Don't bank on easy access to your own money ...
... and watch out for 'vishing' expeditions, says the FOS
Customers at one of our biggest banks, HSBC, were told they couldn't take out large sums of cash from their bank accounts without explaining how they planned to spend the money. Many people have reacted angrily to the idea of such restrictions, but is this really an imposition on your freedom, or simply the best way for banks to protect their customers?
When you consider the mis-selling scandals, Libor rigging and excessive charges that have plagued Britain's banks, it's understandable that people are outraged by recent stories of customers being refused large cash withdrawals. Issues arose when HSBC quietly introduced new guidelines back in November 2013 asking staff to question the intentions of customers requesting large sums. Something got lost in translation and the bank admits some branches took this a step too far by refusing requests.
"By imposing restrictions upon customer withdrawals at a time when some bank analysts are pointing at HSBC's balance sheet, all the bank has succeeded in doing is stoking rumours," said Joel Benjamin of anti-bank campaign group Move Your Money. "If HSBC wants to impose restrictions upon the withdrawal of customer money, then it should start by being more transparent, revealing where customers' deposits are actually invested," he added.
HSBC has now explained that it is not mandatory for customers to provide documentary evidence for large cash transactions, and that failure to show evidence is not enough of a reason for staff to refuse a withdrawal or deposit, unless they are virtually certain of fraud.
"We apologise to any customer who has been given incorrect information and inconvenienced, and have since updated guidance to staff," said James Thorpe, a spokesman for HSBC.
Similar policies are actually in place at other banks and building societies; for example, Santander says that it may ask for additional ID or proof of the reason for large withdrawals and in some cases, the branch may not physically have enough cash available, so the bank asks for a couple of days notice when requests are made for large amounts, such as £5,000 in cash.
It seems sensible for banks to ask for notice before customers withdraw several thousand pounds over the counter – cash stocks are limited, particularly in smaller branches – but do they really need to know how you plan to spend your own money?
The banks say that these questions help to prevent fraud and in fairness they do have a duty of care towards customers, as well as legal obligations to prevent money-laundering. If you are asked by workmen to pay in cash, you may well be helping them to avoid paying tax. There is also "vishing" (voice phishing) and "courier fraud" whereby scammers phone customers posing as a member of the police or the bank. Upon telling them that their account has been hacked, customers are then urged to hand over their cards and withdraw cash to give to a motorcycle courier for safekeeping, never to see it again.
It isn't a very sophisticated scam, but these fraudsters also tell you to call the number on the back of your card or 999 for verification – in reality they do not hang up but stay on the line so that you are still speaking to them or one of their associates. The Financial Ombudsman Service (FOS) says it has seen an increase in these scams, with more than one hundred complaints referred to them in the last six months.
"Vishing and courier fraud target some of the most vulnerable people in society by duping them into transferring money directly into criminals' accounts, or handing over bank cards and personal identification numbers to couriers – in some extreme cases people have also handed over cash or jewellery," says Rory Stoves of the FOS.
Banks are also increasingly cautious about fraudulent credit and debit card activity abroad. When you use your card overseas, it is marked as an "abnormal" spending pattern and if you haven't told your bank you're going away, it may stop your card without warning. Not all banks will automatically block cards being used overseas but they might if an unusually large transaction or cash withdrawal is taking place. Banks and credit card firms often ring customers when they see a suspicious transaction so make sure they have your current mobile number.
If you inform your bank beforehand, you can usually avoid problems. Santander will put a "holiday flag" on your account and it can flag up to five destinations in one trip over a 90-day period. Issues can still arise, however, so play it safe and bring a 24-hour phone number with you so that you can release the block as quickly as possible.
It may also be worthwhile having more than one card to pay a bill, as you don't want the embarrassment and even potential legal consequences of being unable to pay a bill in a foreign country. In the UK you may be allowed to leave an address and then pay at a later date, but overseas the police could be called, which would certainly put a dampener on any break.
Ombudsman top tips
If you are worried about a call, phone the police non-emergency number 101 from a different handset, or allow five minutes for the line to clear
Police and banks will never ask for your PIN, bank details or cards. If you are called by someone who does, hang up.
Keep passwords and PINs safe – don't write them down.
If the call sounds suspicious or too good to be true, you may be right.
Check statements regularly for transactions you do not recognise.
Debt in Britain: Numbers seeking help on how to cope with mounting bills goes up by more than half in three years
Bargain Hunter: BT improves its mobile reception with 'incredibly competitive' deals
Help to Buy Isa Q&A: Are they real help for first-time buyers or simply a vote-winner for the 2020 election?
Offset your mortgage and save thousands
Simon Read: 'It went below the radar but you could be eligible for a tax break on your savings'
- 1 Germanwings plane crash: Video shows co-pilot Andreas Lubitz learning to fly as a teenager
- 5 Germanwings crash: 'Andreas Lubitz planned to marry pregnant girlfriend', claims German report
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Street preacher quoting from the Bible fined for calling homosexuality an 'abomination'
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
The West has it totally wrong on Lee Kuan Yew
iJobs Money & Business
£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...
£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...
£18000 - £20000 per annum: Recruitment Genius: A Client Services Assistant is ...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
Day In a Page
This four-bedroom cottage is a Grade II-listed town house, well-located for the thriving market town of Nailsworth.
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
A boutique mews house, set around a central courtyard, with three bedrooms and a private roof terrace
A four-bedroom farm-conversion with three bathrooms and two reception rooms
A two-bedroom detached house with ensuite bathrooms and a sun-drenched decked terrace, £750,000
A modern and spacious two-bedroom, penthouse flat with two bathrooms in a prestigious development
A beautifully renovated five-bedroom terrace with three reception rooms and a courtyard garden, £700,000
A four-bedroom period house which has been extended to provide almost 2,500sq ft of living space, £675,000
A pretty three-bedroom Georgian home with a 22ft drawing room and a master suite with a balcony, £525,000
A substanstial family home with five bedrooms and landscaped gardens in the much sought-after Branksome Park area
A well-presented three-bedroom house with front and rear gardens, close to White City station, £475,000
A handsome five-bedroom house in a sought-after location close to the city centre
A five-bedroom country home with valley views, equestrian stables and 27 acres of land, £725,000
A six-bedroom farm house with separate, detached cottages and 371 acres of land
A two-bedroom cottage with parquet floors, chunky beams and an open fireplace
A three-bedrrom flat with 2,733sq feet of living space, a beautiful private garden and 15 acres of communal grounds
A four-bedroom chalet bungalow with three bathrooms and a spacious garden, £525,000
A two-bedroom flat with an open plan kitchen and two balconies, close to Arsenal station