Bank of america did this to me, in the same weekend i was moving out. All my stuff was in the car, it was a friday at 3PM and i was in the gas station.
I couldn't fill up my gas. Called and they told me to come to the bank with two forms of ID. When I arrived to the bank the fraud department was operating in NY (3hrs ahead) and they were closing, so they told me to come next tuesday (it was a long weekend).
I went homeless for 1 week with no food. It was my last semester in university and couldn't pay for tuition because my bank acc was locked, so the university dropped my classes and i was not able to graduate, as failing to stay enrolled (international student) i had to go back to my country.
- 3 days before i received a transfer from my brother (6k usd) to pay for tuiton and new place
- no unusual transactions, never reported any fraud before, just was hit with the "per our agreement we can close your account without notification." and they provided me the balance 1 week later.
Well, this happened in 2017.. fast forward to this account closure effect on my life:
I had to go back to my country, without a degree, was not able to land any job. Unfortunately, good places require degrees. Stayed unemployed, hit with chronic depression as anyone would. Lost 4+ years of professional progress. When covid came, i was able to complete my degree online and graduated in 2021, but because all fresh grad programs require a certain age; i did not qualify. Was able to finally land a good job in 2023.
This issue needs a resolution, what happened to me might not happen to everyone, i know my situation is different. but financial institutions should be held responsible for actions like this, imagine someone else who needs to pay for his/her medication...
I think a lot of folks reading this will immediately be critical and tell you exactly how easy it would have been to solve your problems from spiraling out of control. They are likely largely factually correct.
What is not being said is that many folks are operating at the limits of their executive function. Add something like this to an already stressful period of time to such people, and they simply will not be able to advocate for themselves in an effective manner or make logical decisions in the moment.
I say this from personal experience. Small stuff like this, in particular gatekeeping kafkaesque stuff, absolutely kills my life in a way that is not logical or explainable. It effectively shuts my brain down. I've lost many years of my life due similar issues, where in the end someone else could have handled them as a minor annoyance.
Multibillion dollar organisation with an essentially unlimited scope for bureaucratic work versus kid trying to move house at the weekend.
The “why did he do this to himself?” meme seems appropriate.
Also, yes. I’ve gotten better over the years at taking a breath and just doing it but it still sets me off. Employers exploit this in people by adding hurdles in expense systems. It’s an oft forgotten corporate dark pattern.
> What is not being said is that many folks are operating at the limits of their executive function.
I don't think this can be understated. I didn't pay income taxes for two years. Not because I was dodging them, but because I was going through a divorce, single-parenthood, and depression and was barely able to hold onto my job.
2 years later, I got my shit together, paid back taxes and fees (I had the money all along), and it was easy... when I had the bandwidth for it. I just couldn't at the time.
Most things are easy in isolation, it's having patience for someone-who-can't get-your-one-simple-thing-right-because-they-have-too-many-other-simple-things-on-the-go-right-now that is hard.
Horrible. I've heard similar stories but this one's the worst by far. This shouldn't be allowed to ever happen again, such sudden closures without warning need to be illegal.
The issue is banking is highly regulated but a lot of the regulation is about AML, terrorism screening and such. Not actually protecting customers from abuse but rather the other way around - banks are taking precautions to protect themselves from customers. Some of the regulation is also the result of decades of lobbying efforts by major players, making it extremely hard for new ones to compete. Banks are rarely held accountable because for some reason most regular people are fine with this or don't understand it.
There is a solution - not sure if everyone's ready to hear it yet: Decentralized finance. Good luck to a bank trying to shut down your self-hosted Ethereum wallet. Banks provide important services and will continue to exist, but giving them full unchecked control over our life savings and finance is mad. There are a lot of other issues with the current system, and many people don't really understand the contracts they're signing, including that they don't legally own "their money" in the bank account in most cases (they're creditors). But the question of effective control over ones own funds is the most crucial one to me.
> There is a solution - not sure if everyone's ready to hear it yet: Decentralized finance.
I want the pendulum to swing the other way. Everybody gets and gets to keep forever an account at the Reserve Bank.
> self-hosted Ethereum wallet
I'm sorry.
The technology might be fine
But I simply do not trust the people involved with cryptocurrency.
Not just the scammers such as SBF,
I don't trust the "victims" to make wise choices.
They see this as a get rich quick scheme.
They are not "victims".
They are money hungry speculators.
Most don't even host a full node.
Even people who have a means to do so
Such as this guy tech deals on YouTube.
The miners want to turn a good profit when they should be happy to just break even.
The transaction costs are still too high.
It should be very close to if not exactly zero dollars.
The block chain should not be a place to make huge profits.
The prices should not go "to the moon".
In fact, you shouldn't even be thinking of the price of your cryptocurrency with respect to the US Dollar.
This already means we lose if we constantly compare Bitcoin oh sorry ethereum and the dollar.
> I want the pendulum to swing the other way. Everybody gets and gets to keep forever an account at the Reserve Bank.
Overhauling the financial system to ensure that citizens cannot have their accounts revoked on a whim sounds like a nice pipe dream. I am cynical we will ever see that in our lifetime, as countries prefer to have full control over their citizen's wallets (e.g. see Canada enacting Emergencies Act to curb protests).
in a multipolar world though, a country being able to do that weakens the currency severely in international markets. countries may like keeping their populace under their thumbs, but they may have overriding concerns - at least that's my hope.
> I want the pendulum to swing the other way. Everybody gets and gets to keep forever an account at the Reserve Bank.
I believe this would result in more instances of funds being frozen when under the suspicion of doing something/being associated with someone doing something illegal.
Just as Social Security was promised to never be used as a national ID, but was ultimately used as an identification mechanism[1], accounts with the Federal Reserve would be sold as a way to have a permanent bank account, but would ultimately be used as a way of implementing financial ruin upon those who choose non-compliance.
Conversely, I also believe crypto serves the same end. There is nothing a financial regulatory body would enjoy more than having every transaction take place on a publicly auditable ledger.
"Crypto" as a whole broke the circle of trust for most ordinary people. Mocking cryptos now became so mainstream that UK television ran ads, calling out crypto believers.
Not to mention all of crypto on and off ramps are incredibly centralized.
>Not to mention all of crypto on and off ramps are incredibly centralized
The major ones, yes. That's because most of the decentralized ones got shut down or closed voluntarily out of fear of getting prosecuted on ML charges. LocalBitcoins is a good example, first they got their site blocked in authoritarian countries like Russia. Then they had to restrict service in some US states and other more liberal places as well. Finally they shut down operations completely.
The question is if people still want to fight for such liberties or not. There are multiple countries working on CBDCs and to abolish or at least severely restrict cash payments. In many EU countries this is already reality. For example France has a limit of 1000€ for residents.
Cash is a quasi anonymous form of payment, in self-custody. Throughout history something similar has always existed, be it metal coins or even earlier forms of money. There is a real danger as we're on our way to go fully digital to lose control over this freedom to governments and/or banks.
Crypto however is not anonymous. It’s the opposite: a permanent immutable public record (ledger) of your transactions and holdings. That has always been unappealing for many people
I personally don't think so. I think there are very, very few people actually believing in real-world usage of cryptocurrencies. Most are in it for speculative reasons.
I was really interested in building things for bc really early on but the medium attracted nothing but pump and dump folk. The analogy would be to talk about growing your own food with people running mega farms.
I agree. It would be so much easier if everyone had a government bank account just like a SSN, that they could use (or not use), and also have other private checking/savings/etc accounts like now if they wish. It would also help teach people how to use them.
So you're admitting to having a self-interested stake in getting others to convert a portion of their net worth to crypto, no? Since getting others to buy in would directly provide liquidity to your own position. Tell me, what customer or financial protections are in place for your crypto position. Are there any? At all? Or if the drive holding that "good portion" disappears, then so do your assets, yes? Having a bank close my account sucks. A lot. The answer isn't to buy into an even more broken system built on the exploitation of those looking to buy into a get-rich scheme. The answer is to hold cash for times where your bank isn't available. Cash depreciates in value, sure, but at least it's not locked into a guaranteed deflationary spiral that ends with guaranteed marginal returns. At least my position in cash doesn't pit me in a game against people who bought in cheaper and stand to make exponentially more than I can, off my back even.
Crypto bros are the guy who used to stand in the alley with a trench coat full of watches... Hah.
We're doomed if this type of crowd sourcing of scams sets in without people noticing and calling it out.
I bought $100 of BTC about 1 year ago when it was at $24,000, just the other day it was at $34,000 and my account said my crypto was at $102. That's all I needed to know about it.
Note that his story closes with the admission that he was given his money back. When funds get stolen, they can be clawed back (barring issues of institutional willingness to do so).
For everyone whose Bitcoin wallets get stolen, there is no recourse. There is no customer service number to call, no court in which to file suit, and no service agreement over which to sue. Unless you live in some war-torn country where you don't know what government you'll live under tomorrow, putting a good portion of your net worth in an asset so easily stolen (or lost to something as banal as a forgotten encryption key) is a fool's errand.
Disambiguating the above sentiment from another context, we had a huge problem with Indian immigrants becoming victims of home invasions once it became apparent to opportunists that they accumulate and hoard large amounts of gold in their homes.
If you live in a first-world country, playing by third-world rules will pit you against third-world opponents.
A crypto currency pegged to the dollar won't "go to the moon". If you're looking for that, there's USDT.
Unfortunately, when trying to pick a coin, it's like trying to choose the best programming language. Each coin has its own ins and outs, there isn't one that is the best. They have their own time and place. A lot of people see this and want to use them in inappropriate places, but doesn't mean there aren't appropriate reasons for them, even if they're few and far between.
> Each coin has its own ins and outs, there isn't one that is the best. They have their own time and place.
This is just wishy washy rubbish trying to appear "diplomatic" and "balanced". Oh sure, you can mint some monkey jpegs or construct a needlessly complex and public smart contract for some esoteric "use case", but the truth is the majority of people in the world don't want or need those things.
People just want a money that works. You can send or receive it instantly across international borders, that no one can stop, and it doesn't lose it's value over the years.
Bitcoin is the only game in town, the "crypto bros" just don't realise it yet because they can make obscene amounts of money from pump and dump schemes with flashy marketing about "use cases" and "yield".
People don't want that. They do want their financial transactions to be stopped and reversed in the event of theft, fraud, merchant error, defective goods, unprovided services, etc. That's why Bitcoin and the other cryptos haven't caught on universally, there's no recourse when something goes wrong. (Really, Bitcoin just defines any redress as out of scope.)
> People just want a money that works. You can send or receive it instantly across international borders, that no one can stop, and it doesn't lose its value over the years.
Pure fantasy.
On cross-border trade that cannot be interdicted: There is no reason for any state to deny itself from sanctioning its adversaries.
On currency valuation: An economic zone has many many actors making independent decisions which in aggregate affects the value of the zone’s currency. The ability to debase a currency by over issuing it is identical to the ability to expand the supply to provide liquidity to a growing economy.
I was under the impression that all of the "pegged to the dollar" coins are too fragile for storing money long term. But USDT dropped down to 94 cents during the crash I was thinking of when others more thoroughly collapsed. What's the difference there?
99% are scam to be ignored, so really just looking at the oldest "coins" works.
Basically there is only BTC, BCH, XMR and ETH to choose from (of you cant tell the rest are scams that's on you).
Between those 4, BTC is a ponzi scheme for morons that doesn't really work as cash, eth is a hobby security but has equal potential to break or go to $1million.
That leave BCH and XMR, the only two cryptocurrencies that are not obvious scams.
Yeah, but most people opt for exchanges and VC-backed wallets instead of dealing with custody.
The reality has become even more regulated than banks. I've lost access to my Coinbase account, which I used to facilitate some fiat/crypto transactions, simply because of my nationality (I'm Russian but have been living outside of Russia for a decade). It was right after the 22/02 and the massive sanctions.
I wouldn't say fintech or neobanks are very trustworthy. Wise, a fintech platform, blocked my company's account for four weeks for "further investigation" right after the war as well. This caused me to miss bill payments.
I think the only way to mitigate the risk of a bank taking over your funds is to not store all your money in one account. Now, I have over 20 different accounts.
You're on the right track, but cryptocurrency has unfortunately shown repeatedly that it is not the solution (nevermind the ubiquitous fraud, scammers, but nearly 2 decades in, there is no good easy-to-use and secure system, the UX sucks).
It does appear necessary to spread your risk across multiple unrelated financial institutions. Make multiple bank & ccard accounts, and do not link them. Far less convenient, but should improve your safety.
right but how much emergency cash is needed? He had a transfer of 6000 plus whatever else? Should one have 6000 in emergency cash available? Seems excessive.
Anyway lots of countries seem to think they are soon going cashless, so good luck with that.
Going off of this article at least, it can take a few weeks for a bank to either reopen your account or send you the balance. Having around a month's worth of emergency cash would make sense to be able to handle an account closure like this.
I am a firm believer of having 10% of ones liquid net worth in cash or equivalent not gatekept by anyone but myself.
This is from extremely hard won personal experience.
Yes, it's a lot of cash. I don't mean keep it all under your mattress.
Edit: A month of your total living expenses including mortgage/rent is what I would deem as both reasonable, and an absolute bare minimum. Not having this on hand would make me feel extremely uncomfortable as you are living at the pleasure and whims of others.
One day, pirates learned they could get better interest on their treasure by putting it into banks than they could by burying it. But many had forgotten where they buried it and were not able to take part in this new world
I suppose the smart pirate would diversify their portfolio. Keeping it all the bank doesn't sound super smart for a pirate who might be unmasked and assets seized.
Certainly no form of wealth storage is without risks!
$200 emergency cash would have allowed him to fill up with gas, and pay for a motel or wherever he was going over the weekend.
Having multiple cards would too (I have a debit card and two credit cards, kept at home, but I don't want to be stuck with no money if my wallet/phone gets stolen)
I have no idea why a university which had received multiple on time payments would suddenly drop someone off the role for paying a few days late (especially with a reasonable excuse like "my bank put my account on hold")
Not to deviate with the original issue, which is banks suddenly freezing funds, with no warning.
The $200 would've helped guarantee food and gas, it wouldn't cover shelter, i was studying in California, the cheapest hotel was $130~ a night. I also tried explaining the situation to the university, but unfortunately you are considered a current student only if you paid your tuition.
There were also programs to help students in crisis (provide them with place to stay, food) but its only available to students who paid the tuition.
PS: As of that situation happening, now i have 6+ accounts with different banks, emergency cash, I do not want it ever happening to me again.
> I have a debit card and two credit cards, kept at home, but I don't want to be stuck with no money if my wallet/phone gets stolen
Ha. The same problem applies there too, and burned me at some random gas station in the middle of nowhere on the way to Spokane--8pm at night on a Friday--the bank raised a fraud alert on my credit card. The customer service agent said I had to talk to Fraud, who wasn't in until Monday. There were no hotels (not that I could pay for one of those either), nor any other customers to beg for change. We had to buy gas with change found in the seats and a miraculous disbursement of pity from the attendant. (This was an account with some no-name issuer, possibly Credit One. Only American Express and Capital One have ever been reliable for me in travel.)
Separate incident before that related to poor credit on my part at the time, but the issuer reduced my credit limit on a credit account without my knowledge.
You can't trust anything in the "cloud" will be there when you need it. Rather than hoarding gold or traveling with large amounts of cash (welcome back, literal highway robbery) the meddling to protect themselves needs to stop. Every bank is becoming PayPal.
You definitely need at least an ID, and often times they'll want a bigger cash deposit than you might expect, and even then they discourage it/many hotels do not allow it.
Well, sadly you are not the only one that did not believe me. My family, the closest to me, said the same thing, and it took a while to convince them i was not in california to play.. that is after coming back empty handed / degreeless.
Please refer to the FAQ from the university i was studying at. #10 to be exact https://sbs.fullerton.edu/about/FAQs.php
I was late to pay the tuiton, only because the bank account was suddenly frozen, on a long weekend.
