Just why is my bank putting its spoke in?

James Erlichman is in a rage after being told by Lloyds TSB to prove his identity or have both his accounts frozen

Saturday March 20, 2004
The Guardian

I admit it. I am a convicted criminal. Indeed I have been twice convicted for the same crime. Maybe, that's why Lloyds TSB bank thinks I may be an international terrorist involved in money laundering and has now threatened to freeze both my deposit and current account.

The bank has just sent me a letter warning that I must report to the nearest branch by March 22 2004 armed with my passport or similar identification. Otherwise, my fate is dire: "If you have not responded by then, we may have no choice but to stop you drawing money from your ac count." Excuse me, can a bank threaten to freeze anybody's bank account, just like that?

Let me confess to my criminal convictions. Twice, in 25 years, the police have caught me driving through red lights in London - on a bicycle, yes a push bike. Guilty, your honour. First offence trying to get home to cook dinner. Second, trying to arrive at the BBC to broadcast on time for a morning programme. Not exactly evidence of international terrorism. Otherwise, my criminal record is blank.

So why did Lloyds TSB make this demand? Allegedly, it has to with "an industry-wide initiative supported by the government and our regulators the Financial Services Authority" to defeat international terrorism and international money laundering.

Two prime questions arise. Who else has been fingered besides me, and why?

To start at the beginning, Lloyds TSB had actually sent me a similar demand a few weeks prior - warning that I must comply, but making no threat to freeze my account if I didn't. However, I was still annoyed enough to ring the bank to inquire and to complain. You will know the story: After numerous number-choices punched into the phone and 15 minutes later, I was put through to a human being - in the UK, I think. Nice woman. She listened to my story, reassured me that this was not a government requirement, just an "initiative" and suggested that I just drop the demand in the bin, which I did.

You can imagine my fury when I got the reminder letter threatening to freeze my account by March 22. So I marched down to my local branch in North London, waited in a queue for 30 minutes, before finally engaging with a member of staff.

She was less than pleasant. She invoked "government regulations on terrorism" and I volleyed with "I will not be bullied by my bank". The queue behind me erupted into applause and cheers of support on my behalf, which resulted in my being escorted into the manager's office. Don't blame him, he was from another branch, but yes, he did know about the demands for customer identification.

I put to him what I thought was a salient fact: Some money in my account had come from America in US dollars. The reason was my Dad had died and had left me some money, all of which was above board.

His financial life was modest and his will was cleared and signed off by the US Internal Revenue after 9-11 so money laundering was not an issue. "I am both a British and US citizen," I told the manager, "but did the dollar origins of the money instigate this inquiry?" No, he replied, the demand was random upon any British citizen with a bank account.

So, I asked: "Do you expect an old lady with arthritis to hobble to her bank, stand in a queue for 30 minutes to confirm her identify at random - clutching her passport if she has one - just to insure her life savings are not frozen and kept from her?" He was silent and it would have been too unkind to press him to answer.

So I left it there to pursue these crucial issues with the bosses at Lloyds TSB and with the Financial Standards Authority. These are the responses: The FSA said: "We do have tough rules against money laundering which all UK banks must adhere to. However, we encourage them to take a common sense approach. We certainly do not require them to reconfirm the identify of every customer."

Over to Lloyds TSB. But their answer was unclear - a classic obfuscation. "This is an industry-wide initiative to fight crime and terrorism. It involves the government, law enforcement agencies and financial services organisations. It is not our intention to cause people concern. We would like to reassure anybody that has been asked to supply ID that it is a formality and does not mean that we suspect them of criminal activity."

All this still did not reveal the legal requirements of bank customers to give their banks proof of identity. No laws are cited, just "initiatives", whatever they are. Nor can I tell you how many other British citizens are being harassed in a similar and "random" way.

For my money, the FSA should have been clearer in its instructions to the banks in the ways they should co-operate against money laundering. Lloyds TSB, in its turn, should now learn how to treat customers with courtesy - if it wishes to keep them.

An astonishing article from The Guardian

Our bank has recently brought in a rule saying that you need to show ID to withdraw money from your account. They say that there has been an increased level of fraud, and that showing ID will help reduce it. If the amount is over £1000 you have to show two forms of ID. Obviously thinking that two forms of ID are "more powerful" than one is completely absurd. If you show ID like a passport, it should be good enough for one pound or 1000. Its clear that they do not understand how ID works. Having said this, this is a private entitity that is trying to stop a very specific problem. They are asking us to do this to protect our money, and so it is a reasonable request. They should however, ask you to bring in your switch card and swipe it in front of the teller and then put in your pin; if its good enough for a cash machine it should be good enough for a live human transaction. But this is not what I want to talk about.

The above story from The Guardian is an example of a completely unreasonable request, that should ideally trigger the following response: The author should have gone to another bank, described what happened to him, and opened a new account. He should have immediately transfered all of his money to this new account, and then he should have written a letter to his old bank saying precisely why he moved his money. They would then be free to freeze his account. In Hell.

Part of "The British Disease" is the reaction that he displayed in his branch of Lloyds TSB, as was the reaction of the people in the queue - sheep like applause. Complaining to the authorities is almost a british passtime, like complaining about the weather. Both are pointless; and if this man thinks that by writing an article in The Guardian he is going to change the policy of Lloyds he is insane. The banks are in the business of Money. Removing your money from your bank is like denying Dracula access to blood. Anyone who gets one of these letters should instantly move their money out of their Lloyds TSB account; I guarantee you that after the 100th account closure these letters would not only be stopped, but Lloyds would send out letters countermanding the order and apologising to stop the hemmoraging.

By keeping his account open and merely complaining to a powerless functionary the author is sending the wrong signal; he is saying, "I will make noise, but you are the boss and you will get what you want, no matter how unreasonable", which is totally incorrect. The author is the client, who is paying for a service. Anyone can open a bank account anywhere in the world; you can order a form online that will be sent to you. No one needs to put up with this hysterical nonsense, randomly sweeping accounts is a violation, the threat to freeze an account is commercial suicide - or it shold be, "The British Disease" being the only thing stopping reality from slapping Lloyds TSB in the face.

If you think that this sort of thing is an isolated incedent that will go away you are wrong. This is just the begininng. Many serivces are going to start to ask you to identify yourself, for no good reason, just as they do in France when you want to buy a SIM card. The only way that this will be stopped is if the consumers refuse to hand over their money AND their ID. The rule should be "dont ask for ID and you can have my money, or ask for my ID and you dont get my money". This is the ultimate sanction that everyone has, and perhaps, when people start to feel the power that non compliance confers to the consumer, they will make make the leap and understand that they dont have to put up with any service they dont like, no matter who provides it, when they refuse to pay.

GADDAFI'S GEMS

23

The Maximum Leader!

Oregon county bans all marriages

Ker-ching!

A threat to liberty or a threat to terrorists?

Government will track ID card use

Just why is my bank putting its spoke in?

Counter-terrorism Security blankets

You Whores