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Sunday, January 26, 2014

It's not your money

In case you were wondering why a bank can refuse to give you "your money" when you ask for it, it is because the terms of the loan you provided them permit it.
Stephen Cotton went to his local HSBC branch this month to withdraw £7,000 from his instant access savings account to pay back a loan from his mother. A year before, he had withdrawn a larger sum in cash from HSBC without a problem.

But this time it was different, as he told Money Box: "When we presented them with the withdrawal slip, they declined to give us the money because we could not provide them with a satisfactory explanation for what the money was for. They wanted a letter from the person involved."

Mr Cotton says the staff refused to tell him how much he could have: "So I wrote out a few slips. I said, 'Can I have £5,000?' They said no. I said, 'Can I have £4,000?' They said no. And then I wrote one out for £3,000 and they said, 'OK, we'll give you that.' "

He asked if he could return later that day to withdraw another £3,000, but he was told he could not do the same thing twice in one day.He wrote to complain to HSBC about the new rules and also that he had not been informed of any change.

The bank said it did not have to tell him. "As this was not a change to the Terms and Conditions of your bank account, we had no need to pre-notify customers of the change," HSBC wrote.
The only way you can be certain to get your money back is by calling the loan, or to put it in more common terms, closing your account.

Labels:

58 Comments:

Anonymous The One January 26, 2014 1:09 PM  

Can you link to the ruling concerning money in a bank being a loan. I thought that was a US ruling.

Anonymous VD January 26, 2014 1:19 PM  

I thought that was a US ruling.

No, there is an older UK ruling that precedes it.

Anonymous Storm Saxon's Gall Bladder January 26, 2014 1:30 PM  

"What does it mean, Catch 22? What is Catch-22?"

"Didn't they show it to you?" Yossarian demanded, stamping about in anger and distress. "Didn't you even make them read it?"

"They don't have to show us Catch-22," the old woman answered. "The law says they don't have to."

"What law says they don't have to?"

"Catch-22".

Blogger RobertT January 26, 2014 1:40 PM  

The world is coming to an end.

Anonymous Van January 26, 2014 1:54 PM  

"No, there is an older UK ruling that precedes it."

Old enough to have been carried over into US law (pre-Revolution)?

Anonymous realmatt January 26, 2014 1:55 PM  

If fury rises from within the depths of your bowels and murder flashes before your eyes there is still hope and the end is not so near.

The man in the article should have stolen his money back.

Anonymous Ivan Poland January 26, 2014 1:57 PM  

Because I bank at a small CU I do need to call ahead to make sure they will have the cash on hand that I am widthdrawing (when it's over a $5000 withdrawal) unless I go to the main branch. But never have they asked what I want it for. The guy should have closed his account right then send there.

"Why do you need that much cash?"

"Well I'm going to Costco to get a industrial size can of None of Your Businesses....and for you a club pack of mint scented STFU."

Anonymous lurker January 26, 2014 2:09 PM  

"Because we could not provide them with a satisfactory explanation for what the money was for. They wanted a letter from the person involved."

It's a stall tactic but it's still convoluted and shows how distorted the "relationship" is, what borrower asks the lender what he's going to do with the money he gives him and he won't give him anymore unless the reason is satisfactory.

Anonymous Morgan January 26, 2014 2:11 PM  

Can you provide us with a link to the original article you quoted? Thanks!

Anonymous David Farrer January 26, 2014 2:19 PM  

UK case was Foley v Hill in 1848.

Anonymous frenchy January 26, 2014 2:28 PM  

All,

I found a link that better explains this.

http://projectavalon.net/forum4/showthread.php?59054-Do-bank-deposits-belong-to-you

and the actual British case of Foley vs Hill.

Anonymous David Farrer January 26, 2014 2:32 PM  

And today more bank problems in the UK.

Anonymous TJ January 26, 2014 2:35 PM  

The bank robberies notes of the future:

"Give me all of MY money!!"