This is the program i was talking about, you can review the eligibility, which states that the student must be currently enrolled.
https://www.fullerton.edu/basic-needs/
I don't have any context into OP's story that isn't in this thread, but there's no legal requirement for a bank to immediately give you access to your funds if your account is closed, especially if its closed for suspicious activity. My wife had a PNC account closed when she was in college and their official position was that they would mail a cashier's check to the address on the account within 90 days. I'd be shocked if anyone in this situation has gotten access to their money within 30 days.
They said they got access in 1 week. That they got their roll in univ revoked in 1 week that happened to have a long weekend is dubious sounding either side - it all happened in 1 week feels tooshort on univ side or 1 week sounds too short on the bank side
They also said elsewhere that this "1 week" revocation of their university enrollment was the end of a long string of them not paying, not purchasing required insurance, etc.
Basically this happened at the worst possible time and by then the university had had enough of them not paying the bill and not following required policies.
> They said they got access in 1 week. That they got their roll in univ revoked in 1 week that happened to have a long weekend is dubious sounding either side
Yeah, I am not believing this story at all.
No University is going to disown you if you are late 1 week. The rest of the story is just as weak.
Sure it wouldn't solve this specific problem faced by this specific person at this specific time. But I'm willing to venture that a lot of people who had similar problems would have been in a much better spot had they had a bundle of cash in a sock drawer or something.
But cash can't be used for lots of things, even though legally it needs to be accepted anywhere. I can't imagine it would be easy to pay your $6,000 school tuition with a stack of $20 bills. You might be able to get a hotel room if you paid a hefty deposit on top of what the room actually cost, but you'd be just as likely to run into some 20 year old desk agent who can't be bothered to find the form for that, if it even exists.
We simply should not blindly rely on services like banks. You can invent any other new system, but you will never avoid this to happen. The lesson to be learned here is never let yourself get cornered.
> There is a solution - not sure if everyone's ready to hear it yet: Decentralized finance.
Another good option is to have checking accounts in more than one bank. Whatever triggers bank A to close your account is unlikely to also trigger the same action by bank B. It requires more funds, but you decentralise your finances within the classic financial system.
If something triggers a close of your accounts on multiple banks at the same time, odds are you have much worse problems than access to liquidity.
A big centralized government bank is not somehow going to be magically better than multiple commercial banks. At best it would be equally bad but more likely it will be worse than the dmv and irs put together. Going to the bank will be like doing your taxes. Maybe it would be so bad that it would solve this problem because people would have cash.
Yeah the point of government services like a central bank or a public healthcare option or what have you is that they provide a floor of "this is the worst service/bargain you can possibly get", and then the private sector needs to compete against it (sometimes by dishonestly implying they have a better product when their product is worse, but that's its own can of worms).
For basic necessities to modern life, there needs to be a state provided minimum quantity of access, so that you can't be screwed over by corporations just deciding you aren't profitable enough, or cornering the market and price gouging, etc.
I think the state ought to fund such minimum services, but should under no circumstances be permitted to provide them directly. Quality has a hard time competing with free, especially for the poor. If you can only afford the government free solution and they wrong you, your options for seeking redress will be much more limited than if the government gave you a voucher for a privately provided service.
Much of "Web3" is either a scam or vaporware, that's not really disputed even by cryptocurrency proponents. There also isn't good regulation in most countries currently, in the US for example regulators are dragging their feet, so it's a 'Wild West' type situation like the early internet.
The point is more about banking specifically though, and about taking back control. Grandpa should obviously not swap his life savings for BuzzwordCoin, it's not ready for him. But for someone tech literate like I presume the other user is, holding some emergency funds in a way they have full control could have saved them. Hopefully there will be more integration with the established financial system and easier and safer ways people can move in and out of self custody.
I got a random call from Wells Fargo fraud department
and I refused to give them my information.
Escalated and the supervisor also pretended to not understand my concern.
In fact, they placed a stupid hold.
I went to a bank and the bank manager has to call them back and basically beg these people to remove my holds.
These people in the fraud department don't even deserve to get found in a river.
It should be standard for all banks that if they have a fraud issue, they call you and tell you to call the number on the back of your card, and press 6 or something.
The fraud departments we have are so indistinguishable from actual phishing it’s amazing. They even send you a two factor code and have you read it to them! The text says they’ll never ask for it via phone! Embarrassing.
Worse,
as a customer,
it is almost impossible to reach a specific person at a bank over the phone.
The branch manager who called had to authenticate himself
over the phone (at least he was the one who placed the call)
and waited on hold for over twenty minutes
and even then he didn't talk to a specific person iirc.
The strange thing is the supervisor was clearly on a power trip.
They made me waste hours of my life chasing this nonsense.
I'm surprised we haven't heard more lawsuits about this in notoriously litigious America. I find it hard to believe that "we can ruin you at any time" is a sustainably fair contract term.
I've had surprisingly decent luck with bankruptcy attorneys being willing to do small favors like unfucking these types of disputes (or at least telling you the right incantation and process to do it yourself) for free.
(Maybe it has to do with being used to dealing with clients that literally have no money.)
That only covers the incentive for the lawyer for one isolated case. But since such a lawyer will probably take many such cases (and often against the same banks), we must examine the incentives of such a lawyer more closely. The incentive of such a lawyer is to keep taking such cases, which means it is actually in the lawyer’s interest to deliberately lose some amount of such cases, in order to keep it profitable for the bank to keep debanking customers, thereby ensuring that the lawyer has enough business.
That implies the lawyers act in cahoots to try to influence this much greater body of people/power, over and against their immediate interests. It also implies they're fully crooked. It seems like an extraordinary claim (well, the former).
Lawyers aren't limited to isolated cases. Class actions exist for this exact reason and regularly lead to hundred million dollar+ payouts from banks and other large defendants for harm done to large groups of people.
They will say you agreed to the terms they can close the account for whatever reason, and that receiving the balance within a week is quick enough. I doubt the courts would say otherwise. Lawyers probably won't take this case.
This is a situation where the Invisible Hand of libertarianism was supposed to manifest and gently nudge people to banks with more favorable terms in such numbers that no bank is able to do this and stay profitable.
OTOH I do hope a bank is allowed to go full stop on the brakes if needed. I had my CC blocked 4 times because of fraud detection. All done by the CC company and it never cost me anything but inconvenience.
If the bank would be liable, we all suffer. How much will banks charge if we would be both secured from fraud risks and indemnified from account closure damages? I would think 1% of your cashflow would not be unreasonable.
Also as a merchant I like a pro-active attitude of the bank to deal with fraud. But, more on-topic, bank accounts are definitely more stable than CCs. But they are not immune for seizures and fraud detection.
What an incredible horror story. I so hate the impersonal way in which large institutions deal with individuals. The least they should do is to realize that banking is 'mission critical' and that shutting down an account has an immediate real world effect that can result in any kind of mishap to a person. Very, very nasty, and props to you for not entirely losing your drive over this.
Stupid people is perverse. Banks are generally full of these. They power is barely limited and in the corner cases where they are somehow forced by regulation to compensate victims those compensations are peanuts to them (and in most cases to the victims themselves).
All this idiocy could have been prevented by a communication stating "come here before one week or we will close your account". They simply do not care about people.
This is a tongue-in-cheek sarcastic reply, right? Because the only two cash-less options I'm aware are crypto, which is filled with rug-pulls, scams, and DPR-wannabes, or just having everything in commercial banks which is exactly what got the GP into this position in the first place.
It's not the existence of crime, crime happens in real money, too. It's the complete and utter lack of anything else but crime. Originally, Bitcoin only appealed to 1) geeks who enjoyed the technical details and 2) people who wanted to buy drugs. Then, you got to phase 2, where bolstered by the liquidity provided by the people trading drugs and the unbridled enthusiasm of the geeks, the value went up. Then, The Silk Road got shut down, and the value started to fluctuate wildly, leading to runaway speculation, attracting the "fight club for finance" guys. Those guys marketed crypto to the broader flock of normal people, because they needed bag-holders for their (illegal securities trading) schemes. The influx of people gullible enough to listen to the finance bros provided a pre-filtered pool of people who would make good marks for scams.
The useful applications of crypto are illegal (buying narcotics) and the majority of the ecosystem today is both illegal and completely economically nonproductive.
In phase 1, how is geeks enjoying the technical details illegal? You said "It's the complete and utter lack of anything else but crime".
Regardless of that, you've stated that crypto can be used to buy things. The parent post said "Let's transition to cashless society". Why can crypto not be used?
Sorry to hear, but the bottom line here is to not trusting a single entity. Not having funds split between traditional banks and crypto (exchange + offline wallets) is just asking for problems.
> Soon we will have to stop having sympathy for people who get screwed by the banks as the alternative is just too easy and obvious.
OTOH we did stop having sympathy for people who get screwed by crypto bros as the alternative has been just too easy and obvious for quite a while now.
When something similar happened with an immigrant co-worker in the UK, I quickly picked up a second bank account.
He got stuck for about a week and a half with his money all locked up in an account he couldn't access. It was early enough in the month that rent and bills etc. wasn't an issue, we just ended up helping him out buying food for a few days while he sorted out another account and got an advance on his salary.
I remember the range of excuses and explanations for delays from the bank left us all gobsmacked.
I've considered doing this for some time now. Do you have any sort of link between the two accounts? Maybe not directly, but e.g. are both connected to the same brokerage or anything? Is one online-only or do both have physical locations somewhere?
One is online only (the one I use the most), the other one is a completely different bank with very different objectives and clients plus physical offices everywhere.
Each account can send money to the other via wiring, but that's it.
Saved my ass several times already when I lost my credit cards or other unpleasant situations.
Almost exactly the same story, different country. Long weekend, Friday I'm working on site and go to grab a drink at the shop and my card declines. I go to log into internet banking and I can't. I call them, and the tone goes from friendly to frosty out of nowhere.
Took us a full week to get a cheque (!!) that we could take to another bank to move all of our money there. Thankfully, I had just sold something online for cash and was able to live off that, and let my landlords and billers know that I was in the process of rebanking.
Since then I've made it one of my lifes goal to sabotage any benefits to the bank (Macquarie) since. I've so far denied them about $700k AUD in revenue by ensuring any time I see their name I shoot down the deal or find an alternative provider. Luckily they operate heavily in the commercial space. I'll continue to do whatever I can to hurt them. Fuck you Macquarie.
Thank you for naming the bank. I will make absolutely sure to avoid them and to warn others about them. Having something like that happen can be ruinous.
Sorry this happened to you! I’m glad you managed to eventually pick yourself up after that experience!
Stories like yours highlight how important the freedom to transact is. It’s all fine and dandy until one day suddenly it isn’t and you’re completely fucked.
Thank you for your empathy, it was a very difficult time and i am glad i made it out. Banks have substantial power with the ability to close accounts unexpectedly, we must push for a financial system that minimizes those risks and enhances consumer protection. Situations like this is a clear reminder of how crucial financial freedom and security are.
>I went homeless for 1 week with no food. It was my last semester in university and couldn't pay for tuition because my bank acc was locked, so the university dropped my classes and i was not able to graduate, as failing to stay enrolled (international student) i had to go back to my country.
Aside from the bank's fault, this is a failure of basic society functioning on so many levels.
Dropping you because you couldn't pay for tuition for one week? Having to leave the country because you failed to enroll because of that? Being homeless for a week out of a bureucratic mistake?
Each country's Fed (Bank of England for UK) should provide a very basic free bank accounts to all residents. That would be the baseline from which all private bank would have to compete with. The cost is minimal (OK maybe charge 5USD a year or something).
I don't see any reason why this hasn't happened except that the Fed has been captured by private banks.
What would this organisation do if it finds that you are using this account for money laundering / terrorism financing? Is the suggestion that it should have to get a court order to close your account, or that even then it should leave your account open?
Contrasting the replies to this comment with the replies in all the "cashless society" posts are hilarious.
"Oh I never use cash, cashless transactions take 0.00362 seconds less, so taking the risk that I become homeless is worth it to me." - followed by outrage at discovering that trusting your entire financial life to the whims of a compliance department is a real risk.
At some point, you have to assess your risks and realize that your "convenience" comes at a cost. Why people don't use cash, or at the very least have a few stacks in a safe somewhere, always floors me.
I suspect the reason most people don't have a few stacks somewhere is that the vast majority of people have no savings. 45% according to one survey I saw don't have $1,000 in savings.
Banks have algorithms that can detect when a customer is going through a serious financial difficulty and may become a liability.
I know because it happened to me.
The fact that you became homeless, no food for one week, couldn't graduate because you couldn't pay tuition etc. all point to the same thing. BTW, colleges don't screw you over if you are late paying tuition for just one week. I know that quite well too.
When my bank closed my accounts, I was super annoyed. But I knew why they did it.
I never understood this "Anything goes Term & Conditions" in the US.
Like, can a bank legally put that they can close account without notification in their T&C? Isn't there a regulator that would control these and fine the banks?
The binding arbitration clause (or privatized justice system) is another thing that I can't believe the US population never rebelled against...
Terms and conditions are weird, because by and large (in the US) judges have determined that they don't really let the companies do anything that they wouldn't be allowed to do otherwise (except I guess forced arbitration), but they keep filling them with borderline illegal requirements and litigate them line-by-line when it comes up.
The main thing is any company can start denying you service whenever they want as long as it's not for a protected reason, and then it's up to you to prove in the court of law (or arbitration) that they didn't specifically screw you over in any particular way, which is usually not worth the hassle.
This happened to me a decade ago (not in the US), and I was surprised to find that every bank in the country had similar provisions in place. I'd be surprised if yours doesn't too.
In the country I live in (Brazil) the arbitration clause would go against the Consumer Law that says:
"Are null or void, Contractual clauses relating to the supply of products and services that [...] imply a waiver or provision of rights."
Access to justice being a right, arbitration clauses that forbid the consumer to go to the judiciary system are not valid. They can offer it, but not force it.
I’m sympathetic, I really am, but it’s also surprising to me why people don’t have a backup credit card /bank account (shoot I think you can only buy gas at Costco with a Visa!) - I’m not saying you did anything wrong or shouldn’t be upset, but it’s the financial equivalent of only having a gmail account and then being screwed when some algorithm locks you out of your email. (Doesn’t make it ok, but it is a bit of a foreseeable situation).
It does feel like depository institutions should have to make your funds available the same day via wire/cashiers check/cash if they close your account in this manner.
That's fucked up. I don't know what else to say about it. I've worked with plenty of people in the US on H1B, and I've seen how that process is like bureaucratic blackmail. Your story is a whole different level.
I find it really difficult to believe it was a "one chance" thing. Universities have late enroll, plus appeals processes in place. It's in their interest to get paid in the end.
Not every university operates the same way. My impression in Georgia was that there were just to many students and staff with issues, and just too few staff to take care of those issues. Sometimes at the beginning of the semester it's almost impossible to get hold of graduate advisors, HR, payroll and bursar stuff. Me and my wife were both international students started at different semesters and we didn't have any issues. But then both my cousin and my brother-in-law nearly lost their student visa status. At that time we were there to bail them out. But others may not be as fortunate.
This is absolutely 100% correct, i didn't disclose all the details since it is not relevant to bank account freeze and closure which exacerbated the situation and put me in a place where i cannot do anything. This is some of the other unmentioned instances that made the situation harder.
1) Funds took a while to be in my account, it arrived mid of 1st week of semester.
2) Procedures from the international students office
-- they placed a hold on my account for not buying international students insurance from their provider, which is mandatory, and no you cannot buy the insurance somewhere else. note that this happened after the classes were dropped, it was possible to fix it and keep my enrollment had the bank not closed my banking account.
3) Simply because it was a capstone class (final major related class), the seats get full really fast so after being dropped of the class i was attending it became full, and even after receiving the funds, i paid the tuition, removed the holds, contacted the professors where there was available seats to allow me enrollment (have to have their sign off to enroll past a certain date) they refused to allow me enrollment (2nd week approaching third).
If the bank did not close my account, I would've paid my tuition before the deadline, paid the universities insurance, secured a shelter, wouldn't have my classes dropped.
Regardless, it is a tough experience, it taught me a lot and i came out of it stronger.
