch every tom, dick and garry but so strict that every cartel still has acees to the banking system

The point isn't necessarily to cut money laundering down to zero, it's to add significant cost and effort so it makes the cartels job harder. Every international border isn't airtight either and causes a bunch of hassle for travelers, but we don't throw up our hands and give up the idea of border control.

Re: Why banks are suddenly closing down customer accounts

#216

Post by 015a »

patmcc wrote: post #172
015a wrote: post #126

Earlier quoted context omitted.

> telling a bank they need to keep dealing with customers that cost them tons of money and are actively trying to defraud them (and other customers) seems awfully harsh. So, the legal system? The only reason regulated banks should be able to deplatform someone is if they also have a legally actionable case, and they do legally action it, and the person is found guilty.

Ok; can we do the same to your industry? Would you enjoy being required to serve incredibly unprofitable customers until you can (very expensively!) take them to court? If being banked is so critical (and it is, in modern society) then it shouldn't be handled solely by private enterprise. Government needs to step in and offer basic services.

Banking is, in the United States, by only the dictionary definition a private industry, and their importance and potential negative impact to the daily life of the average citizen puts them in the same category as utility providers and healthcare.

Strawman all you want, but there's a big difference between social media and finance.

Re: Why banks are suddenly closing down customer accounts

#217

Post by jimbob45 »

XorNot wrote: post #99
Ajay-p wrote: post #58

Debanking is deeply unfair but more so in our society that is moving increasingly towards a cash-less society. A person can be debanked for no fault of their own and that causes them to be unable to pay rent, bills, etc. Like being arrested - there is little recourse without great expense or effort.

There's a very obvious utility in the US which should be able to prevent this: The US Postal Service. 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).

I don’t see the connection between the Postal Service and banking. Is it just it was historically there? If that’s the case, you could attach it to any department.

Re: Why banks are suddenly closing down customer accounts

#218

Post by ClumsyPilot »

lxm wrote: post #144
XorNot wrote: post #99

Earlier quoted context omitted.

There's a very obvious utility in the US which should be able to prevent this: The US Postal Service. 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).

> 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 US…

> That alone exceeds the requirement of “minimal"

Does a car with 4 wheels exceed requirements of minimal? Who operates a payment service without handling fraud? Can you operste a postal service without handling fraud?

> pay for all that extra staff?

Do roads create revenue?

Like you are fee to argue that its not worth it, but government services do not need to charge fees, rhey can create economic growth and get the money back through taxes

Re: Why banks are suddenly closing down customer accounts

#219

Post by jmyeet »

Here's what companies are trying to do: replace people with "AI". Why? Because people are annoying. They demand wages, breaks, medical care and so on. Of course what happens to companies when there's no one left being paid to afford their services never enters the picture.

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-...

Re: Why banks are suddenly closing down customer accounts

#220

Post by TacticalCoder »

vfclists wrote: post #49

The real issue here is a human rights issue. 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 wh…

> The real issue here is a human rights issue.

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...

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