Anonymous Van January 26, 2014 2:47 PM  

"UK case was Foley v Hill in 1848."

Is there a case that is precedent setting for US law, or are we in "because we said so, peasant" territory?

Or is the UK case based on existing Common Law, and therefore considered applicable to the US?

Anonymous Jack Amok January 26, 2014 3:14 PM  

The only way you can be certain to get your money back is by calling the loan, or to put it in more common terms, closing your account.

That's what he should have done on the spot. "Okay, close the account, give me the entire amount."

"What are you going to do with it?"

"Open an account somewhere else."*


* - possibly in the First Matress Savings and Sleep Comfort Bank, or maybe the Commercial Coffee Can and Shovel Bank, Ten Paces From The Hazelnut Tree branch.

Anonymous frenchy January 26, 2014 3:19 PM  

@ Van,

I was able to find this :

(look at the 3rd paragraph in the exec summary). linked from here :

And this :

I think "the money is no longer yours" ruling can be traced back, in part, to the John Corzine case that I linked to above. However, I think it goes back even further.

Anonymous castricv January 26, 2014 3:19 PM  

I would have had the police drag me out forcefully after refusing to leave and making as legal a stink as possible for as long as possible. Enough clients that came in would get the message and a few people would close accounts. Then you can make a huge stink like this guy did with the press. All of this by the way is modern day protesting and hence very passive aggressive, but it's all you have really.

Not sure if he considered closing the account or if they told him he couldn't. Either way this is absolutely ridiculous.

One last thing to consider, and the snipet does not mention, is whether he had entered into a quasi CD format for his savings account. I worked in a bank for years in the US and I am not 100% on English rules, but perhaps he was only allowed a certain amount of draw or face a large penalty. Either way he would have had access to his money though albeit minus a percentage.

Blogger Eric January 26, 2014 3:35 PM  

"What are you going to do with it?"

"Open an account somewhere else."


Sure, that would probably make him feel better. But banks don't pull this kind of crap because messing with you is fun. The rules are coming from the government, and no matter where you put your money (in that country, at least) the bank is going to be following those rules.

This is the best argument for bitcoin I've seen yet.

Blogger LP 999/Eliza January 26, 2014 3:43 PM  

Debanking is the best route yet so much is tied to the appearance of a bank account. Those rec'ing soc. sec chex require direct deposit, paychecks, savings, etc. We have been forced further out of the system.

In 2012, I had rec'ed a few thousand dollars $5,000k from my home insurance co division for repairs regarding weather. When I attempted to cash the check my father and I had to present numerous ID's. We were told this check is a draft and it will take time to verify it. an hour later or so after my shaming the mgmt the chek was deemed dandy and the money went to the appropriate repairs. Needless to say I will never do business with PNC or anywhere else.

Anonymous Van January 26, 2014 4:06 PM  

Thanks, Frenchy.

Not that I think it won't happen over here, just curious what the legal rationale will be.

Anonymous Hank the Skank January 26, 2014 4:07 PM  

I suggest getting an account with the State Bank of South Dakota It is owned by the State of South Dakota and run by a bunch of conservative white guys. You may not be able to get your money out of your local bank, but you can wire transfer all the funds to your South Dakota account.

The problem is that the State Bank of South Dakota is not set up for convenience. You have to travel to Bismarck, South Dakota in person to create an account. It is not a part of the FDIC or FSLIC and thus you are not protected by the Feds, only by the integrity of South Dakotans, the strength of their economy, and their fundamental, almost genetic, conservatism.

Anonymous frenchy January 26, 2014 4:19 PM  

@ Hank,

I suggest what James W. Rawles said, only keep in the bank what you need to pay the bills. Turn the rest into something tangible like gold, silver, land, and my favorite, cold steel and lead. And wherever you hide them, only tell those who need to know.