OP I'm really sorry this happened to you, I think you just got extremely unlucky. This entire series of events sort of reminds me of the Swiss cheese model (https://en.wikipedia.org/wiki/Swiss_cheese_model). Glad to hear you're doing better now, did you end up contacting your university in order to explain how their policy (among other things) affected you? Your insight might help out the next person who gets extremely unlucky.
Banks hide behind Bank Secrecy Act and other regulations in order to debank people. Chase closed my account, and the reason Chase gave: "Financial institutions have an obligation to know our customers and monitor transactions that flow through our customers' accounts. After careful consideration, we decided to close your account because of unexpected activity on these or another Chase account."
I didn't dispute any transactions, nor did I deposit any fraudulent checks, no check bounces, no overdrafts, no cash deposits, no wires, not an instance of disrespecting any Chase employee either on phone or in person. Yes, I used Zelle often, I deposited checks often. When people complain about debanking, many folks defend these banks, saying that there are good reasons for these banks to close (some transaction, etc).
Banks are heavily regulated, I understand. Regulators want to see a certain number of SAR and CTR filings based on the size of bank. If a bank has 1M accounts, regulators want to see a certain number of SAR/CTR filings, a certain number of account closures; regulators go hard on financial institutions, if the latter don't follow the industry average (#SARs, #CTRs, #closures). This has created a vicious loop: banks use machine-learning/AI to flag accounts; then, back office employees 95% of the time just close these accounts.
Welcome to the new debanking world. Chase and many others also monitor your political activity, social media, protests, etc. If they don't like you, they can close your account by simply stating that "we have an obligation to know our customers; after careful consideration, we decided to close your account". When banks decide to close your checking accounts, beware that they also close your credit cards (esp Chase is notorious for this).
The article demonstrated over and over that in some instances branch managers really did know their customers, and that knowledge was ignored by an algorithm run amuck. Monitoring transactions should not be sufficient to satisfy KYC.
Perhaps this article demonstrates that the largest banks are unable to know their customers and truly act on that information. And, perhaps having those banks engage in self-destructive mass cancelations serves regulators' purposes just fine.
No such thing as "an algorithm run amuck" - more like "another department run amuck". Someone programmed the thing, someone is running it deliberately.
Regulators fined Chase and other big banks for "weak controls". One way to show that these big banks have "strong controls" is to change parameters for these algorithms. Many legitimate transactions fall under structuring, layering, smurfing, laundering. After all, any goal of money laundering is to make their transactions appear "legitimate". Now almost all transactions (except for big businesses and people with few bills and pay stubs) come under scrutiny.
Strong controls = more false positives, more account closures, more SAR reports. That's what regulators want, and politicians don't want to rein on these regulators either by amending laws or by reducing "too much discretion" given to regulators. Of course, those affected by debanking (ordinary citizens and small businesses) don't have that kind of lobbying power to bring any such changes.
Big businesses instead can own small banks in fly over states, and run their transactions through those banks. Maybe, it is time to bank with local credit unions, as the latter allow mobile deposits. Once FedNow takes hold across credit unions, better switch to credit unions.
Another lesson: every one should have at least three checking accounts (one or two big banks; one or two credit unions).
> One way to show that these big banks have "strong controls" is to change parameters for these algorithms
imagine if some bank knowingly facilitated money laubdering, and needed to show they gave strong controls. What eould you do?
Thats right, you would close 10k minor accounts of random schmucks for 'suspicious activity', report 'job done' to the regulator, and continue your corrupt practices
The fundamental problem here is that these regulations are totally useless. Look into the effectiveness of KYC laws -- they're basically zero percent effective.
And the reason for that is that if anybody knew that somebody was engaged in criminal activity, they wouldn't have their bank account closed, they would be arrested and their finances seized by court order. So the bank account closures only happen to people for whom there is not enough evidence to charge them with a crime. In other words, a ton of innocent people.
Conversely, the bank is not a law enforcement agency and has no real way to distinguish between the kind of criminals who know how not to be obvious and the aforementioned totally innocent people, and if anything the practiced criminals are the ones who know how not to trigger the fraud detection algorithms, unlike the innocent people.
So the criminals don't get caught and the government blames the banks for this, but the banks still don't have any good way to know who the criminals actually are, so all they can ever do is round up random innocent people to put on a show of punishing somebody.
The fraud is that law enforcement should be an obligation of the banking system and that fraud needs to be eliminated.
> imagine if some bank knowingly facilitated money laundering
You won't have to imagine very hard, HSBC was caught laundering money, told they had to strengthen their controls, but ultimately all the Justice Department wanted was a small cut of the action in the form of fines and HSBC has been allowed to continue their corrupt practices even after being caught laundering money again and again (in addition to all kinds of other crimes). It seems like as long as they can pay the fines, banks are basically above the law.
One way to prove weak controls is also to show that low-level branch employees have the ability to override AML/KYC flags, and regularly do so. That's not just poor controls, it's demonstrating knowledge of the transactions being suspicious while enabling them anyway.
GP says "monitoring transactions should not be sufficient to satisfy KYC" - of course monitoring transactions is required to satisfy AML, flagging any transactions indicates specific knowledge of them being suspicious, and failing to act in any cases where it was warranted will be used as proof of lax controls, with fines starting in the hundreds of millions.
Isn't this where documentation of actual KYC would come in? "Flagged for reason X; Overridden by local manager - follows 10 lines of CYA justification"? Normally that's good enough for administrations.
The second time it's flagged for reason X+1, include 10 lines from rank 2 manager.
It seemed in these reports that the local manager was surprised. ... But it may be that they were only "suprised", i.e. not about to say that the system did prompt them but they ignored the prompt. Possible. It is also possible that the bank only prompts the local manager if the client has enough estimated net worth or estimated lifetime client business value. The kind of thing that might make sense but wouldn't be disclosed until there is a lawsuit.
All the examples cited in the article were with big banks who are probably the ones most likely to be employing these automated systems and getting pressure from regulators. For the benefit of decentralization and avoidance of CBDC's I am moving my accounts more to the smaller regional banks.
> Maybe, it is time to bank with local credit unions, as the latter allow mobile deposits.
I've never used a credit union and have had access to mobile deposits at everything from large multinational banks to small local ones for well over a decade.
Wrt keeping multiple accounts, what is the benefit of that compared to the overhead of monitoring and managing them? Is it just a contingency? Banks in particular have no real reason to give you your money back or respect your privacy. Why would I put my money in an institution that I can't trust?
Banks send out a cashier check upon closing accounts. I was pointing out some edge cases (last deposited check being the culprit of closure; however, this check was cleared by the payee bank). Contingency is one reason. It also depends on what you use banks for. If it is direct deposit from jobs and paying bills, big banks are okay.
The moment you start use Zelle heavily, one of those zelle recipients is linked with suspicious activity, that's a problem (btw, Zelle is owned by big banks). Banks find so many things suspicious: many check deposits, many zelle transfers, low balances, many cash/money order deposits, asking for cashier checks, wires(both domestic and foreign), any crypto activity, being a public figure, names similar to those on OFAC list, etc. Basically, they want normal customers (4 pay stubs, paying 10 bills a month) or extremely wealthy clients. Otherwise, you don't fit the average profile, and whatever you do is construed as not being legitimate.
In this context, the implied reason is that your still have a bank account if one of the banks decides to close or freeze your account. If you can do without an account altogether (how??), good for you, I guess.
>No such thing as "an algorithm run amuck" - more like "another department run amuck". Someone programmed the thing, someone is running it deliberately.
Not to defend banks, but you know how many bugs the average large software system has?
With such a critical activity that has the potential to destroy lives, "a bug" is not a good enough excuse. Hire a human to override the bug driven decision. These aren't bugs but conscious decisions taken by each bank because the fallout is on few enough customers that they don't need to worry. I've worked with/in enough banks to know someone intentionally drew a line and everyone who happens to fall under it can just suck it up.
You're not wrong. Chase has 18.5 million checking accounts and 25 million debit cards, so they can afford to lose a whole lot of small customers while still saving a bunch of money with the automation.
That’s the danger with the size of these things. With 18.5 million customers, they could literally murder a couple dozen a year and it’d be hardly noticeable.
I'm not arguing that the system must not have bugs, really - you are right there. I'm arguing that since everyone knows it does, then the system must provide for that. That is, the institution that we are buying the service from needs to be able to sort things out when it happens. Here we have abundant examples where they have no plan to even notice anything. - And that then they should not be surprised when we are desperate to find a better institution that is not THEM.
Or rather two departments being very good boys: these banks claim to have human reviewers. A first level of automatic flagging (with people running that) and a human review that the flagging deserves debanking (with people doing and running that).
The second, human level is off shore and very tough to get clear with even if nothing was truly wrong. Chase once gave me exactly 7 days around the holidays to present a power of attorney, with no way to escalate or just leave the account frozen a little longer. Since that crew is sitting in the other side of the planet and Christmas is meaningless they didn't care. I survived that episode with them but it gave me the heads up to look around.
Why reach for crypto? My strategy would be to have a small emergency fund with a different bank. The risk of being debanked by two independent banks _at the same time_ seems lower than crypto.
> The risk of being debanked by two independent banks _at the same time_ seems lower than crypto.
I use 3 separate banks for this reason. But honestly, the 'reason' for dropping me might be a 3rd party risk assessment that flags something and services all three banks... Or some sort of story or hysteria that could trigger three similar systems.
Using a decent crypto currency with good practice, the biggest threat is me messing something up. And i can put systems in place to minimize this. The only issue is that most things i spend moneys on don't accept crypto and so still need banking services to use crypto. I hope this changes.
I use 5 different banks and have cash. The problem is that with the lame (primarily US driven) overreaching AML nonsense, banks will not take any risks and close whatever they don't make a lot of money on at the first sign of issues. Why would they not. What do you do if multiple/all banks closed your accounts for no reason at all outside that you are too small a fish to put an actual human on to verify the validity of the closure? Is there anything outside crypto and stuffing money and gold in your mattress?
...until they implement a system to automatically corroborate your accounts and close them all at once, which will happen, "because crime". security theater only gets worse over time. but right now you "hackers" can stop this since 99% of transactions can still be done in cash. but you won't because you're all fake.
Lots of discussion in the comments here about how ingrained banks are into our current system. I do honestly see Bitcoin as a way out of that, but at this early stage of it, you'd probably have to get help from someone who is not debanked in order to interact with our heavily banked system. If you are honestly interested in this, take a close look at Strike.
Could you clarify what you find interesting about it?
I skimmed their website and looks like just a lightning wallet. Am I missing some key feature that helps one interact with fiat systems?
I mostly agree with krupan's answer below, but it depends on use-case.
BTC for investment or long-term store of value. BCH, or various other alternatives (Litecoin, XRP, Stellar, cough Nano cough), for making payments. But if you can use the Lightning network, then BTC works for payments as well (arguably - in this space anything and everything is highly arguable).
If you're seriously looking down the track at using cryptocurrency, spend some time playing with small amounts of it to see how it all works. Different coins have different use-cases, and it's very confusing to come from zero knowledge. Also transferring and converting between different coin types can kill you in fees, so keep an eye on that as well.
And in doing your research don't believe what anyone says about anything, especially youtube folks. Find the most likely narratives amongst the jungle of snakes and traps, based on your own experience at detecting bullshit and applying logic.
I'm sorry, but playing with anything other than BTC Bitcoin and lightning is just going to waste your time and resources. I'm sorry, but the last 15 years has taught us that again and again. Definitely do your own research, start with small amounts, but be very, very careful especially with anything not BTC.
Comment feels like a great example of a bitcoin-maxi. An important data point, worth paying strong heed to, but also worth understanding the reasons behind bitcoin-maxi perspectives in order to see where you fit along the scale.
Bitcoin itself has the longest, most proven history. It's the safest house in the least safe neighbourhood. It's also the best performing asset of it's lifetime so far (something like that anyway).
It's use-case has changed since it was created, and there are additional use-cases to which other cryptocurrencies cater, smart contracts being the primary example (which then facilitate a whole other ecosystem of products, of arguable value and utility to humanity).
I'm around 50% bitcoin-maxi, to expose my illogical stance :)
I also have barely a little toe dipped into that particular asset pool, so my opinion isn't necessarily fully formed or well founded.
I was answering the question about how to interact with non-bitcoin users today. That requires trusting some third party. Strike is a good one for making Venmo like payments. The best exchange right now that I have found is Swan.
> How can I pay my bills with bitcoin while being debanked?
Acting as an alternative to krupan's Bitcoin-centric answer:
- There are other crypto rails other than Bitcoin that could be used in its place. USDC & stablecoins in general is going to be the medium-term winners in this space, as more services are set up to help people pay their bills with stablecoins. Here are 2 services that I've found within a few minutes of searching "USDC pay bill":
> > Optimism is an EVM-equivalent Optimistic Rollup chain.
> I’ll be right back, I need to explain this one to grandma.
Term by term:
- EVM-equivalent: The Ethereum Virtual Machine (EVM) is the part that allows smart contract code can be run on the network. EVM-equivalency means that you can just drop in your smart contract code, and it has to run as it would on Ethereum itself.
- Optimistic Rollup: A Rollup is the current consensus for scaling up the network, by outsourcing compute to other networks, and pushing the important end state back into Ethereum. Optimistic rollups do this by assuming that there'll be at least 1 person to challenge a proposed block whenever that block's invalid. This setup however has the shortcoming of needing there to be a challenge window for other participants in the network to have time to respond.
Just as an FYI, USDC & stablecoins (and CBDC's) are centralised and the same abuse of power is possible here too. Obviously being debanked in fiat and crypto at the same time is extremely unlikely...but possible if someone is REALLY out to get you.
> Just as an FYI, USDC & stablecoins (and CBDC's) are centralised and the same abuse of power is possible here too.
It's the unfortunate consequence of one gigantic unaddressable problem:
USD can only be minted efficiently by the Fed.
- Collateralized stablecoins exist, but they're inefficient in that they must be overcollateralized to cushion against falling asset values.
- USDC & their kind are efficient, but at the cost of being centralization vectors as a result of current US legislation
- An efficient synthetic stablecoin can exist, but it requires deep liquidity in the marketplace to keep the peg stable. (Probably > $100B at the ready to absorb panic sells) Synthetic stocks are the closest analogy available for this, but applied upon a currency. The chicken-and-egg means that bootstrapping something like this is not feasible at small scales: It needs to be big from the get go.
You can't. Every US Dollar touch point is heavily regulated. Back in the day Local Bitcoins was the way to convert crypto to cash but now its highly regulated and they implemented enhanced anti money laundering controls.
Ethereum trumps bitcoin in pretty much every metric except for market cap, which is lagging because bitcoin has the name brand, simpler for people to understand, and misinformation spread by bitcoin maxis and competing chains
How about metrics like answering the question of, "how much of the coin exists?" Or metrics like, "how understandable and simple is the overall protocol and mining scheme?" Or "has this chain ever broken it's own rules and rolled back transactions at the behest of its benevolent dictator?"
Spoiler: Bitcoin wins on all of those. The market cap is better for a reason.
>"has this chain ever broken it's own rules and rolled back transactions at the behest of its benevolent dictator?"
Bitcoin has also done this.
You're referring to the $50m DAO smart contract bug (or "hack") early in 2016, when Ethereum had been running for about a year. The Ethereum blockchain was swiftly rolled back. This was achieved by the majority of Ethereum developers agreeing to create an update to Ethereum software that reversed the hackers transactions specifically, and the great majority of users and miners agreeing to use that updated software. The people behind the DAO were closely connected to the Ethereum developers. Some of them were Ethereum developers. Some of the people who lost money in the DAO were Ethereum developers.
What you're unaware of apparently, is that when Bitcoin had been running for about a year, in 2010, a bug allowed someone to create 184 billion Bitcoins. This effectively made everybody's Bitcoins worthless (or even more worthless!). This event was ALSO swiftly rolled back, just like the Ethereum DAO event, by the same consensus process that I described above.
"Core developers Gavin Andresen and Satoshi Nakamoto were on the case, and the 184 billion BTC transaction was purged from block 74638."
Since then, there have been various incidents involving Ethereum and Bitcoin and hacks or smart contract bugs that caused losses of millions or billions. But neither currency has ever done a roll back of this nature again.
