To think banks shouldn't do this

[Northernsoulgirl45]

We have had a joint account with our bank for almost 20 years. We have always paid a good salary in and have never been overdrawn.
So two weeks ago we paid a cheque into our account for circa 15K.which was settlement for an insurance claim. This was subsequently debited as an unpaid cheque. Cue lots of stress trying to find out the reason why.
So we finally received a letter telling us that the transaction was subjuct to a security check and we must provide id and proof of the transaction.
Apparently they would than decide whether our account should remain open.
They also stopped the account so a new direct debit we set up was rejected causing embarrassment.
Of course we complained but we were told that they were within their rights to do this. I assume this is to do with money laundering regulation but it still seems heavy handed
AIBU to think this ?

They can ask questions as a normal course of investigation - however it is tricky to do so without tipping off and as soon as they crystalise a suspicion that it is frauduleng funds it goes to the MLRO for onward reporting to the NCA.

However-your situation sounds terribly crack-handed. A simple call to you to say 'just received a large cheque, need to verify the details please could you advise who issued the cheque and why blah blah. Thanks sir. Quick check via cifas with bank cheque issued from to confirm that their customer issuing cheque is indeed insurance company etc, possibly a bit of due diligence if going ott to get comfort that no untoward media around insurance company, all above board, that would be sufficient that all parties good and let funds in. They did not need to freeze your account if no suspicion and if they acted quickly it would have been hardly noticeable to you.

There is no limit however with the number of transactions bank have to make a risk based decision for parameters which trigger review which could be a number of factors - eg pep or high risk accounts could be every transaction or transactions over £3k whereas a low risk account may be higher amounts. They also look for smurfing - lots of small transactions for example and sudden change in activity.

If you know you are putting a large amount in I would recommend telling your bank in advance - as long as it is a reasonable explanation that fits with your profile then they will know in advance and you can avoid this sort of. Crap.

Pps best practice is to regularly change your parameters as it avoid criminals learning these in order to get funds in under the radar

YANBU OP
If you rocked up with a brown paper bag stuffed full of cash as several customers used to do when I was a cashier back in the 80s then, fair enough - do some investigating, but when it is a cheque from an insurance company, it shouldn't be too tricky for them to establish that is legit.

It's a criminal offence to watch live TV without a TV licence. So if you were to do that, then the extra money you had by virtue of not paying for a licence is proceeds of a crime... And what you do with that money becomes a money laundering issue.

This is absolutely not what money laundering is. Money laundering is taking illegitimate money and making it legitimate. So working cash in hand to avoid tax and paying it into your bank as a gambling win is a small scale example of money laundering.

I had something similar although they didn’t put a tip the the account. Bank was Halifax. Reasonably large cheque went in and was immediately flagged up as fraud. I kept checking the account as the money never showed up and no one from the bank bothered to advise that a stop had been placed on the cheque due to money laundering suspicions. It took me multiple calls to the bank to get them to actually tell me what the issue was (initially they told me there was no issue, just a slight delay) and then two trips to the branch in question to meet with the manager.

The ironic thing was that the cheque was from Halifax as part of a PPI claim from an old loan. If they’d just checked internally they could have easily solved the issue. As it turned out, they messed me around so badly I got another £65 out of them as an apology/good will gesture!

didn't put a stop on

Banks are fucking hopeless these days. They have stripped out nearly all the experienced staff to cut costs and when something happens which actually requires a bit of thought, intelligence and experience the wheels fall off.

HSBC are the worst for stuff like this. My OH didn’t use his savings account for a year and they locked him out. He could only access the money with certain ID but not a passport or anything that he actually had. The woman just stood there point blank refusing to give him his money??? Took a while but Jesus I’ve never been so angry in my life. It’s his money! I loudly proclaimed that he should switch and the snarky woman agreed with him🤣

This is absolutely not what money laundering is. Money laundering is taking illegitimate money and making it legitimate. So working cash in hand to avoid tax and paying it into your bank as a gambling win is a small scale example of money laundering.

This, so in the insurance scenario, say you make 15k cash in drug money. You buy something with cash for 15k (e.g. jewelry). Take out insurance, wait a bit, and then lose it/ report it stolen and claim on the insurance. You now have "clean cash" from a reputable source. You might even lose money (e.g. the jewelry costs 18k but you only get 15k back after the excess) but you don't mind because the loss is worth it to get dirty cash into the system.

You may have seen in the news about people "engineering" car crashes for insurance- this is a similar thing. Buy car with proceeds of crime, insure car, write off car, claim on insurance

Actually banks can contact you asking about the cheque and at this stage it is not 'tipping off'.The offence of tipping off can only be committed if an ML investigation is underway or likely to be underway. Also insurance fraud is big for money launderers as it now looks like clean money from a legitimate source rather than dirty money .

It was a medical insurance claim so all the hassle sorting it made a difficult time tons worse.

Natwest are constantly blocking my cards for "security checks." I don't know they've done it until I try to pay for something and my card is rejected.

When it happened three times in a month I asked if they could stop it. They said not unless it happened three times in a WEEK.

I really need to change banks.

Very heavy handed

We paid a large sum of money in at our bank a few days ago and it was fine

So what's the best way to pay in a legitimate cheque to stop this account freeze from happening? I have a rarely used account with a different bank from my main one. I don't care if they freeze that for weeks. But presumably when I subsequently transfer the funds from that bank to my usual one the same problem will arise.

Don't be annoyed with the banks. It's the regulators that set the rules. And actually it's probably on balance worth it to stop criminals laundering money. And yes they do sometimes use normal people's accounts.

So we finally received a letter telling us that the transaction was subjuct to a security check and we must provide id and proof of the transaction. theres no reason why you cant do that then is there

Exactly what floribunda18 said, lack of any experience & actual banking knowledge by the majority of the staff due to the constant drive for sales.
It’s deposits of large amounts of cash that are supposed to ring alarm bells, not cheques drawn on insurance companies FFS.

Yes I did drive and than wheel my virtually disabled husband around town to sort it over two weeks after we should have had the money tucked awsy in savings . In additional I made about 15 phone calls and another visit to the branch where the transaction occurred as was suggested. A large town 40 miles awsy that we normally only visit monthly if that. None of these previous communication attrmpts achieved anything. No-one before this point even had tge decency to communicate that they had stopped the account. Feeling thankful that we had cash and normalky use credit not debit cards and it was onky one declined dd.

yabu
banks absolutely should check that cheques of high sums are legit.
but I think they should make it clearer that cheques/cash deposits for sums of xthousand or higher need to be made in person in branch.

Common sense should prevail. Professional salary into account. Probably has a benefits pacjage with healthcare insurance. Cq from healthcare insurance. Ring and confirm details. Job done. No stops od threats to close account required. Just common sense.

Happy for rhem to chsck but surely thwrs are better ways.

I did deposit it in person.

@Northernsoulgirl45 write to [email protected] & let them take it up with your bank. You need to be reimbursed for your inconvenience.