I received a letter today from a UK bank where I have had an account for 35 years and the letter said, Due to unsatisfactory operation we are planning to close your account on Aug 7th.
I find this letter very interesting because when we talk about unsatisfactory operation this banks own performance has been less than stellar.
Just recently they put my account on hold, which stopped me from being able to use it.
Now whilst I have been out of the UK for the past 12 years my main bank account has been in the host country where I have lived, so the UK account has just been a back up account to pay things like life assurance, and some other regular commitments in the UK, so this was something that I needed to get resolved, but it didn’t leave me high and dry.
When I contacted the bank to find out what the issue was, they told me that I had missed my last 3 months of my loan payments and until I addressed that they were going to keep the account on hold.
I thought that was strange because I had more than enough funds to cover the payments, so I asked why this had happened.
When they came back to me they said, ‘well it seems that we have accidentally cancelled you automated payment and this is why we haven’t been paid’.
So I said to them, ‘so you have stopped taking money out of my account to pay yourselves, by an accident that you caused, yet somehow thats my fault and you have now put my account on hold until I fix it?‘.
They said ‘yes’.
I said to them, ‘ok let’s just correct that and reinstate the automated payment’.
But they told me ‘we’re sorry we can’t do that, once the automated payments are cancelled they cannot be reinstated automatically they need to be set up manually, so you need to set up a new payment, you need to fill in a new form which you then need to sign and send to us’.
I said to them ‘really, you can cancel my payments by mistake, but you don’t have the tools to correct your mistake, it needs me to create a new automated payment’.
Again they said ‘yes’.
So I said to them ‘ok, please send me a form so I can create a new payment’.
It was then that they told me that not only would I need to recreate that automated payment for them, but that I would also need to do it for all my automated payments as they had cancelled those as well, and oh yes, it might be a good idea to contact the companies and explain what had happened and that they might be thinking of cancelling any contracts I had with them as they wouldn’t get paid.
I was dumbfounded, they had made a mistake which resulted in my automated payments being cancelled, but yet they couldn’t do anything to fix it, and even worse at no point during the entire discussion was there any apology for the mistake that they had made, nor was there any apology for any impact that this might have. They just told me what I needed to do to fix their problem, and they asked me if I could address it as quickly as possible.
As you can imagine, I wasn’t very happy at this, and I have moved very slowly to address the problem for them, although I have quickly transferred my other obligations to my german account.
So it doesn’t come as much surprise to me that they want to close my account, but I am surprised that they due this because of unsatisfactory operation.
Here is the recent track record of my bank:
- Dec 2013 – fined $100m by US for Iran sanctions violations
- Dec 2013 – fined £390m by EU for being part of interest rate rigging cartel
- Feb 2013 – fined £5.6m for failing to properly report over a third of transactions
- Apr 2104 – fined by Hong Kong regulators £450,000 over traders hiding losses
- May 2014- Big four UK banks (which includes mines) to reserve £21.5bn to meet their fines and customer complaints
In addition to this, my bank was also included in a report by Bloomberg’s Jonathan Weil, which rightfully prompted him to award my bank the “dumbest bank of the year” award for 2013. Here’s an extract about that article.
Often, violations of the law are difficult for banking regulators to establish, because the evidence tends to be gray and open to interpretation. That doesn’t seem to have been a problem in this instance.
According to a consent order released today by the New York State Department of Financial Services, the bank provided employees at its payment-processing centers in the U.K. with written instructions, containing “a step by step guide on how to create and route U.S. dollar payment messages involving sanctioned entities through the United States to avoid detection.”
Those instructions included this:
“IMPORTANT: FOR ALL US DOLLAR PAYMENTS TO A COUNTRY SUBJECT TO US SANCTIONS, A PAYMENT MESSAGE CANNOT CONTAIN ANY OF THE FOLLOWING: 1. The sanctioned country name. 2. Any name designated on the Office of Foreign Asset Control (OFAC) restricted list, which can encompass a bank name, remitter or beneficiary.”
In other words, the bank explicitly told employees how to cover the bank’s tracks. The consent order said the bank conducted $523 million of transactions from 2002 to 2011 through New York correspondent banks involving Sudanese and Iranian customers. It also said that, to a lesser extent, they processed U.S. dollar transactions for clients in Cuba, Burma and Libya.
I am not quite sure how they would categorise their own operations when tell me that mine are unsatisfactory because of mistake that they have made, especially as I haven’t violated US sanctions, been part of an international cartel rigging interest rates and nor have I misreported information or hidden losses.
The phrase ‘let he who is without sin cast first stone‘ springs to mind.
In addition to this, this company was so badly run that during the financial crisis it needed significant government bailout money and according to reports has already squandered every penny of its £46bn bailout after continuing to rack up huge losses since the financial crash.
As leaders when we look to criticise others we should look at ourselves and see how we are performing before we start to criticise them or take action.
If we are making mistakes, and potentially bigger mistakes than those we are criticising, it just makes us look hypocritical.
We need to clean up our own act, get our own house in order, before we start to call out others, when we do that it will give our words much more gravitas.
I’m am happy that I will no longer be receiving the services of bank which I would also see as the dumbest bank in 2013, and they might also get my vote for 2014 too.