For instance. A year or so after Ethereum's DAO debacle, there was another similar event, the Parity bug, which accidentally locked $230m in a smart contract, permanently. The people operating Parity were closely connected to the Ethereum developers, some of them were Ethereum developers. But this time, although the victims pleaded for a roll back, it was never seriously considered.
> But neither currency has ever done a roll back of this nature again.
Maybe not a rollback, but Ethereum has proven it is malleable time and time again. As one example, compare the issuance of ether to Bitcoin. Eth's issuance is a dog's breakfast, indicative of changing opinions by those who call the shots... just like a central bank.
Bitcoin's issuance? Predictable and steady as a rock for 15 years.
Another example is replacing Proof-of-Work with Proof-of-Stake. A core part of how it works, important for censorship resistance and accessibility, and they removed it for something permissioned that makes censorship far easier.
Bitcoin? Still on PoW and never going to change. If you think it will change, you still don't understand Bitcoin. But never fear, there's already a PoS Bitcoin out there (that no one uses).
I don't know why you're replying to my comment, because I wasn't talking about any of those other issues you've said here. I did not confirm or deny them.
I quoted the single issue that I was disputing. I wrote as clearly as possible to only refute one point, about the implication that Bitcoin had never done a roll back.
If you want to talk about all those other things, then make a separate thread or post,. Please don't use my comment as a vehicle for your arguments, because it's confusing and few people will understand what you're talking about.
Thanks for pointing that out, I didn't know that bit of Bitcoin history. I see a big fundamental difference between that chain fork and the ethereum DAO fork. The bitcoin fork was to fix a bug in the bitcoin source code. Without doing that fork, bitcoin would have died. All bitcoin users would have suffered if the fork had not been done. No bitcoin users complained about it.
The ethereum fork was to fix a bug in a smart contract running on top of ethereum. That bug only affected those who were participating in that smart contract (which was code for an investment scheme that a private organization had dreamed up). Lots of ethereum users complained about it.
Yes, I do see some differences. It's true that the situations were not identical. Thanks for your interesting reply.
One important difference is that the amount of money lost in the DAO was MUCH larger than the amount lost by the Bitcoin bug (the Bitcoin bug simply lost the total value of all valid Bitcoins, which I guess was only about $1m at that time in 2010, with few individuals holding substantial amounts). This meant that not much money was at stake and fewer people were affected, so the roll back was less contentious.
:
But there's a VERY important similarity between the two events: They were both existential threats to the respective currency.
That existential threat to Bitcoin was obvious. As you have just said, Bitcoin would have died if they did not quickly invalidate the 'faked' Bitcoins, because the quantity completely dwarfed the true Bitcoin money supply. So it was clearly the right thing to do.
The existential threat of the DAO bug to Ethereum was less clear. There was also more time to decide what to do, because the stolen funds had not yet been released from the smart contract, (and I recall the money could be stalled in the contract almost indefinitely by white hat hackers iteratively exploiting the same bug that had created the problem.)
But the consensus at the time, very early in Ethereum's life, was that Ethereum might die if 15% of the entire currency was in a state of limbo, or in the hands of a malicious hacker. This was compounded by the reputational damage and loss of confidence caused by such a huge disaster that directly impacted thousands of the most active Ethereum users, not just a few Ethereum developers.
:
I pointed out that some Ethereum developers lost substantial amounts in the DAO, so I can accept that personal financial loss probably also biased the decisions of some of them to approve a roll back.
But I personally don't believe that personal loss suffered by some Ethereum developers was a very significant factor in the decision to do a roll back of the DAO event. To explain my reasoning: That is why I mentioned the Parity bug.
The Parity bug was an even larger loss in financial terms, but it only affected a very small number of people, who mostly were Ethereum developers. The lost money was destroyed, not stolen. It did not affect the wider community, so it was not seen as an existential threat to Ethereum. So there was no question of a roll back.
:
Possibly the quite acrimonious argument over the DAO fix, which was bad enough to cause a semi-viable hard fork (creating the ETC currency), was an additional factor discouraging the developers and community from accepting a roll back to fix the Parity bug and later incidents.
Edit: Like you've mentioned, another difference is that the Bitcoin issue was a bug in Bitcoin itself. The Ethereum issues were coding bugs in smart contracts. I'm just making an observation about that, not claiming that one currency is better than the other.
The bitcoin fork was to fix a broken promise. The bug meant that Bitcoin didn't work as promised, the code fix and fork fixed that.
One of Ethereum's promises around smart contracts was, "code is law." The fork broke that promise by circumventing the smart contract code.
It is good that they have never done that again, but they have been making other big changes to the original Ethereum code not to fix bugs and broken promises, but to change the way it works. That, to me, is a concern.
"Since then, there have been various incidents involving Ethereum and Bitcoin and hacks or smart contract bugs that caused losses of millions or billions"
Sneaky of you to add "Bitcoin" to that sentence, implying that smart contract bugs on Bitcoin, or Bitcoin hacks have cost people millions or billions. That is completely false, but nice try.
Honestly, I'm not trying to be "sneaky". I didn't mean to imply that Bitcoin has suffered from disastrous smart contract bugs like Ethereum has, or that the core Bitcoin or core Ethereum systems had ever been hacked since that time.
The hacks I was talking about were just all the numerous attacks on exchanges and users that have involved BTC or ETH getting stolen.
It's sort of tedious discussing this kind of thing on HN because there will always be some guy who jumps in and says 'Well, ACTUALLY, what about SBF and FTX!!" even though I'm not talking about that. So, I just wanted to admit there had been many other financial losses, to try to avoid all those clever people replying and telling me about MtGox or Tether or something like that, as if I didn't already know about it. Kind of like that other guy who replied to my comment with something mostly irrelevant that he wanted to spout.
I didn't have time to write that all out in such pedantically specific detail - almost nobody is reading this. So, I'm sorry for the misunderstanding that I created. I was not being sneaky. You know: Sometimes, people just don't have time to explain everything in detail.
You seem like someone who is able to see this side of the argument, so thank you again for your comments.
Actually... the account model is much easier to use to get an accurate view of all balances than the UTXO model. As for rollbacks, Bitcoin had one in 2010 (https://en.bitcoin.it/wiki/Value_overflow_incident) and a chain fork in 2013 (https://bitcoin.org/en/alert/2013-03-11-chain-fork) both decided by those who could make the decision... and accepted by a majority of nodes, same as with the ETH hard fork
I'm not so sure about understandability at protocol level, I do believe Ethereum to be straightforward but then again I've followed its progress over the years
Finally looked at both of those bitcoin events that you are attempting to equate to the DAO fork. I commented about the first one elsewhere here. The second one was indeed a chain fork, which is actually a normal and expected event in Bitcoin when miners disagree (for whatever reason) about which blocks are valid or not.
In this case the disagreement happened because of a backwards incompatible change that was accidentally made to the mining software. Nodes running the old software rejected blocks generated by the new software. The bug was fixed and miners happily stopped using the buggy version of code and the chain fork was resolved, just as designed by the Bitcoin protocol. Nodes that never ran the buggy version didn't have to do a thing.
Like my discussion of the other bitcoin fork, this to me looks like an entirely different category of event than the DAO. Bitcoin fixed a broken promise in both cases. Ethereum broke a promise in the DAO fork.
Bitcoin is ever innovating in ways that are safe and transparent, see Taproot that was added fairly recently. Other crypto has proven to be at best run by incompetent folks, at worst straight up scams. Either way you lose with them. Sorry, but that's what the years have taught us.
Well, I would totally disagree. I love safe and transparent but it is just not what gets the job done. I've had to transfer money to people around the world and people have asked to send them dollar-pegged tokens on networks like Tron and Polygon. These are not ideologically sexy networks at all but they have clearly found product-market fit. Metamask (convenience) + low fees + fiat peg (less volatility and easier to understand) and people are all about it. And, whether we like it or not, it works.
Meanwhile I've had the majority of my net worth on Ethereum for over 5 years now and am not really worried about it. And I get user experience that I can never get with bitcoin, like social recovery smart contract wallets.
Safe? Tacking on higher energy-costs through more complexity and increasing pollution across the planet as a result of the increased energy expenditure is safe innovation?
Distributed permissionless databases of any sort are a bust and a scam, period. This was tested and found true in the 70s.
* Efficiency - allowing small scale players to participate in verification and block production.
* Inter-chain communication - some networks are explicitly designed as connected swarms of chains (Cosmos and polkadot for example) and some evolving into that direction outside of the protocol level (Ethereum). How do execute transactions that span the networks is an ongoing research topic.
* Privacy - how to execute transactions in private. How to attest that something is true, say that you have a certain credential, without exposing your account information. Blockchain has been why zero knowledge (and now homo-morphic encryption it seems) cryptography are becoming an active field of research.
* Identity, authentication, account recovery. - these tie into cryptography but generally research on applied cryptography with good UX. For example the first time I've seen social-recovery accounts with any amount of usage (now a feature in Apple accounts) was in a blockchain application.
* Monetary research - far from everybody involved in crypto believes that a fixed-supply rare item makes for good money. "Fiat" money is basically a "token" with governance attached to it. This has lead to a wave of experimentation with other forms of tokens - ones that are algorithmically tied to other assets, ones that are backed by an organization, local currencies, etc.
* Organizational research - since smart contracts can effectively be transparent community banks there's has been a plethora of experiments with building organizations that manage their own treasuries. Horizontalism, organizational transparency and cooperation is something that's been at the core of many crypto projects, the idea being that something cannot be both a reliable public good and controlled by a single party. It's not an easy task, but some cool organizations have come out of this. For an example look at pocket: https://messari.io/report/governor-note-proof-of-participati...
Without a general purpose (i.e. Turing complete) and sufficiently expressive programming language (i.e. providing an idiomatic and expressive manner to build general-purpose logic) associated to the ledger you cannot build scaling technology that inherits the self-custodial, permissionless, and censorship resistance qualities of the underlying ledger. Nor a financial system that inherits those same properties.
If you think about it you are very limited in what you can do. You have an asset that you can self-custody, exchange permissionlessly and without censorship which is good to fight what the original article is about. But you cannot build any financial product on top of it that would have those same properties. Nor be able to scale the transactions per second that the base layer does while keeping those same properties. And I find it very unlikely you can serve the entire world with 7 transactions per second. So yes, there is plenty to innovate on its core function.
> you cannot build scaling technology that inherits the self-custodial, permissionless, and censorship resistance qualities of the underlying ledger
Correct, and yet you seem to still miss the point. There are tradeoffs. You can't scale AND maintain those properties. This is why Bitcoin scales with layer 2 solutions like Lightning (and more ideas like Enigma, Ark, Cashu etc.), or things like RGB or Taro for expressiveness. Separation of concerns.
The best attempts to have their cake and eat it too have failed in crypto.
There is very little innovation to be had in the core function of what a blockchain was designed to achieve. There's plenty of innovation ahead of us for the layers that are built on top of it.
zk-proofs allow you to do so. It's seeing very active development, and yes it involves an L2. The issue you seemed to have ignored is that to be able for the L2s to inherit those properties from the L1, the L1 needs to have sufficient expressiveness to be able to build the proof verifiers. I would love to see how anyone builds such a thing on bitcoin.
Sorry to hear your story/experience. This worries me because my mother, who currently resides in a SE Asian nation, is transferring some of her money to me (in the hope that she can use it when she migrates to the US).
Did Chase let you withdraw the outstanding balance in full when they closed your account? The last thing I want is to see my money being trapped in limbo state...
Yes, they sent me a cashier check for a small balance (around $1000) I left, as Chase gave me 45 days heads up for closure. However, for some people, Chase dragged out until after CFPB complaints are filed.
The case one should worry about these banks is this: you deposit a $500K check, or you got a wire for $500K; check was cleared on the sender's side. Now Chase/Big Bank holds your funds, saying that this check is fraudulent, and that bank closes your account after finding you risky (risky because of this $500k and by looking back at your account history). Now $500K is in Chase's hands, your account is closed by Chase, and Chase doesn't want to give $500K, nor does Chase want to return $500K to the original bank/sender. This is where you should file a complaint with CFPB right away. Without CFPB complaints, the fraud department at Chase, its Bank employees just give you run around for months. File CFPB complaint right away, if any bank holds your funds after 10 business days; don't listen to these employees at all.
CFPB can't force banks to reopen your accounts. Just to get your funds, file a complaint with CFPB right away, and don't trust any bank employee on getting your funds.
I'm very far from dealing with 500k personal banking transactions, but my immediate thought is that if you're doing so you're probably making mistakes. If it's revenue from sale of a company or similar, move it through escrow with your attorney. If it's a legal settlement, do the same. If you don't have an attorney but are dealing with hundreds of thousands of dollars, get an attorney. If it's income from trading or investing it should likely be a transaction from a recognized brokerage which shouldn't raise red flags - and if it's a private investment, see above about an attorney.
And of course if it's business transactions, do it with a business account.
I just gave an example based on what I read on reddit, as I never deposited $500K in my life. I have no problems with banks' closing accounts, as I have accounts with a couple of local credit unions, who are nice to me.
What caused the closure? A legitimate transaction that they find suspicious. Conjunction of two issues--not sending the funds back and closing the account without releasing funds to the customer--is real 'thievery' in my opinion. Since big banks are NOT interested in resolving disputes about funds by lying to customers, better file a complaint with CFPB right away with many details and documents.
One should get an attorney if they desire legal representation, period. Otherwise it's quite perverse to be contributing to one of the main guilds facilitating this cesspool of overregulation, just in the hopes that their social status is going to make a bank think twice. And also attorneys aren't immune from this. In fact, one reason to actually get an attorney is that you want to launder some money.
Also, business accounts aren't immune from this dynamic, as per the article. It seems like you're just grasping at bureaucratic straws here in search of the just world theory. But no, the whole thing is really an accountable terrible dynamic that will continue to get worse and worse until it affects enough people that the laws change.
Lawyers are not of much help when it comes to reopening already-closed accounts. Most of the time, banks will send a cashier check for whatever money left, if they close accounts abruptly. Sometimes, they give a month to move funds elsewhere. When a bank closes an account for that last check which they find suspicious--subsequently cleared by the payee bank, that's when banks give a run around. File a complaint with CFPB without any lawyer, unless of course that amount is substantial.
I agree - you don't need an attorney to file a complaint with the CFPB, and you should file a complaint with the CFPB ASAP when a bank starts pulling this crap. But the comment I was responding to was saying you should have an attorney to handle any large transaction, which I disagree with.
I wouldn't expect them to help with reopening, but if a bank is investigating an unexpected large deposit and determines that "Oh, it's coming from a law firm's escrow account" it gives at least one obvious possible explanation - and may also indicate to investigators that the account holder is someone with legal representation so don't be sloppy.
You obviously can't cold call an attorney and ask for help laundering money. But if you find a money laundering operation through the proper channels, then it will likely involve a law firm somewhere that's facilitating making it properly legible to the system - setting up less-than-truthful companies, generating copious fraudulent documentation, etc. If anything attorneys' trust accounts should be receiving more scrutiny rather than less - using your account to handle money held in trust for someone else is generally something that sets off compliance department alarm bells, and for good reason (well, as good of a reason as there can be in the context of this topic).
When you buy a house an attorney is likely involved, but, in any case, you're going to be transferring the 500k through escrow, not making a direct deposit or wire transfer.
Kind of amazing that doing “aaand it’s gone” with $500k that is provably legitimate is “an issue requiring a complaint to a specialized bureau” and not “a grand larceny charge from the DA.”
If you are moving this much money regularly using these means you will be using a private bank which is a completely different experience. Maybe some people get caught in the transition to wealth before private banking but having moved significant amounts of money a few times, the banks generally do not want to hang onto it against your will.
Glad to hear they gave your money back in full. I'm now really concerned. It sucks that there seems to be no accountability in the system. I get that they want to catch the folks who abuse the banking system, but if they do, they (the government and the banks) should at least set up a proper channel to give reasons and allow folks like us (regular Joe's) to file complaints. The current system seems really ripe for abuse.
> This worries me because my mother, who currently resides in a SE Asian nation, is transferring some of her money to me (in the hope that she can use it when she migrates to the US).