Anonymous Jack Amok January 26, 2014 5:02 PM  

Sure, that would probably make him feel better. But banks don't pull this kind of crap because messing with you is fun. The rules are coming from the government...

Well, since HSBC has since recinded their policy because of the bad publicity, apparently it wasn't "coming from the government." This wasn't some big Bilberburger conspiracy, it was one dumb-ass bank doing dumb-ass things because they thought they could get away with it.

But it doesn't matter. Even if it was a government rule, the bank went along with it. So you close your account and end your dealing with the bank immediately. Whether they're the instigators or just accomplices, they're your contact with the system so sever it.

And you may have noticed, I said the account "somewhere else" doesn't necessarily have to be another bank. But why anyone has confidence in Bitcoins is beyond me. Pulling your money out of HSBC and converting it to Bitcoins because you don't trust the banking system strikes me as a total and utter category fail.

Blogger RobertW January 26, 2014 5:49 PM  

Is this a test case by the government via HSBC to see how the population will react to capital controls?

Anonymous bob k. mando January 26, 2014 5:50 PM  

and Kratman thinks there is zero possibility that the Chinese would ever contemplate military action against us because ...

the US Dollar has intrinsic value?

Anonymous DT January 26, 2014 5:55 PM  

The guy should have closed his account right then send there.

This. He should have immediately closed the account, demanded the balance, and threatened a lien on bank property if they didn't comply.

Anonymous YIH January 26, 2014 5:56 PM  

@Jack Amok:
I agree with you on bitcoin. To say I'm leery of it would be more than a bit of an understatement.
Just go to Denninger and type 'bitcoin' into the search box and that will give you an overview of what's wrong with it.
My biggest issues with it are; It's intangible (no electricity/internet = no bitcoins) and it's volatility.

Anonymous Too-Soon-ami January 26, 2014 6:11 PM  

Hank the Skank: "the State Bank of South Dakota...not protected by the Feds, only by the integrity of South Dakotans, the strength of their economy, and their fundamental, almost genetic, conservatism."

I wouldn't bank on the "conservatism" of people who elected Tom Daschle to the US Senate for 18 years. They also vandalized a mountain by carving Abraham Lincoln's face onto it.

Blogger Some dude January 26, 2014 6:18 PM  

It sounds like they are getting ready for a bank run.

Anonymous jack January 26, 2014 6:26 PM  

@Ivan: "Well I'm going to Costco to get a industrial size can of None of Your Businesses....and for you a club pack of mint scented STFU."

Like the sound of your typing Ivan. I will add this phrase to my lexicon for those times when just nothing else will do....

Anonymous bob k. mando January 26, 2014 6:41 PM  

so Mish posts something important for all American football fans to know ... the NFL is a 'non-profit' organization.

http://mobile.bloomberg.com/news/2014-01-24/americans-think-nfl-should-pay-taxes.html

http://globaleconomicanalysis.blogspot.com/2014/01/were-you-aware-nfl-is-treated-as-non.html

if you ever spent money on the NFL, you never should again. at least, not until these billionaires start paying taxes like normal people.

Anonymous Dr. Kenneth Noisewater January 26, 2014 6:41 PM  

Last time I stocked up on FRNs at my local credit union, the only question was for my preference in denomination. If there isn't something comparable in the UK it's probably time to open an account in the Bank of Sealy. Just make sure to get a desiccant for your safe, or use plastic bags and your freezer..

PS: picked up a Glock 26 and a compatible 50rd drum, mainly for the lulz.

Anonymous Credo in Unum Deum January 26, 2014 8:00 PM  

the State Bank of South Dakota

North Dakota.

http://banknd.nd.gov/

We're not like those long-haired, illiterate barbarians to the south.

Anonymous Jean January 26, 2014 8:01 PM  

Bismarck is in North Dakota. North Dakota has a state owned bank.

Anonymous Red Comet January 26, 2014 8:22 PM  

Guy should have told them to give him his money or he'd be finding another bank that very day...and then done it anyway after they gave the cash to him.

