Two uniformed police officers questioned Albert Crowl, 32, of Romford, Essex, as he was waiting for his money in the Woolwich branch in Kilburn High Road, north London, last March.
They had been called by the manager, who suspected that Mr Crowl was attempting to steal funds from an account that did not belong to him.
Mr Crowl - a motor mechanic who had saved with the Woolwich for 15 years and had an 'instant access' Prime Gold account - had his passbook and full identification with him. He was trying to withdraw pounds 3,700 to buy a car.
When he went to the counter, Mr Crowl was invited into the manager's office.
'I then heard a police car siren stop outside the branch and two officers came in,' said Mr Crowl.
'They said something like 'Is this the culprit?' and then interrogated me. All my details were on the counter.
'After they were satisfied that I was not stealing, one of the policmen said: 'If I were you I would move my account.' '
The Woolwich said the Kilburn branch did not remember the incident or Mr Crowl's name. Mr Crowl says he was so upset by events that he had to take time off work.
Copies of letters to Mr Crowl from the Woolwich solicitors' office show that the society tried to settle the matter with an ex gratia payment of pounds 50 'in the interests of customer relations'. Mr Crowl returned the cheque.
The Woolwich then withdrew the offer, saying it owed him no legal responsibility.
Mr Crowl's credentials had already been checked four days earlier at another branch of the building society where he gave notice of his intention to withdraw pounds 3,700.
The Woolwich sent a district manager to his Mr Crowl's home, where his mother confirmed that he owned the account.
In another letter, the Woolwich admitted it was 'to some degree responsible for the inconvenience and embarrassment you were subjected to'.
The assistant manager for group security wrote: 'Recently the society, like others, has been experiencing passbooks being intercepted in the postal system and the thief making large fraudulent withdrawals.'
The Woolwich claims that Mr Crowl was unable to prove identity when making the initial request for funds.
Mr Crowl says he was not asked, but had identification with him anyway.