The problem is what you are describing is not exactly legal. You are acting as a money transmitter for your mother; and this might even trigger for you some complex tax obligations.
What you should do is open a Chase bank account for your mother. You already bank with the agency.
Lower degrees of separation from right-wing militant extremist groups. Also tends to be the sorts of folk who vehemently deny structural racism exists and the irony is entirely lost on them.
In a world where several thousand people have just been killed by an internationally funded terrorist group, I think scrutiny on groups which are (a) armed and (b) make political statements is probably justified. And the argument that "Al-Quds Weekend Rifle Club and Prayer Group" isn't allowed while a comparable Christian one is is pure unconstitutional religious discrimination.
>>In a world where several thousand people have just been killed by an internationally funded terrorist group,
Actions that have been widely celebrate by the political segment of the population that often aligns with the gun control movement.
Actions that could have been curbed if the people that were attacked where allowed to defend themselves in stead of reliance on state protection that never came, and Israel is now rolling back many of their gun control provisions rightly so...
>>I think scrutiny on groups which are (a) armed and (b) make political statements is probably justified.
I think scrutiny on groups which are armed and make clear threats of violence are justified. "political" statements is a bridge to far from me, that applies to all religions.
If you are in the US, express the desire to violently "decolonize" the US or chant "from the river to the sea" then maybe you should be investigated. If you are in the US and express the desire lynch a racial group then maybe you should be investigated.
The problem here is in the US today only one of those groups is actually being investigate. The other are free the vandalize monuments, and storm the capital with out punishment of any type where by if the other group even happens to stroll near a government building they put in prison for years.
How about some equality under the law for a change? People claim they want that but in reality they dont
> If you are in the US, express the desire to violently "decolonize" the US or chant "from the river to the sea" then maybe you should be investigated.
The original founding document of Netanyahu’s Likud party:
The moral equivalency you are attempting to draw between those 2 statements is both ignorant and asinine.
When the terrorist organizations chant "From the river to the sea" they are clearly calling for the forced removal (at best) of all Jews from the land.
A political party that calls for "Israeli sovereignty between the Sea and the Jordan" it is clearly a rejection of the "2 state solution" but that is not a call for the removal of an ethnic population from the region. One critical difference here is you can disagree with that political party, vote them out of that government even, and express full support for a 2 state solution with out being raped, or killed. Somehow I doubt Hamas would allow that.
Israeli a western democracy has an actual framework of secular law and a history of respecting the rights of people including Arabs, Gays, Women ect
Hamas is a terrorist organization that has a history of authoritarian control, rape, murder, and no framework for respecting any individual rights at all, you bow to the most draconian interpretation of Islamic law or you die.
People generally don't even understand what the term "free Palestine" means, even without the "From the river to the sea" part. It's not a call for an independent Palestinian state. It's a call for a Palestinian state where Israel stands.
And we all know how that would end for just about all non-Arab Israelis.
> When the terrorist organizations chant "From the river to the sea" they are clearly calling for the forced removal (at best) of all Jews from the land.
Hamas members chanting "from the river to the sea" most certainly have genocidal intent, yes. Saying "from the river to the sea" alone - as the Likud document pretty clearly shows - doesn't make you a Hamas member nor a terrorist. There are a lot of attempts to conflate "Palestinian === Hamas", but that's sleight of hand.
I'm all for wiping out Hamas. I'm quite dubious about the possibility of doing so via armed conflict.
> A political party that calls for "Israeli sovereignty between the Sea and the Jordan" it is clearly a rejection of the "2 state solution" but that is not a call for the removal of an ethnic population from the region.
Maybe, but it's certainly a call for an un-free Palestine.
"Free Palestine",as with other short slogans (see: BLM, Defund), encompasses a range of opinions. Both genocide and the two-state solution fall squarely within it.
>>There are a lot of attempts to conflate "Palestinian === Hamas"
if they did not want to be conflated than perhaps they should have accepted one of the 5 2 state solutions proposed by mutiple parties over the decades.
Contrary to your claims I do not believe Palestinian's desire a 2 state solution in any form, instead they rejected every attempt by the UN, Britain, even the Saudi's then elected Hamas to be their official government when Israel pulled out of Gaza and allowed them to self govern...
Sorry if I press F for Doubt that they want a peaceful co-existence with Israel
It is also telling that no other Muslim nation will accept Palestinian refugees, Not Jordan, not Egypt, not even Iran...
>>Maybe, but it's certainly a call for an un-free Palestine.
Correct, it is signalling that after decades of attempted compromise that maybe a 2 state solution is not really possible. This is setting aside the fact that in reality there was already a 2 state solution where by British Mandate "Palestine" was split in 2, Jordan and Israel. However in the old adage of given in inch take a mile more was demanded...
All offers for peace have been rejected by Palestine not Israel..
Even right now, a cease fire can be easily achieved if Hamas Surrenders Unconditionally, and Free's all hostages... Hell I bet a 2 state solution would even be on the table even after all of that
I bet it would Palestine not Israel that would reject said 2 state solution.
> Contrary to your claims I do not believe Palestinian's desire a 2 state solution in any form, instead they rejected every attempt by the UN, Britain, even the Saudi's then elected Hamas to be their official government when Israel pulled out of Gaza and allowed them to self govern...
"The Palestinian Authority led by Yasser Arafat immediately embraced the initiative. His successor Mahmoud Abbas also supported the plan and officially asked U.S. President Barack Obama to adopt it as part of his Middle East policy. Islamist political party Hamas, the elected government of the Gaza Strip, was deeply divided, with most factions rejecting the plan. The Israeli government under Ariel Sharon rejected the initiative as a "non-starter" because it required Israel to withdraw to pre-June 1967 borders. In 2015, Israeli Prime Minister Benjamin Netanyahu expressed tentative support for the Initiative, but in 2018, he rejected it as a basis for future negotiations with the Palestinians."
> if they did not want to be conflated than perhaps they should have accepted one of the 5 2 state solutions proposed by mutiple parties over the decades.
2002 above was the last concrete proposal. Half of Gaza is under 18; they've never even had the opportunity to do so.
> In a world where several thousand people have just been killed by an internationally funded terrorist group, I think scrutiny on groups which are (a) armed and (b) make political statements is probably justified.
At least in the UK, NatWest debanked Neil Farage's account for his political views. Even its CEO resigned over her lying.
"19 Republican states accuse JPMorgan of closing bank accounts and discriminating against customers due to their religious or political beliefs" [1][3]. Of course, this site is not favorable to conservatives and their views. Some left activists' accounts are closed as well [2].
> At least in the UK, NatWest debanked Neil Farage's account for his political views. Even its CEO resigned over her lying.
No, a subsidiary of NatWest closed Farage's account when he no longer met the investment thresholds for the account he held. The CEO resigned for telling a journalist the above.
They resigned for telling a journalist that because it was a lie.
https://www.reuters.com/business/media-telecom/britains-bbc-...
Britain's BBC has apologised to Nigel Farage over a story it ran on the closure of his accounts at NatWest's (NWG.L) private bank Coutts, which the former Brexit Party leader had said was the result of his political views.
The BBC had previously reported Farage falling below the financial threshold required to be a customer at Coutts - whose website advises its clients should be able to borrow or invest at least 1 million pounds ($1.28 million) with the bank or hold 3 million pounds in savings - was the reason for the closure.But an internal review of the bank account obtained by Farage showed the private bank's wealth reputational risk committee had said his values did not align with the bank's own.
"We acknowledge that the information we reported - that Coutts' decision on Mr Farage's account did not involve considerations about his political views - turned out not to be accurate and have apologised to Mr Farage," the BBC said in the corrections and clarifications section of its website.
You've made a jump from the article - it doesn't say it was a lie, it says that it wasn't accurate to say that Coutts decision didn't involve considerations about his political views. They're not the same thing.
No outlets have retracted the claim that he didn't meet the wealth criteria, and nobody has claimed that Coutts lied about him meeting the threshold. In fact, every outlet that I checked today stil claims he didn't meet the wealth criteria, and that the CEO resigned because she discussed details of a client's account with a journalist, e.g. [0]
No fan of Farage, but then why was most of the document the bank produced about what he did as a politician? Farage also claims he never met these supposed thresholds.
Combination of reputational damage[0] and him being a PEP.
I believe the account closure was a business decision, but they definitely had no reason to be public about it. One good thing came out of the debacle, though: it put the spotlight on UK retail banking regulations and how they are allowed to treat customers in the first place.
Financial institutions don't like small-time PEPs. They don't net the banks anywhere near the money dictators and kleptocrats do, but are just as likely to engage in ongoing bribery due to their position in society.
0: Farage had apparently been very vocal about having an account with Coutts, and waving that thing around as a sign of ... something. For the bank, that was negative brand value.
> In financial regulation, a politically exposed person (PEP) is one who has been entrusted with a prominent public function. A PEP generally presents a higher risk for potential involvement in bribery and corruption by virtue of their position and the influence they may hold. The terms "politically exposed person" and senior foreign political figure are often used interchangeably, particularly in international forums.
Negative brand value is no reason to debank someone, half musicians that do drugs would give their bank a bad name. There must be a legal basis to debank someone.
I don't like Farage's opinions, and being a PEP only means "more eyes on you", doesn't mean "kick them out".
1) Now, if Coutts dropped the ball on something, shame on them. A good lawyer can get some good ££££ for damaging the client's business/etc.
2) If Farage didn't mean a minimum-net-worth.. that's another story.
Farage didn't meet their net worth requirement, which is why his account was closed. A bit like any retail banking product - e.g. HSBC advance, there can be some slack in how strictly the rules are allied. Coutts decided that since he no longer met their net worth requirements, they didn't want to continue to serve him. They may have decided to continue serving other clients whos circumstances changed though for their own reasons.
If farage had met the requirements, none of this would have happened.
That's not what that says. The quote from coutts is even in the HN comment -
> We acknowledge that the information we reported - that Coutts' decision on Mr Farage's account did not involve considerations about his political views - turned out not to be accurate and have apologised to Mr Farage
That does not say that he did meet the net worth requirements. See [0], and read the article. No outlet has retracted the claim that he didn't meet the wealth requirements which is why his account was flagged for review.
I'm a immediate relative of a PEP. And banks treat those just like they treat PEPs.
I've banked in 4 different countries with about 10 banks total, disclosed to them the fact that I'm a PEP or an immediate relative of one, and it has never, ever caused any issue.
The fact that someone with a political opinion had their account closed is not evidence that Chase is monitoring all their customers' political activity and systematically closing accounts for political activity Chase doesn't like.
The same way that Chase closing a restaurant's account is not evidence that Chase is tasting the food in every restaurant and systematically closing accounts for restaurants that cook food that Chase doesn't like.
Good that you trust Chase and other banks with the lame 'evidence' that they provide such as: "Financial institutions have an obligation to know our customers and monitor transactions that flow through our customers' accounts. After careful consideration, we decided to close your account because of unexpected activity on these or another Chase account."
Based on that standard template, I won't trust big banks, because, hiding behind BSA, banks can use the blanket statement "because of unexpected activity". Now you ask me to trust Banks, because they can't show that evidence to me.
None of this is about whether I trust Chase or not.
It's about the big claim that Chase monitors the political activity of their customers and systematically closes the accounts of people with opinions Chase doesn't like.
There's precisely zero evidence that they do this.
Even if one blindly accepts your citations from "The 700 Club" and some random post from "Nitter" as authoritative, even they provide zero evidence for that claim.
Big claims require compelling evidence, and you haven't provided any.
Risk avoidance. Extremists (!) are more likely to have dubios donors. And even if they're "normal" political figures or activists, their behaviour in public might damage the bank.
This being said this approach is a pretty wild one still, since people NEED banks, and there should be long duration till the expiration (except in cases of fraud, money laundering, ..)
Natwest's initial response was what you said: his accounts fell below a certain threshold after he paid off his mortgage. Then Farage sought info from Natwest using "subject access request". In those documents, it is "found that an internal committee had deemed his views did not align with the bank's own. This formed part of the basis for cutting him, the document showed, alongside commercial considerations." [1]
You are incorrect. Natwest was forced to release internal documents about the debanking of Nigel Farage under an FOI request and it is clear from the evidence that he was debanked because of his politics.
"Farage used a subject access request to discover that, despite initial denials by NatWest subsidiary Coutts, his political views had played a part in the closure of his account."
Even if Farange was targeted for his political beliefs, that is independent of whether Chase monitors customers political activites. Farange's politics were a matter of celebrity.
Eh. I can only assume parent is referring to negative media search most financial institutions do as part of their 'know your customer' barrage of acronyms. From that perspective, anything you do that ends up on the internet and is part of a cause, could be considered political and banks do do periodic re-assessments of risk.
You don’t have an ombudsman? Or something like that? Here in India we can even make them sing exact reason for rejecting credit card applications and if they just did it shoddily then they have to actually issue it. They just can’t say “internal policy” or shit like “discretion”.
Same thing in New Zealand. If you can't get something worked out with your bank you complain to the ombudsman and the bank must respond. Sometimes, even the mention of a potential ombudsman complaint is enough to grease the wheels.
In some a case going to the Ombudsman costs the bank regardless of the outcome.
In the UK the first three cases in a year are free, but from the fourth onward the bank has to pay £750 [1]. It doesn't matter the outcome is - the customer could be totally innocent or the next Bernie Madoff - the bank has to pay. A customer saying "I will get the Ombudsman involved" is heard by the bank as "if we don't make this go away right now, we will get charged £750 (plus any compensation the Ombudsman may award)". It does tend to make them sit up and take notice, I hear, presumably because banks get a lot of complaints and so a large bill.
> Regulators want to see a certain number of SAR and CTR filings
I didn't experience that when I was on board of directors.
In my personal affairs I had a checking account force closed because of their auditors - not the regulators. Rumors and myths about enforcement have internal people and contractor (compliance software) going too far. No recourse individually on this behavior.
> If they don't like you, they can close your account by simply stating that "we have an obligation to know our customers; after careful consideration, we decided to close your account".
What's really behind the decision is simply risk avoidance. It's like "firing" bad customers. The banks consider it prudent business to kick anyone who might be a problem out the door. Avoiding one criminal causing issues is worth kicking out 20 ordinary honest customers.
My close friend was scammed via interac and bank closed his account, cards, and he was banned from interac even though he was the one that got scammed. Bitcoin solves that, but Bitcoin has another issue why banks win - if you are scammed with your card - you get your money back or if you forget password - you still have your money, if you are scammed with Bitcoin - you basically lose, if you forget your password - you lose. Just depends on what spectrum you are.
Banned from Interac? They won't let them get a debit card again through any bank/credit union? Or won't let them ever send email money transfers? Won't let them ever receive email money transfers?
(Interac is the Canadian debit card system, owned by a network of banks, which has also branched out into person-to-person money transfers between bank accounts because we don't have Venmo/Zelle/etc here).
> Banks hide behind Bank Secrecy Act and other regulations in order to debank people.
Banks do what the government tells them to do.
They are more than happy to launder drug money, they don't care. You think they close the account of some random person who made too many cash deposits to protect themselves from the customer?
No, they protect themselves from the government who will hit them with massive fines when they "fund terrorism".
> If a bank has 1M accounts, regulators want to see a certain number of SAR/CTR filings, a certain number of account closures; regulators go hard on financial institutions, if the latter don't follow the industry average (#SARs, #CTRs, #closures)
Oh lord, this just asks for gamification.
If there's a multi-million dollar customer and a five thousand dollar customer, who do you reckon they'd rather lose in order to reach their quotas?
Regulators fine big banks for "weak controls". To show that they have "strong controls", they have to show quantitative data. Now, every bank is engaged in one-upmanship. Since we don't have data on the number of account closures, we should look at SAR/CTR statistics provided by FinCen. Every year, SAR numbers go up by 20%; that's because banks fill SARs with "transaction with no apparent economic, business or lawful purpose". Just gamify SAR reports with vague stuff.
