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HSBC apologizes for cash confusion

By David McMillin · Bankrate.com
Wednesday, January 29, 2014
Posted: 6 am ET

For a few banking customers in the United Kingdom, removing funds from their accounts has been a bit challenging recently. Since November, HSBC has been turning down some customers who attempt to make large cash withdrawals.

"Cash presents more risk, and in particular financial crime risk, than other payment methods," a statement on the bank's website reads. "It also leaves customers with very little protection if things go wrong. Therefore, we need to monitor particularly closely movements of cash in and out of the banking system."

Not long ago, HSBC made headlines for the bank's failure to stop money laundering among clients with links to drug cartels and terrorist operations. The banking giant paid $1.9 billion worth of fines to the U.S. Department of Justice, the Office of the Comptroller of the Currency and the Federal Reserve in 2012.

The restrictions on account holders have been part of a response to those fines. When HSBC admitted wrongdoing in the money laundering case, the bank agreed to submit to enhanced compliance efforts. While the efforts may have worked to protect account holders and the institution alike, it appears that some of the bank's customers were less than pleased.

"Since last November, in some instances, we may have also asked these customers to show us evidence of what the cash is required for," the statement said. "However, it is not mandatory for customers to provide documentary evidence for large cash withdrawals, and on its own, failure to show evidence is not a reason to refuse a withdrawal."

In the U.S., account holders raise some eyebrows anytime they're involved in a cash transaction worth more than $10,000. The Bank Secrecy Act requires institutions to submit a form that documents the people or businesses involved in the transaction and the reason for the transfer of funds.

Have you ever encountered problems at your bank when attempting to take out an abnormally large sum of cash?

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