Blogger Doom January 26, 2014 9:25 PM  

Yeah, I saw some of what is going on. I'm not convinced they can terminate, at this point. Or, if they can, and too many do, that will be changed. It really isn't your money anymore, for... whatever that term actually even means anymore.

I am also wondering, by doing that, if they aren't trying to create a run on the banks, either to shove people back in their places, because they can't without it destroying the system (or it just isn't there), or simply to create riots and confusion. Actually, I think they are trying to cause a problem. They need a problem so that big government can fully take over. Sort of like a failsafe being undone by the very people meant to be protected by it. None of that is correct... Something is up.

Anonymous The other skeptic January 26, 2014 9:39 PM  

And now China does some interesting stuff and also scares some people

Anonymous zen0 January 26, 2014 9:51 PM  

Something is up.

You betcha. They are all trying to find ways to meet the Basil accords for having double the collateral they used to in order to survive the next financial crisis.

The politician's role is merely to help handle the perceptions of what is happening.

Bail ins, capital controls, QE, its all part of the attempt to survive the next tsunami.

Ironically enough, the purpose of these reforms is to address the moral failings of the bankers in regard to greed uber alles.

I am sure it will be very successful, for they are honorable men.

Anonymous Mr. Stubby January 26, 2014 10:11 PM  

if you ever spent money on the NFL, you never should again. at least, not until these billionaires start paying taxes like normal people.

As if being molested upon entering is not enough. Which, of course, the people gladly give over their bodies for football. If they were told to strip down for football, they would.

Anonymous zen0 January 26, 2014 10:17 PM  

if you ever spent money on the NFL, you never should again. at least, not until these billionaires start paying taxes like normal people.

Hey, that reminds me. Howcum there is no open Pro-Bowl Thread?

Whats up with that?

Blogger Tom Kratman January 26, 2014 11:01 PM  

"and Kratman thinks there is zero possibility that the Chinese would ever contemplate military action against us because "

Can you point to where I said that, Bob?

Anonymous Dave January 27, 2014 12:07 AM  

Banks keep a limited amount of cash on hand for daily operations. "Everyone knows that"

The real question is why would anyone still bank with HSBC...http://ncrenegade.com/editorial/hsbc-executive-resigns-at-senate-money-laundering-hearing/

Anonymous Jack Amok January 27, 2014 12:15 AM  

Hey, that reminds me. Howcum there is no open Pro-Bowl Thread?

Those open threads are only for football games.

Anonymous bob k. mando January 27, 2014 1:28 AM  

Tom Kratman January 26, 2014 11:01 PM
Can you point to where I said that, Bob?



it's been over a week and i'm not going to troll back through the posts trying to find the exchange, but i was pointing out that China could effortlessly hit us with a crippling nuke attack and you told me they wouldn't do it ... something to the effect of they are too financially involved with us.

which is a valid reason for them not to attack us.

as long as they think we intend to repay them the debts we owe with anything that has value.

the only reason the US dollar is still considered to have value is because pretty much every other country on the planet are also on fiat currencies which are being devalued by their respective central banks as fast or faster than the Federal Reserve.

Iran is already evading sanctions by trading oil directly for gold ...

Qaddafi floated the idea of direct oil-for-gold transactions just immediately prior to the west deciding that he just couldn't be permitted to remain in power any longer ...

you connect the dots.


zen0 January 26, 2014 10:17 PM
Hey, that reminds me. Howcum there is no open Pro-Bowl Thread?



the pro bowl is no more "football" than a game between the Blackhawks and the Knicks.

Anonymous Too-Soon-ami January 27, 2014 1:39 AM  

so Mish posts something important for all American football fans to know ... the NFL is a 'non-profit' organization.

So the hell what? The individual teams are For-profit, they make all the profits, and pay all the taxes. The NFL is just a co-op agency for the teams. It's like an S-Corp (subchapter S) for corporations, instead of for people.