Do you have evidence such quotas exist or that banks are competing on SAR numbers? This all seems like wild conjecture if there's nothing to back it up.
https://www.bankersonline.com/ is a place where people working for banks in BSA compliance, hang out. Based on my reading of that forum, there is a push from BSA auditors to file more and more SARs. Also, anon comments like the following from an old NYT article validate what I see publicly on bankersonline dot com. Also look at another poster's comment: https://news.ycombinator.com/item?id=38158017
"Banks are under tremendous pressure by regulators to file a certain amount of SARS (as a ratio of overall transaction activity, which is determined by the regulator - regulators have a secret bogey for each bank). A shortfall from the number expected by the regulators for a bank will result in the bank being penalized by the regulator as having an inadequate BSA program (even if the bank compliance staff reviewed the activity and didn’t find anything worth SAR reporting on). If the bank fights this censure for not filing enough SARs the arbiter of justice is the Administrative Law Judge (ALJ) department of the FDIC or OCC. They rule in favor of the regulators over 99% of the time.) For example California Pacific Bank- a tiny bank serving the Chinese trading community with 200 customers and 500 accounts - was persecuted for more than 5 years for not filing enough SARs, it’s hearing with the ALJ is on YouTube. Even though racist anti Chinese comments by the regulators were unearthed in depositions, the ALJ ruling still went against the bank. Furthermore, banks are required to review ongoing activity of SAR’d customers and file follow up SARs if the “typology” of suspicious activity continues. Bank BSA policies have the requirement that repeat SAR subjects will need to have their accounts closed. Most banks therefore just file SARS on anything that matches a typology and close accounts- that’s just how the BSA regulatory system works.” [1]
Goddam fuck that's depressing. Putting the BS into BSA.
No wonder shit doesn't work the way it should. Reporting on numbers and percentages rather than actual incidences with audit trails leading to shell companies and tax havens and opaque offshore ownership structures.
Because that takes time and effort that meaningless "numbers and percentages" don't require whatsoever.
Automation scaling is the jackboot stamping on the human face.
I feel sacking customers got really popular during Covid and continued after.
Many phone systems have a thinly veiled threat about zero tolerance policies, to treat staff with respect, and in the case of certain government agencies here in the UK, that they will refer cases to the police. The same is repeated on written posters in eg doctors and dentist offices
Just a coincidence I’m sure but I find employees (especially on the phone) even more condescending and unhelpful these days
Earlier, banks used to warn customers at least once for any disrespect towards employees. Now, expect big banks and financial institutions to close accounts without any warning, unless you are a wealthy client. Charles Schwab and Chase do that.
This reminds me of a common scam that casinos pull: if someone gets caught gambling when they weren't allowed to be, the casino will unwind everything if there was a net win, but will leave it stand if there was a net loss.
Yes, they can. At least with credit unions, they can call you for clarifications when they or their system flags your transactions suspicious. With big banks, once they find your transactions suspicious, they will send a notice to close your accounts. No human being can help you.
I'd be curious to know, raincom, did your purchasing history visible to Chase include ammo, firearms, donations to Trump or MAGA politicians, supplies for building an off-grid homestead?
Protip to anybody who wants to spend an extended amount of time overseas - you’re looking at a strong opportunity to join the list of people who have their accounts closed. Red flags include quantity of overseas debit card transactions, setting a PO Box (this one apparently is a very big red flag to banks) or a PMB as your bank address, lots of wire transfers.
Open multiple bank accounts at different banks, use services like wise.com for transfers, and limit your overseas spending with American cards to only a credit card issued with a bank that isn’t the same as your primary accounts.
Yay, patriot act. Glad we have so much energy focusing on legit bankers instead of the crypto that is actually funding multiple US adversaries at this very moment
> Glad we have so much energy focusing on legit bankers instead of the crypto that is actually funding multiple US adversaries at this very moment
Funny you criticize crypto, when it actually solves all the bullshit you're mentioning.
It's so nice knowing for a fact that when I send or receive crypto, it will 100% arrive within moments, unlike the absolute shitfest that is international transfers (like SWIFT).
Crypto today is the only way how you can take control of your own funds.
What use is the money in your Bank account if the ruling political party can label you an ultra-right extremist and retroactively lock all your money down, just because of a single 1$ donation you did to a cause you believed to be right, like Canada did?
> can label you an ultra-right extremist and retroactively lock all your money down
Nitpick: about half the time (on sufficiently long term average), they'll instead label you a ultra-left extremist (most infamously anti-COMINTERN initiatives in the 1930s-1950s, but it tends to wobble back and forth depending on what's politically convenient).
There were a number of reports coming from conservative MPs of this very thing happening. Regardless of the veracity of their claims, the financial systems in place were able and prepared to do this, before the measures were lifted.
> Even a $20 donation to the Freedom Convoy after Feb. 15 could result in the donor’s bank accounts being frozen, a Commons committee heard Tuesday.
I am always surprised how HN folks fall in hook line and sinker for Democratic talking points from senators FAR removed from any understanding of technology and insistent on curbing basic internet freedoms. The previous version of this was the proposal to ban encryption because bad actors can have a private conversation. If you oppose banning encryption but are in support of banning crypto, I would encourage folks to think more deeply about their positions
Genuine observation incoming: I am always surprised how HN folks like yourself fall in hook line and sinker for party line politics, even here.
It's very hard for any layman to gleam even surface level tech info from the news, politicians etc. because any statements from politicians are by definition influenced by lobbyists.
Senator XXXX not understanding (or feigning ignorance) of a tech issue has nothing to do with the color tie the politician is wearing.
Democrats and republican parties are for-profit businesses that aren't a part of our constitution, and are lobbied by the tech industry to lie to you.This is all public information.
Fun fact I love to reiterate: Neither of the major party presidential candidates in 2016 knew how to use a desktop computer IE; windows, keyboard, mouse. But they both have made millions from investing in tech. But they would not know how to make a cursor move in windows 11. That should be a terrifying signal about our politicians and the effect they have on downstream tech-thought.
I can't edit my comment but happy to include Republicans too. The Democrats have been more vocal about Bitcoin lately but agreed they're all part of the lobby machine. I have no love for either party :)
Because HN folks don't want to live in the anarcho-capitalist libertarian dystopia, where whole world "money" is controlled by a few criminals in the offshores, like Zhao, Giancarlo, Sun, Sam, Alex, etc. and by a small mining cartel controlling every transaction consisting mostly of the same people. They don't want to have their transactions blacklisted (like all those "tainted" bitcoins for example) and don't wasn't to be dependent on the centralized exchanges controlled by criminal, on on the decentralized exchanges also controlled by criminals and relying on shitty spaghetti code (just today Uniswap was exploited, but tokenbros don't write about it, interesting right?). They don't want to live a world where every single thing is monetized and rent is extracted forever by a few "early adopters" of said tokens.
Sure, there are problems with banks and goverment overreach, but those need to be fixed, not completely replaced with a worse alternative.
There is no better fix than Bitcoin. Banks and governments will always try to be fiscally irresponsible by removing a gold standard even if it were brought back. Bitcoin is the easiest way to impose rules on the system. Let me know what you think is a better alternative
The technology no, the tradfi companies that "use" it (aka custodial user funds) then yes, but those regulations exist since they're no different than any other financial product company.
For conversations sake I'm curious about specific evidence. It's also fun to consider which country or group of countries would provide the regulations and enforcement.
Ah yes Crypto definitely solves all of the problems. Please ignore the rich men behind the curtains shutting down exchanges and stealing money, the numerous ways people have had crypto stolen from them or how volatile crypto is in general.
Technically, people wishing to use crypto as a bank account would care as much about the exchanges as a ‶normal″ bank customer should care about regulation enforcement on some random bookmaker; both run on [insert currency], but that's about it.
> Funny you criticize crypto [currency], when it actually solves all the bullshit you're mentioning.
Maybe if you're talking about Monero or another currency with the key security property of untraceability. Otherwise it's only a matter of time until cryptocurrency exchanges require documentation about the sources of money, which will likely resemble a parallel blockchain that carries wallet metadata.
I moved from the US to Yemen from 2006-2008. After I got the travel details figured out I realized I would need some way of getting money while I was there. Freaked out for a bit, figured that with the war on terror ongoing it would prove to be incredibly difficult.
Turns out my ATM card worked fine while I was over there. I did let the bank know I would be there and I kept my address in the US though. My card got locked at one point which was a disaster since it was strictly a cash economy. I put the card into an ATM that was apparently being serviced or something. I had to get on Skype (remember Skype?) to call my bank to straighten it out. Once they gave me the go ahead I tried the next day only to be denied again. Turned out Visa wanted to talk to me as well. Thankfully they did not cancel the card, I have no idea how I would have gotten a replacement.
Since I told the bank ahead of time that I was going to be going many places the ATM card worked all over the place: Yemen, Dubai, Qatar, Turkey, Greece, Malta… Everywhere except China lol. Had to use my credit card there.
I got put on a watch list during my time in Saudi and Abu Dhabi. Didnt affect my banking but every plane ticket i got for years had “SSSS”[0] printed/sharpied on it and all my luggage would get a secondary hand-search at every stop immediately pre-boarding both domestically and internationally.
I am just average white US citizen who was working on oil rigs but most likely some of my whatsapp/facebook/iMessage contacts were related to families involved in dissidence against the Saudi government (because the oil region of Saudi is populated by a minority Shia group that is severely underrepresented in governance). Their mosques also had individuals with mental health issues who occasionally try to bomb the mosques in a very, very similar parallel to school shooters back home here in USA.
Ah yes, I was wondering why NYT was reporting on this instead of Breitbart or perhaps Coindesk like you usually see, and it's probably because a bunch of people are about to get debanked for donating to various Palestine-related organizations.
That actually makes sense. I did wonder about the timing of this piece myself. No one cared until now ( even with SARs related to Biden and Trump the process was rarely in spotlight ).
However, this means that something changed with regards to perception of Palestine. My initial thought was that someone too important got banned from Chase.
I've heard when you get an SSSS ticket, you can make up some of the lost time by going to the first class security line. It's not like they're going to send you back to the regular line when it bings and alarms after they scan your ticket.
Heh, yeah. I was "randomly" pulled aside for extra security screenings every flight. To be fair, I later learned that I was going to the same Arabic language school that John Walker Lindh did. I managed to avoid doing what he did though lol.
Protip to anybody dealing with a bureaucracy, no matter whether it's automated or human-based, public or private, fair or oppressive: don't look weird. Bureaucracies function by finding the right category and using the appropriate process for the category. If they can't place you in the right category, you may be in trouble. To avoid that, you can try using products and services that signal the right category, even when they are more expensive and less convenient than the alternatives.
Of course, that doesn't help if you don't just look weird but actually are weird. Spending a lot of time overseas is not weird in itself, because it's common enough. Some specific international situations are weird. Because such situations are rare, it's not cost-effective for the bureaucracy to develop processes for dealing with them fairly.
It's in the PNW and rhymes with Win Far. Started as a teacher's union before opening up to the general public. I did some brief research into their background when I chose them, since I was looking for a no-frills checking account that wouldn't let me overdraft. Essentially just simple, "safe", normal banking or whatever, without fees.
The only catch seems to be that I had to buy a share in the company that I assume they make interest on later. Seems fair enough, and I haven't heard of anyone's account being closed randomly, at least not yet.
Staying overseas, I also got my account locked last month when I invoiced a consulting client. Seemingly out of nowhere because the previous 22 invoices cleared without an issue. But I am properly set up for this. We initiated a refund, and then I invoiced them through another EU business I set up just for this type of scenario. Then I issued a B2B invoice to my business in Europe, from my LLC in Asia; which then paid it out to me as a salary. Fees are steep, but tax is low; so that balances out.
If you're still an American citizen, don't you technically still owe US to taxes on that "salary"? And since you're paying it as salary, I'm not sure that you're able to deduct any of the fees as expenses from what's owed.
The foreign tax credit is provided to prevent the double tax burden when your foreign source income is taxed by both the United States and the foreign country.
You just submit that you already paid taxes on that income to a foreign government and then no additional US taxes (to a limit, I beleive).
It's not that simple. There are a lot more details, but at a minimum you will still need to pay US taxes to the extent that the foreign government taxes at a lower rate. You'll also often still need to pay state income taxes.
The answer depends on how your specific state defines tax residency (for example California is notoriously difficult to escape).
Generally the rules will be something like you remain a tax resident of your old state, regardless of how long you stay abroad, until you establish a new permanent tax residency (whether in a new state or country).
What I eventually did is return to the US, sign a 1 month lease in Florida so I could get a drivers license and register to vote, and then return abroad. According to my tax accountant, that was enough.
Americans abroad shouldn't pay taxes (since they get basically no benefits) or vote (why should those who live abroad affect the laws they are, largely, not subject to?)
Americans abroad get a very valuable guarantee though. If shit hits the fan the full force of the US Military and Government is around to help out. They also are a last resort for Americans in emergencies abroad. Emergency assistance, flights and travel back home, etc.
It's not like we give up everything but leaving the country.
And your citizenship allows you to get visas/dual citizenships that you wouldn't have access to if you weren't an American citizen. An American passport is pretty valuable, even if you don't live in America.
This is all less relevant if you move to, say, the EU, but it's still worth noting.
It's not much of a guarantee when it depends on the administration in charge. Recent debacles come to mind first, but the willingness of the government to help (in particular, with your mention of the military) is extremely variable.
I spent a year traveling in SE Asia circa 2012 and I didn’t have any problems with my bank account. n=1 and all that, and I didn’t have income coming from outside of the US, but I had countless ATM withdrawals and credit card spends.
The only time a compliance officer has been in touch with me was when I was moving money to crypto exchanges.
The big factor is whether you change your address or not.
Keep your US address on there and VPN (though frankly I’ve never needed to for anything other than Charles Schwab) and you often glide through unnoticed.
2023 is very different to 2012. I remember back in the day you can open a paypal account with only an email and receive/send money with it. No kyc required.
Problem because it's not supported or problem due to fraud prevention by amex? I've travelled a lot and never had issues with amex or chase (once I used my chase credit card for the first time in over a year on the opposite side of the world and the transaction was instantly approved).
The compliance officer was following up with me I think because it looked like I was doing structured transactions, back when crypto exchange max ACH was $500/day. I did some explanation of crypto and he was like “so it’s for investment?” and that was it.
I have been residing overseas for the last 6 years, living in and visiting 27 countries in total. I also have 5 bank accounts and 9 cards, all registered to a virtual mail address and a VoiP phone number. No problems so far.
Expanding on your point, when people say 'overseas' they should be more specific. To take an extreme example, spending a bunch of time in France is different than say Somalia.
I had an account in Wise, and I was transferring money between my accounts (all the names were same). Everything was legal but they closed my account and started replying to my emails with huge delays. I provided all the supportive documents for the transactions but they said they will keep the account closed (and according to the user agreement, it seems they can do it without providing the reason). They held significant amount of my money in the account, and it took a long time to withdraw it.
Also, if you get flagged in one of these services, they usually send your info to similar companies and they either close your account or don't let you create new accounts.
What qualifies as an "extended amount of time overseas"? If you go on a vacation for 6-8 weeks, does that get you in trouble? I would think banks would want to keep big spenders who can afford months-long international travel.
Banks don't really have much choice in the matter. They have been deputized to enforce federal laws, and given penalties if they don't. To add a cherry on top, the laws are vague and require the bank to investigate, judge, and execute account closures.
That being said, if you know when are are leaveing,.where you are going, and when you will be home, you can often put a vacation note on your account, and then the bank will know you are on vacation. That is what I did when I spent this summer in Japan, using.my bank debit card because it has no foreign transaction fees, the whole time.
The point isn't necessarily to cut money laundering down to zero, it's to add significant cost and effort so it makes the cartels job harder. Every international border isn't airtight either and causes a bunch of hassle for travelers, but we don't throw up our hands and give up the idea of border control.
"... administration has ended the Trump-era Migrant Protection Protocol, a policy that forced asylum-seekers to remain in Mexico as they await their court hearings, and has halted construction on a wall ..."
This is confusing. According to that article twenty miles will be built because present administration is unable to stop it.
"... building up to 20 miles of border wall because he has to. The administration said that it was bound to build this section of new wall because Congress already appropriated the funding to do so in 2019. It had been unsuccessful in convincing Congress to rescind the funding, Mr. Mayorkas said."
