I believe that this is an issue, especially in light of recent changes by credit card companies and the ongoing shenanigans with UPS and FedEx.
I went to my local Savings Bank on Monday to initiate a wire transfer of just under $1,500. Before asking me which account I wanted to take the money out of, the officious bank employee demanded to know who the recipient was, what my connection with him was, and whether I had met him in person. She also insisted on knowing what the money was for. I replied that I had spoken with him several times on the phone and that I was confident that it was not a fraudulent scheme. That was unacceptable to her. I told her that I was purchasing something, but she insisted “we need to know more about WHAT you are purchasing before we can do a wire transfer.” When I expressed my disbelief that the bank was refusing to transfer MY money pursuant to MY instructions, she said “I’m just doing my job.” To say that I was furious would be an understatement.
I met with the Branch Manager this morning. While she was much more professional about the situation, she insisted that the Bank needed to “know more” in order to “prevent fraud”. When I asked for a written statement of the bank’s policy regarding information required to initiate a wire transfer, she handed me a copy of a US Secret Service Cybercrimes Investigations (unit?) publication entitled “Don’t Be A Mule”. I assured her that I was not a criminal. In other words, they do not have a written policy statement for customers.
So I asked “What if I came into the bank with a check made out to cash for $1,500 - would the Bank demand to know what I was going to do with my money?” The answer was “It depends on the amount of the cash withdrawal.” When I asked what the threshold dollar amount was to challenge a cash withdrawal, she refused to tell me.
I have a personal checking account, 4 business accounts, and 2 safe deposit boxes at this branch. I opened my first account with them almost 10 years ago and my parents started using this bank in the late 1970s. My total funds on deposit are substantial enough that $1,500 is not an unusual or unprecedented transaction amount, not by a long shot.
I explained to the Branch Manager that in my career as an investment banker and financial consultant I had initiated over 100 wire transfers totaling 100s of millions of dollars. When I told her that I used to be a Series 24 General Securities Representative (SEC license), she said “oh that makes me much more comfortable.”
Here’s an interesting observation. I could have lied and said that the recipient was an old college friend who I first met in 1979. I could have lied and said that I was purchasing a used outboard motor. I could have been lying about my career in investment banking. Yet the bank almost certainly would have accepted those lies and transferred MY money as I instructed. Criminals might also be liars…
Instead, I told them the truth. I was unwilling to tell them that I was purchasing a collectible firearm for reasons that should be obvious to anyone. I was unwilling to explain that the intended recipient and I were both members of a firearms collectors group for the same reasons.
Moral of the story: the younger generation of bank employees think it is perfectly acceptable to refuse to follow a depositor’s instructions unless they get a “sufficient explanation” of the transaction AND of your relationship with the recipient. The bank employee is the sole arbiter of what constitutes a “sufficient explanation.”
Canadian banks shutting down private citizens’ accounts at the direction of the national government was NOT an aberration. It is how our world works today.
P.S. if you are a member of a younger generation remember the #1 rule of banking - any business really. KNOW YOUR CUSTOMER.
/rant off/