Blogger Outlaw X January 27, 2014 1:55 AM  

People never figured out it was never our money, they are now just telling us.

Blogger Outlaw X January 27, 2014 2:56 AM  

I am a 27 year old women with three children receiving welfare. I get a check every month and food stamps. My housing is supplemented and only pay 50 dollars a month instead of 500 dollars a month. If I get a job, it will probably be minimum wage because I am unskilled and won't get all the breaks and will spend half my income (or more) on childcare.

I am a 27 year old women college graduated with no children and three cats, I get no breaks and pay 500 dollars a month for rent plus cat food. I have another 80,000 dollar non dischargeable loan that I pay every month, plus a car and gas to get me to work. I majored in women studies and am working at Pizza Hut as a manager pulling down 30,000 a year.

I am a 27 year old man not married with a degree in business administration with a 90,000 dollar non dischargeable loan, I have no cats and am paying for all the same things. And now I realize I made a mistake. I am in debt to my ears and eating microwave dinners because I was told I needed an education.

Of these three, who is better off, especially if you are told it isn't your money in the first place? Is it pride, fancy or ignorance?

Now what happens?

Anonymous The Great Martini January 27, 2014 4:26 AM  

You can always put your money into bitcoins.

Anonymous zen0 January 27, 2014 4:50 AM  

the pro bowl is no more "football" than a game between the Blackhawks and the Knicks.

I didn't think I needed a sarc tag on that one.

Anonymous zen0 January 27, 2014 4:52 AM  

If it is not my money, why do I have to pay bank fees?

Blogger Outlaw X January 27, 2014 4:53 AM  

You can always put your money into bitcoins.

Bitcoins are owned by speculators like all fiat money.

Anonymous Joe January 27, 2014 5:09 AM  

Guys, could bitcoin solve the problem of fiat currency?

Anonymous The Great Martini January 27, 2014 5:57 AM  


Bitcoins are owned by speculators like all fiat money.


As far as I understand them, and I'm by no means a bitcoin expert, once you have recorded the bitcoin transaction keys in your wallet, you own them, and nobody can take them away, certainly no central bank, anywhere. No speculator has any claim to them at all. At the same time, I see no mechanism to protect against inflation, so they're probably a pretty insecure investment. They seem to be best tailored for fast transactions, like online gambling.

Blogger Tom Kratman January 27, 2014 6:45 AM  

There's a considerable difference, Bob, between it being unlikely they will want to attack us and them not contemplating attacking us. Indeed, I would be terribly surprised if there are not at least four official groups in China who do not spend just about every minute of every working day contemplating attacking us. To attribute to me what you have suggests that you think I am considerably more stupid than the evidence you have will support. It also suggests some even worse things about you.

Anonymous Josh January 27, 2014 8:14 AM  

Guys, could bitcoin solve the problem of fiat currency?

No

Anonymous Bob Sacamano January 27, 2014 10:29 AM  

"it's been over a week and i'm not going to troll back through the posts trying to find the exchange, but i was pointing out that China could effortlessly hit us with a crippling nuke attack and you told me they wouldn't do it ... something to the effect of they are too financially involved with us."

Even if our economy went into the tank, and the U.S. paid pennies on the dollar to the Chinese, their government and their people are not going to risk world annihilation.

Anonymous Jack Amok January 27, 2014 12:07 PM  

Even if our economy went into the tank, and the U.S. paid pennies on the dollar to the Chinese, their government and their people are not going to risk world annihilation.

Norman Angell, are you reincarnated as Bob Sacamano?

Blogger Tom Kratman January 27, 2014 3:54 PM  

Bob S:

They might risk world annihilation, provided it's only the world outside of China. Strikes me as most unlikely they'd risk Chinese annihilation, and even less likely they'd risk Chinese annihilation to get a few cities on the left coast we'd be better off without, anyway.

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