Seems other parts will not be built, and materials were sold off already.
A single retail account is of no consequence to a national bank that has tens of millions of customers. It doesn't matter if you're spending $10 or $50,000 a month. They care about you as an individual about as much as Google cares about a single Gmail account. If an algorithm flags you as potential trouble, off you go.
If you want better service, there are two ways. One is to be an ultra high net worth individual. But the threshold for that is pretty high - from what I recall, real private banking nowadays starts around $5M to 10M in assets with a single institution. The term "millionaire" doesn't mean as much as it did in the 1990s.
The other option is to go with a small local bank or a credit union. If you're in a CU with 10,000 members, it's a lot easier to resolve problems or discuss unique circumstances.
For pseudo private banking, HSBC Premier is decent if you travel often to Europe or Asia. They are basically Wise for HNWs with a dash of money laundering thrown in.
high net worth New Zealanders from a diverse range of backgrounds. Typically our clients have at least $1.5 million to invest, or significant lending with a personal annual income of $400,000 or more. *Additional income criteria may apply
Looks like they have a $50 monthly account maintenance fee, unless you have $75k on deposit, a qualifying mortgage, or $5k in monthly direct deposit. I guess the latter is the easiest, but this is significantly more onerous than any bank I've looked at.
You get priority support for telephone banking and you get a dedicated account manager (not sure if it's a fully accredited banker). You are automatically classified as one of the highest tiered customers for them and can get preferred rates etc. on many other services. Aside from HNW individuals, they also traditionally cater to "expats", which is a fancy British word for high income white collar professionals/digital nomads who either travel frequently or have foreign residencies for business. Your Premier status is global; you can easily create accounts at overseas branches with the same Premier privileges and (possibly credit history transfer too) and fund transfers between accounts are free, though I believe their conversion rates are not necessarily as competitive as a proper brokerage like Interactive Brokers. HSBC's premier service has been around long before the likes of Transferwise.
HSBC operates a bit like a franchise, each country's branch has to abide by domestic regulations but internally customers with Premier status are basically VIPs and get expedited during account opening at overseas branches. If I remember correctly, they generally take into account all of your assets with the bank including e.g. loans and mortgages etc. when banking. They don't only look at your cash assets when conferring Premier status. So if you have a house or car loan with them you can easily attain Premier.
> they also traditionally cater to "expats", which is a fancy British word for high income white collar professionals/digital nomads who either travel frequently or have foreign residencies for business.
"Expats" is also used for elderly retirees moving to the Costa Del Sol, so IME it's not a particularly high-income or white-collar term.
Now, if you were talking about "non-doms" that would be a different matter :)
Of course, I agree that a bank accustomed to dealing with expatriates would probably be understanding of someone spending a lot of time in another country.
"non-doms" are rich foreigners in England (and the very rare Englishman who hasnt yet had the taxman rule on their attempt to pretend they are no longer English), immigrants are poor/average foreigners in England.
Expats are all English when they are outside the UK - be they retired in Spain or living / working in Dubai / Asia / Australia.
I travel overseas a lot to Europe and Asia anywhere from a few weeks to almost a year. I VPN, but not always back to the US. I use wise.com. I kept my US address.
I’ve had zero problems. I think we’re all getting excited about anecdotes.
Indeed. As someone who lived overseas I knew plenty of people who maintained US accounts and US credit cards. The only time an issue ever came up is if they told the bank they no longer lived in the US. Then boom account closure.
There should be more enforcement on dubious banking transactions, numerous Australian banks have had some big fines because they were literally facilitating money laundering on cartel-scale amounts of money for years. Makes me cringe when they crack down on a Joe Nobody who's obviously not, at even a quick glance, some kind of mule / druglord.
By crypto I'm assuming you mean USD.
Not only USD, but actual US weapons in the hands of US adversaries.
Patriot Act expired, no? Also, I've stayed abroad for a year or more and I just swapped the address to a friend's home. Kept my Google Fi, etc. and used my credit cards all internationally alone. I think I visited the US like once in a year and it was fine for the rest of the time. I lost my phone and actually activated my Google Fi SIM from abroad too (needed to use a Wireguard tunnel to the US).
That started only recently, around 2020ish. If you don't use the data (basic plan) and access your sms and vms via a web page using a VPN, you are ok (first hand experience, expat in EU)
>Yay, patriot act. Glad we have so much energy focusing on legit bankers instead of the crypto that is actually funding multiple US adversaries at this very moment
I have never in my life seen someone identity a problem and then blame the solution this quickly.
Last I heard, wise.com is outright stealing people's money now.
Otherwise, this is a good heads-up. Banking for expats can be tricky; a lot of US financial institutions don't want to service customers who live overseas, and will automatically cancel your account if they find out you don't live in the US.
The US is looking more and more like the old Soviet Union, where people weren't allowed to leave. Even China doesn't have this problem; there are tons of Chinese expats living in democratic nations, and they don't have problems like this.
Really? Wise has been reliable for a long time and they've improved the partners they work with in the last year to get much faster transfer times. I've sent around 15-20k usd with wise
Sending money through them still seems to be OK, mostly. But holding funds -and similarly to the Chase stories in this post- seems to be risky business, if you don't fit a cookie cutter model of a business (for whatever Wise's definition of that is). Ironically if you're using Wise, you probably aren't a cookie cutter business in the first place, so I don't know what's going on with them.
Anecdotally it definitely also seems to be related if you deal with the third world much, as the linked OP below and myself are. Luckily the worst I've come across is arbitrary extra KYC popping up exactly as I'm needing to do time-sensitive transfers.
I exclusively use Wise for dealing with the third world. I never keep a balance there, just instant transfers, as I don’t trust any pseudo banks like paypal to not freeze accounts for no reason.
Wise was reliable and cheap up until October when they cancelled all the business debit cards and changed all business account/ routing numbers, both with a 2 day heads up. There’s no way to pay any of the bills that require debit/credit cards, so I just had to get a brick and mortar account. Wise said they’re “working hard” on getting to issuing new debit cards, but can’t give any sort of timeline.
I’ve moved the majority of my money out since it feels like they might fold soon, there’s just a lot of things on autopay with that account so it’s kind of a hassle to move everything off.
The bullshit you had to go through is the reason why a lot of people believe in bitcoin even if communities like NN love to pretend there is no use case for crypto.
Crypto has been a scam from the beginning, the only thing that's changed is the public perception after NFTs bombed massively and crypto was once again left without any use case.
Depends on where you live, if you live in Zimbabwe suddenly it starts to look very attractive. Too many countries play fast and loose with their currency.
Hey you dumb fuck, try living in a third world country and you'll find the use case real fast. Actually, you'll find out either way beause USA will collapse soon.
> on balance detrimental to society relatively recently
Let's not forget Crypto mining has a not insignificant energy footprint, and is a driver of climate change. Really, detrimental to society from the get-go.
Debanking is deeply unfair but more so in our society that is moving increasingly towards a cash-less society. A person can be debanked for no fault of their own and that causes them to be unable to pay rent, bills, etc. Like being arrested - there is little recourse without great expense or effort.
There's a very obvious utility in the US which should be able to prevent this: The US Postal Service.
It's federally required to exist, and services all Americans already. Basic banking services should be one of the things it is expanded to provide in a minimal, safe fashion (i.e. no loans or lending, but guaranteed electronic banking and funds transfer services).
Post office should offer free services for receiving and holding mail for up to 30 days. Not necessarily a P.O. box, as there's limited space for that, but something they can get for you during business hours. Would significantly help the homeless and van-lifers.
Exactly, that's a non-starter for a whole pile of essential services. Which makes homelessness very easy to fall into but extremely hard to work your way back out of.
New Zealand Post wants to shut its last 79 shops, but will not say when the last branch will close its doors
New Zealand Post said the move from stand-alone stores was old news and 801 of its 880 stores were already franchised.
Franchised means the branch has closed as a dedicated Post Office.
Kiwibank originally had branches at the Post Offices.
Kiwibank is left with much less branches than there were Post Offices - branches often replaced by ATMs in the wall: it has "325 Kiwibank Limited Branch and ATM Locations" https://kiwibank.banklocationmaps.co.nz/en/nzl
I presume it will take much longer in the USA for the Post Offices to close. There is no reason something similar won't happen there - the same economic forces occur in the USA.
Note that most franchises are an in-store counter or small area set aside for the Post Office supplies. I can think of franchises in book-stores, stationery shops, pharmacies, and even a public library. I know of one Post Office branch of that 79 that remains open, however it is mostly run by unpaid volunteers including a friend of mine (no banking counter).
In New Zealand the bank that provides government departments with banking is required to provide "banking of last resort" facilities to people, even going so far as people who have (for example) done bank fraud. The facilities are minimal - no overdrafts or credit cards, obviously! - but provide enough to function in a society where cheques don't exist and cash is rarely used.
Canada has a funny approach: banks can pretty much close an account willy-nilly but they're also required to open up a basic bank account to anyone that can properly prove their identity. Not sure how far anyone has pushed that envelope.
> guaranteed electronic banking and funds transfer services
That alone exceeds the requirement of “minimal” as there’s now a need to hire staff for fraud monitoring, handle disputed transactions, chase fraudulent transfers, deal with those who forgot their passwords to electronic banking, had their passwords stolen, etc.
What are the new revenue channels that will pay for all that extra staff (and considering it’s USPS, their pensions)?
>What are the new revenue channels that will pay for all that extra staff (and considering it’s USPS, their pensions)?
The federal government, unlike most other entities, does not need to match new revenue to new spending. It can and does create new money for any spending it deems worth it.
Funding basic banking for all through the USPS is worth it.
Well, the usual answer should be boring old taxes, not inflation, if you want to finance something that user fees don't cover. Just like it's done for nearly every other government programme?
Today's inflation was caused by greedy market forces, collusion, and government loan fraud, by those same capitalists.
Government spending on useful services, or helping their constituents get by on two one-time $600 payments did not create the current economic climate.
So you believe government only ever spends on Useful services? Some how I bet you can point to more than a few things government spends money on you disapprove of and consider to be less than useful
>>helping their constituents get by on two one-time $600 payments did not create the current economic climate.
Nice gas lighting, the reality is the 2 $600 payments make up something on the order of like 1% of covid spending, and I have a problem with all of it. Not just the direct payments.
That said it my be a shock to you that in some ways, to some people, I dont believe the government paid enough, not because I have this false narrative that somehow it is government job to help people "get by" it is not. However it is their responsibility under the 5th and other amendments to the US Constitution to compensate people when they take property. Shutting down the entire economy, barring people from working, and barring people from engaging in "non-essential" commerce should be viewed as a taking and thus require the government to make everyone whole from which they took.
now of course I also believe the government massively over stepped its authority and should have never shut down the economy, and does not have the power to do any of the things it did...
>>collusion, and government loan fraud,
Those are illegal activities, where is your government in prosecuting them? Ohh that is right they do not prosecute crimes anymore I forgot. How is that defund the police movement working out....
I'm gonna step past the conflation and other poor discussion to focus on the part I like in your post.
Things would have gone better if the PPP loan money was spent on keeping the working public solvent. People who weren't allowed to work shouldn't have been forced into unemployment, more or less, without adequate compensation.
But I also see the whole thing as evidence that our viral protocols and our ability to deliver clear, accurate information that won't be politicized, is essentially moot.
If it were rabies that was this airborne, we'd all be dead.
Worth mentioning that they are already involved in the financial anti-fraud business by way of postal money orders, and are already involved in electronic support by way of the very many services they already offer online. Very little of this proposal is entirely new to them.
There is no requirement that the service be revenue-neutral.
Does a car with 4 wheels exceed requirements of minimal? Who operates a payment service without handling fraud? Can you operste a postal service without handling fraud?
> pay for all that extra staff?
Do roads create revenue?
Like you are fee to argue that its not worth it, but government services do not need to charge fees, rhey can create economic growth and get the money back through taxes
> Does a car with 4 wheels exceed requirements of minimal?
I mean, yes? 3 should be enough without too many design changes. 2 with a kick stand. Even 1 with tech that absolutely cannot fail or else catastrophic failure.
I don’t see the connection between the Postal Service and banking. Is it just it was historically there? If that’s the case, you could attach it to any department.
> I don’t see the connection between the Postal Service and banking. Is it just it was historically there? If that’s the case, you could attach it to any department.
Before the FDIC was created to cover bank runs & closures, the USPS was proposed to expand into being a postal savings system, a system that was already done by the UK beforehand & had proven to work.
History not withstanding The reason people talk about the post office is a bank is because it has physical branches in just about every community in the country. More so than any other federal organization, and it is designed to serve all citizens on a frequent basis versus other federal organizations that might deal with citizens on a much less frequent basis.
It used to provide some limited banking services up until the 60s and it still does billions of dollars worth of money orders a year so a lot of the infrastructure is still there.
Many countries have postal savings systems, often very significant. The first was in the UK, 1861.[1] In the US, existed 1911 - 1967, started in the wake of the Panic of 1907.[2] The Japan Post Bank is among the largest savings institutions worldwide.[3] France's La Poste Group website[4] highlights "eliminating banking customer refusal" and provides an extensive suite of services.
The U.S. Constitution, Article 1, Section 8, explicitly gives Congress the power "To establish Post Offices and post Roads." A few lines earlier the same article grants Congress the power "To borrow Money on the credit of the United States." Would it then seem odd for the Congress to be assumed to have the power to create postal bonds, so common in much of the world?
[Addendum]
Might not be such a stretch then to imagine a Postal Savings System or something similar with great reach in the US, potentially encompassing much of what commercial banks handle today. The advantages including stability and availability, and perhaps even efficiency. Perhaps Hyman Minsky might have wished for things to... go postal?
banking does sometimes require actual money still, much more so if you're poorer. What's another institution that has offices everywhere, ships things every day, and privately and securely stores things for huge numbers of customers? Remember, DMVs/RMVs are state-level.
Hell, they're even surprisingly used to keeping large amounts of valuable paper safe. It wasn't that long ago that you could make a lot of money stealing stamp sheets.
> What's another institution that has offices everywhere, ships things every day, [...]
Walmart or 7-11 or so? Jokes aside, giving banking licenses to retailers might be a sensible thing to do. (Or removing the whole system of banks requiring licenses altogether would be even better.)
"At its more than 4,600 in-store MoneyCenters, as well as online, millions of customers have access to basic, low-cost banking services, including the ability to withdraw cash, make deposits, and pay bills."
Funny thing is Finnish Posti (ex. Itella) kinda does it. They have online service where you sometimes get your mail "scanned" before it actually arrives. Probably due to them actually printing it (in better quality somehow?) and delivering to you.
This was and remains an important USP for cryptocurrencies. Security in one's ability to pay for goods and services is incredibly important for any currency. In Canada, the government effectively de-banked hundreds of people and froze their funds for participating in and donating to the trucker protest. As more and more people experience this loss of liberty, the need for free and secure transaction methods will grow. Governments and companies are becoming more oppressive, not less. For this reason, I see cryptocurrencies as inevitable. Eventually cash will be eliminated, and this will only leave cryptocurrencies.
For the record, I am far from a "crypto bro." I understand all of their limitations, including high volatility. I am arguing that their value is quickly growing in relation to their risks.
Indeed. I've sent money to more than one individual over time that had no way of receiving it other than crypto. For instance, when you're homeless or in some third world country crypto may well be your only option (that, and WU but they're outrageously expensive and inconvenient).
>I see cryptocurrencies as inevitable. Eventually cash will be eliminated, and this will only leave cryptocurrencies.
Except, unless cryptocurrencies are tied to some brain implant so you cant lose the keys. There will be a need for a custodian for the average joe's key...and banks 2.0 here we come.
I agree, and I think banks 2.0 are already here: exchanges. Some of them offer credit cards, loans, leverage, investing, and savings accounts already. The catch is that they're largely unregulated, so I see a lot of people opting to keep their cryptocurrency in personal wallets. Like cash, if you lose your wallet, you lose your currency. So people might have a hardware wallet at home in a safe, and one which they top up when they do their shopping each day. In fact, wallets are safer than cash because currency can be retrieved if they're well designed. Bitcoin wallets, for example, merely hold a key to one's funds in the cloud. That key can be shared with multiple devices. Many offer retrieval methods using pass-phrases, which can be stored electronically or printed and kept in a safe or deposit box, for example.
