Money: Sometimes the bank teller tells dreadful tales

Innocent bank customers making unexplained transactions of just a few hundred pounds may be investigated by a police agency created to combat drug dealers and football hooligans. Paul Slade reports.

Every year banks and other financial institutions report about 16,000 suspicious transactions to the National Criminal Intelligence Service (NCIS), only about 20 per cent of which lead to any active investigation. In the case of your bank account, "suspicious" can mean anything that does not fit the normal pattern of trading in your account.

Customers are not told of the reports, can not rely on the Data Protection Act to uncover this information, and may be left with an unjustified black mark on their branch records indefinitely.

John Wadham, director of Liberty (formerly the National Council for Civil Liberties), says: "This virtually automatic process means individuals are branded as being suspicious without being told what is happening to them and without any process for clearing their name.

"There is a fundamental right of privacy in relation to one's bank account, and that shouldn't be violated unless there is real suspicion that someone is transferring money around that is the proceeds of crime."

The banks have a legal duty to report any transactions they consider suspicious, neglect of which is punishable by a prison term of up to five years and unlimited fines. Because the disclosure is demanded by law, the process is exempt from the Data Protection Act.

David Smith, deputy data protection registrar, says: "We have some concerns whether banks may err on the side of caution and report things that are not really suspicious. This has clear implications for customer confidentiality."

Even if you ask your bank whether it has any note of suspicious transactions on your account, staff cannot tell you, as this is seen as tipping off potential criminals.

The NCIS is subject to the Data Protection Act, but can refuse any request if it believes giving you the information would hinder its investigations.

Reports of suspect transactions usually start at branch level, perhaps with the teller who served you, and are passed up the hierarchy for further consideration.

If head office staff can find no reasonable explanation for the transaction, it goes to the NCIS. Although reliable figures are hard to come by, the banks are thought to pass on about one in four of the references which reach head office level.

One money laundering expert with a major bank, who asked not to be named, said: "Believe it or not, we have had Lottery winners reported to us, quite often because the branches don't always do their background checks.

"It's like anything else - there are some good branches which will make some further enquiries before referring things on, and others which will pass everything on to get it off their desks."

These cases were caught before reaching NCIS, he adds. "I like to think that we're reasonably diligent in our approach and don't report needlessly to the authorities."

The banks themselves will not say what criteria each uses in deciding what makes for a suspicious transaction.

Nor will they give any figures for how many NCIS references each bank makes each year.

Sue Thornhill, of the British Bankers' Association, says: "There have been a number of reports that have gone forward right through to NCIS that have been for a couple of hundred pounds and have triggered a valid investigation.

"If someone, for example, is unemployed and they start banking a couple of hundred pounds a week that can easily be suspicious and could trigger a report."

In other cases, a report may be thought necessary because a small business customer is suddenly banking much higher takings than the bank is accustomed to with no ready explanation.

The same regulations govern money deposited in a PEP, unit trust or other investment plans.

In theory, the NCIS is supposed to give the banks regular feedback on cases referred to it so the banks can purge their records of any unjustified black marks.

In practice, this feedback either takes many months to arrive, or fails to differentiate between cases which are actively being investigated and those which have yet to be looked at.

Ms Thornhill says: "We have fought and fought for proper feedback.

"It is wholly unsatisfactory that the banks should be breaching customer confidentiality in this way under the compulsion of the law but not able to lift that black mark from the customer's file.

"It's putting genuine customers at risk of investigation and nobody wants that."

Mr Wadham agrees. "It's a Draconian system," he says. "The banks are in impossible position."

He wants to see a system which forces the banks to go to an independent arbiter, such as a judge or an ombudsman, who would decide, case by case, whether NCIS notification was needed.

"Rather than it being a semi-automatic process, there would then be some kind of objective assessment of the level of suspicion, and someone independent analysing that," he says.

Voices
voices
News
general electionThis quiz matches undecided voters with the best party for them
Arts and Entertainment
Keira Knightley and Matthew Macfadyen starred in the big screen adaptation of Austen's novel in 2005
tvStar says studios are forcing actors to get buff for period roles
News
Prince William and his wife Catherine, Duchess of Cambridge show their newly-born daughter, their second child, to the media outside the Lindo Wing at St Mary's Hospital in central London, on 2 May 2015.
news
Have you tried new the Independent Digital Edition apps?
Life and Style
ebookNow available in paperback
ebooks
ebookPart of The Independent’s new eBook series The Great Composers
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs General

    Ashdown Group: Trainee Consultant - Surrey/ South West London

    £22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

    Ashdown Group: Trainee Consultant - Surrey / South West London

    £22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

    Ashdown Group: Recruitment Consultant / Account Manager - Surrey / SW London

    £40000 per annum + realistic targets: Ashdown Group: A thriving recruitment co...

    Ashdown Group: Part-time Payroll Officer - Yorkshire - Professional Services

    £25000 per annum: Ashdown Group: A successful professional services firm is lo...

    Day In a Page

    Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

    Fishing is on Nigel Farage's mind

    Ukip leader casts a line to the disaffected
    Who is bombing whom in the Middle East? It's amazing they don't all hit each other

    Who is bombing whom in the Middle East?

    Robert Fisk untangles the countries and factions
    China's influence on fashion: At the top of the game both creatively and commercially

    China's influence on fashion

    At the top of the game both creatively and commercially
    Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

    The man known as GOD has a reputation for getting the job done

    Lord O'Donnell's three principles of rule
    Rainbow shades: It's all bright on the night

    Rainbow shades

    It's all bright on the night
    'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

    Bread from heaven

    Dutch survivors thank RAF for World War II drop that saved millions
    Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

    How 'the Axe' helped Labour

    UK will be 'run for the wealthy and powerful' if Tories retain power
    Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

    The price to be paid for challenging the rule of extremists

    A revolution now 'consuming its own children'
    Welcome to the world of Megagames

    Welcome to the world of Megagames

    300 players take part in Watch the Skies! board game in London
    'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

    Charlotte Gainsbourg on 'Nymphomaniac'

    Starring in one of the most explicit films ever
    Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

    Robert Fisk in Abu Dhabi

    The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
    Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

    Vince Cable exclusive interview

    Charging fees for employment tribunals was 'a very bad move'
    Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

    Iwan Rheon is returning to his Welsh roots

    Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
    Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

    It's time for my close-up

    Meet the man who films great whites for a living
    Increasing numbers of homeless people in America keep their mobile phones on the streets

    Homeless people keep mobile phones

    A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before