I'm not claiming crypto is better or more convenient today than banks. At least not for most people. My premise is that they will become more valuable over time relative to their risks and limitations.
Do you really think crypto will become the default currency and governments will take no steps to restrict and regulate transactions in exactly the same way they do with cash?
I don't think it will ever become a default currency for modern nations. I think it will be used for parallel economies, which will expand. People will be able to buy more and more goods and services with crypto. Many more services will be set up to facilitate the conversation from USD, for example, to BTC. The scale of these parallel economies will depend on the lengths to which governments attempt to stifle freedoms. As they become more egregious, more and more people will opt to be paid in cryptocurrencies, and shop at places which accept it. There are many ways governments can and will clamp down on cryptocurrencies, but there are even more ways to achieve circumvention.
My job is to help immigrants settle in Germany. This is a serious issue for a lot of immigrants.
The documents they need to open a bank account (plastic residence permit, address registration certificate) are not available to them, sometimes for up to a year.
The ways around it are poorly documented and change often as German banks tighten their KYC requirements.
Everyone here is not seeing the elephant in the room. No country will implement KYC on foreign money. It's free money. Yet, we live in world where pretty much every country requires a residence (and a dozen other documents) to open a bank account except, uhm, the USA.
I find the money transfer system created in Malaysia to be interesting. It started as a transfer system between banks, then an e-wallet that you can use to pay in stores, then they added a Visa card, then they integrated with Singapore, Indonesia and Thailand where you can pay locally with your MYR wallet. Now they added a remittance service that basically acts as a SWIFT transfer (though it looks expensive). It seems like they have found a way around the KYC rules. I wonder how long they can keep at it before they get hammered and if they can increase their Fx integrations to more countries.
When once I was deregistered from an address (Abmeldung), the German bank instantly went apeshit hysterical with "Are you American?" letters. At least half dozen of them ignoring all of my previous responses or feedback. Of course I have nothing to do with US and none of my personal details indicate that I do, I'm fully EU person.
Indeed. US citizens moving to the EU regularly run into the fact that their citizenship makes it much harder to get a bankaccount (and sometimes even impossible). It's probably the biggest driver in people giving up their US citizenship (that and the ridiculous taxation rules).
Some are, some are not. The US tax reporting requirements for their citizens abroad made a lot of banks refuse American customers.
But there are also other requirements that are not related. The most effective workaround at the moment is to choose a EU bank outside of Germany. This skips the requirement for a residence permit or a registered address, so people can land in Germany with a functional bank account.
Another workaround is to rely on branch employees to be a little pragmatic and let immigrants open an account. These exceptions are naturally impossible to document, but they are a normal part of German bureaucracy.
A third and last workaround a symbiotic relationship between a relocation consultant and a bank employee. They expedite the process and in return they get a steady stream of high-income customers.
I didn't get de-banked, but I had a similar wacky experience last year with Wells Fargo. I was buying a car from a guy in Salt Lake City. Not a terribly expensive car. I live in Montana but at the time I was physically in Northern California on a trip. I'd driven to SLC and looked at the car, met the seller, and done various things to ensure I knew his identity (e.g. he used his work email and he had a medium profile media job so was listed on his employers' web site with a picture). (for people in other countries: banks in the US make it impossible for regular people to electronically transfer money to someone else, at least not car-sized sums of money) So I initiated a wire transfer to the guy online. Note: his bank account, the wire destination was also a Wells Fargo account. A few minutes later I receive a call from a lady saying she is from Wells Fargo, asks if I initiated a wire. I say yes I did. She asks do I know the recipient. I say yes, and provide some background on how I know him, and how I know he's not a Nigerian Prince. I also mention that his account is at Wells Faro so if they have any concerns, why not pop open his records and check him out. She says that's all great, thanks, good bye.
<hours elapse> guy emails me asking if I sent the wire because it's not in his account. I say sure did, but let me check if the funds have departed my account.
This is when I discover that WF locked all my online account access. And of course they did not send the wire.
This whole mess took nearly the entire day to resolve and required me to go into a WF branch to prove I was myself. And when I did that the helpful WF manager I worked with ended up exasperated at the WF department that had locked my account. She said they ended up suspecting that she was a bad actor, even though she was calling on an internal line!
This all makes me suspect that in addition to bad ML filtering, banks also have plain moron/assholes working in their fraud departments.
(Yes I got the car eventually and my bank accounts back)
I have two great (bad) fraud stories with TD Bank.
I once had my card declined buying groceries, which ultimately took several hours to unlock. The cause? The $1.25 transaction for the fancy air compressor at the gas station to fill my tires. No biggie, had to re-shop when my card was eventually unlocked a few hours later by their slack-ass fraud department.
The second story, I once had my card declined purchasing groceries and found my account was -$750 dollars or so. An old gym I had cancelled my membership was acquired by another firm, and this new firm apparently thought I was still a member and owed several years worth of $54 a month fees. Now, instead of doing (3 * 12 * 54) in a single transaction, or $54 transactions 36 times they just started hitting my account for $100 in serial, then for some reason switching to $50 in serial, and then $25 in serial until I was comically in the hole. The bank manager was able to freeze and deny further charges from the firm, initiate a fraud complaint, and ultimately had my money back in a week. Thankfully I had some cash in my safe for the duration.
What boggles me is they were unable to interpret a company for which I had never made a prior transaction jackpotting my account as a fraud, but Thank God they stopped my $1.25 tire pressure refill.
Similarly, not de-banked, but I did recently have a payment blocked, with no explanation from my bank other than that the recipient seemed suspicious.
It was a payment made in person to a garage that had just serviced my car, to which I've been going for servicing for ~15 years, for an amount similar to the usual cost.
This was rather worrying as if they'd block that I have no idea what other payments might mysteriously fail (the bank's agent did not seem to understand why this might be a concern).
I had something similar happen here in NL, so it's not limited the USA, unfortunately. I paid a very modest invoice amount - to another HN'er, go figure - and as a result got locked out of my online banking and the transfer was held. Took a couple of late night phone calls to get that restored, and then, - surprise -, the next day my accounts were locked again. More phone calls and since then it's been back to normal but this is so amateurish.
This is not the same. The bank did not kick you out as a customer but just locked you out for your "protection". Or more like their "protection" in case it turns out not to be you and you demand the money back.
I said it's not the same thing, but they did kick me out as a customer, for a day. And it's the same in that it was caused by some irrational actor (people or people who manage software). If they wanted to just prevent me from sending money to a Nigerian Prince, they could have a) only blocked the wire, not locked my multiple personal and business accounts and b) told me I had to perform XYZ additional steps to get the wire unblocked. Instead they silently disabled account access then generated a spiral of BS, exasperation and time wasting, for a day.
The crazy thing to me in all this is that the types and amounts of transactions you make with your money and the bank is not criminal and never could be. It could however be a technique used to hide things that are criminal like fraud or theft. Somehow somewhere along the way we as a society decided we were ok with criminalizing the types of transactions that can be used to hide crime. That to me should have been a clear step in the wrong direction. "Money laundering" (however that is defined) should not be a crime. Theft, fraud, etc. should be.
> Somehow somewhere along the way we as a society decided we were ok with criminalizing the types of transactions that can be used to hide crime. That to me should have been a clear step in the wrong direction.
Totally wrong direction.
> "Money laundering" (however that is defined) should not be a crime. Theft, fraud, etc. should be.
This goes back to this weird fetishism where people think it was oh-so-cool to arrest and convict Al Capone for "not paying taxes" instead of convicting him for his actual crimes.
A society which thinks its cool to send people to jail for tax evasion instead of sending them to jail for organized crime is a failed society.
Prohibition-era USA was, if not failed, at least a failing society. There was by this point pretty widespread public corruption and general lack of respect for the law.
Anyway, wasn't the tax evasion also an actual crime? It's not like you get a pass on the tax evasion because you're also strongly suspected of committing much worse crimes, is it?
> It's not like you get a pass on the tax evasion because you're also strongly suspected of committing much worse crimes, is it?
Tax evasion is what did Al Capone in. Because the bar to prove that he was involved in a lot of seriously criminal activity was quite high, but proving that he committed tax only required proving that he had undeclared income.
This society sends people to jail for tax evasion all the time, even if the original source of their income was non-criminal.
Al Capone was guilty of running a massive criminal organisation responsible for many many crimes (very difficult to prove due to structures of organised crime). He was also guilty of massive tax evasion (a crime carrying serious jail time), because it turns out it's hard to pay the right tax bill when you're trying to hide the income from your massive criminal enterprise.
The Capone tax case wasn't some made up crime to try pin him. He committed serious tax evasion, which would also carry severe penalties if you or I did it at that scale with legitimate income.
> we as a society decided we were ok with criminalizing the types of transactions that can be used to hide crime
I'm not event sure that we, as a society, actually did decide that. When, how? Was there a vote, a referendum? I cannot speak for everyone, but to me it feels like we as a society sure as fuck didn't decide anything. Yes, somebody decided that, but we as a society never were a part of the conversation, really.
We as a society have allowed our elected representatives to pass laws that empowered unelected bureaucrats to write reams of regulations that require banks to do these things, all in the name of "security". It's not going to change unless and until we the people give our elected representatives different incentives.
> The crazy thing to me in all this is that the types and amounts of transactions you make with your money and the bank is not criminal and never could be.
Nothing crazy about it. All those KYCs, checks and check on checks have nothing to do with money laundering or any other sort of illegal activity but it has to do with control over YOUR money.
Notice how extremely regulated the industry is? So multi-billion dollar scam ventures just can't exist under this pressure, right? Multi billion dollar dodgy deals with money laundering? They should have disappeared if my $500 txn gets so much attention, right?
Wrong - it's blossoming. One may ask how - and the answer is on the surface and it has nothing to do with money laundering.
> Somehow somewhere along the way we as a society decided we were ok with criminalizing the types of transactions that can be used to hide crime.
It’s not criminalized. If it were, you’d go to jail instead of just having your account closed.
The real problem is that politicians made banks liable if an account is used for laundering, so naturally banks terminate accounts that look suspicious in order to avoid getting fined.
The way you actually prosecute theft and fraud is by looking at the ledger of transactions to see what happened. Money laundering is any deliberate attempt to make tracing those transactions more difficult. Because it hides the evidence of theft or fraud, we criminalize it the same way we'd criminalize theft or fraud, because it's far easier to prove the cover-up than the actual crime. Furthermore, once you've shown evidence of a cover-up, that creates suspicion to start dissolving privacy to prove the actual crime. Dragnet surveillance is illegal[0], but surveillance with reasonable suspicion is not.
In the counterfactual world where money laundering is explicitly legal, crime becomes far harder to prove, the government is far less useful at stopping crime, and people spend more of their time inventing parallel structures to stop crime that are far less accountable than the government is, until we've sleep-walked into anarchocapitalism.
None of this excuses 'debanking' of course. In the case of debanking, you aren't being accused of the crime of money laundering, the bank just thinks you might be, so they summarily execute your account in the same way that Google executes[1] spammers. The thing you need to be angry about is the weaponization of freedom to associate, and you need to be calling for common carrier regulation rather than legalizing financial crime.
[0] Theoretically, at least - the CIA and NSA have fought tooth and nail to get full take, which is disgusting
[1] Metaphorical, at least until 2035 when Google starts livestreaming executions of known spammers
"Money laundering is any deliberate attempt to make tracing those transactions [ones that prove you committed a crime] more difficult."
But that's not true. If it's not a deliberate attempt to hide fraud/theft but otherwise looks like actual money laundering, then it is still a crime, at least according to current KYC/AML laws. That's the real problem with this all. That's what makes the debanking problem (which you agree is bad) so easily ignored by law makers and law enforcement.
I have a right to privacy, and a right for my actions to be free from government scrutiny until, at the very minimum, they can show probable cause with a search warrant.
Deputizing the banks to spy on me just makes those banks obligated to the same rules.
Money laundering is a crime predicated on the idea that the money I rightfully own is something they should be able to confiscate from me on hypothetical crimes, and they're attempts to seize it often cause people to try to make it less suspicious to the government. It's bizarre.
If they wanted to fight organized crime, the simple way was always to legalize cocaine, meth, and heroin, and sell that shit out of liquor stores in plain retail packages, all manufactured by regulated pharmaceutical companies that would produce it for a fixed, low profit-over-cost, in measured doses and free from unsafe adulterants.
Government causes problems with bad laws, blames the problems on the criminals, then makes more bad laws to punish them for it, causing more problems. As it is now, it's illegal for you to own and possess cash, though they tend to ignore it as long as you don't keep any in tempting amounts (typically less than $1000).
Again, how exactly do you define money laundering? Currently the definition by law seems to be, "anything that could be used to hide criminal activity." In that case, yes, there are plenty of legitimate, non-criminal reasons to make transactions that "could be used" to hide criminal activity. Is privacy a crime?
I'm pretty sure money laundering at least requires intent.
Doing anything to intentionally avoid triggering scrutiny policies is a crime, even if you're not doing anything else wrong.
Unfortunately, we run into the same problems as DMCA where hugely powerful, essential corporations run into poorly crafted laws that don't function at scale, and small users that never did anything wrong get shafted.
For example, I was living and working in Ukraine and without some sort of.. let's call it instruments... I would not have been able to get my money in the clear and legal into the western bank. Because obviously all money earned in Ukraine could only be made criminally, no way a ukrainian programmer could earn some. Must be a criminal.
One western bank even told me in private: "we do understand stealing a train of coal and laundering bribes from Ukraine, this is common and the risk is clear for us; but we have no idea about your IT stuff and things, it scares us".
Of course, it's getting easier today in some ways but good luck exporting any substantial amount of money from Ukraine into the world and in the clear. Practically impossible without some help of money laundering services.
Now I expect to be downvoted to hell because the everyday reality of being from a third-world country is incomprehensible to American people so it must be me in the wrong.
Sounds like a strong danger of applying a modern form of red lining & financial deplatforming. If you’re a higher risk, of course any financial products that you can access will cost more in fees and interest. Who is considered a higher risk by the impersonal algorithms and bank systems being applied?
Its funny how people made a big hoopla about chinese system of black marking individuals to me this seems to be the same. And from the looks of it in China at least prosecutes you or you know why you have the black mark. In the US you get black mark then are not even told why so not even sure what you did wrong just like the US no fly list. The land of the free.
Is it by accident though? Aren't US regulators intentionally (but quietly) pressuring financial institutions to do the enforcement of policies that they know wouldn't stand up to public scrutiny?
look, US politics is a shitshow, regulators are beholden to politics, lobbying is a very big influence in the US. from the crazy anti-porn, anti-abortion, anti-gay/trans, anti-welfare xenophobic fundamentalist anti-anything lobby to the anti-gun, super-duper-pro-trans, militantly-feminist, pro-eat-the-rich lobby.
and during all this banking in the US suffers from all the usual problems, it's 50+ regulatory regimes all in one, banking systems are laughably ambivalent old and legacy plus too new and full of bugs, and so on.
it's not surprising that things are not ideal. there's no need for some extreme conspiracy. big banks are user-hostile. just as the police, as healthcare, and so on.
... it was announced in a public speech on March 20 that year (2013), it was all kinds of bad (very ineffective and probably extralegal, etc)... but it wasn't a secretive conspiracy. (despite what Wikipedia writes.)
this has the same energy as "video games are making us killers", "tabletop RPGs directly lead to Satan (no chance of ever getting back)", "reefer madness, not even once", and so on.
are there negative consequences with regards to women? sure, as with many things.
is it "harmful to women"? oh, yes, maybe we need to put blinders on women and assign a guardian to them to help them avoid this harm!
It's at the least very weird that it's illegal to pay someone for sex unless you pay them to have sex with someone else, record it, and sell the resulting recording.
US banks aren't shitty by accident - how could anyone say such a thing. They deleted millions of mandatory records. They manipulate markets. They fund illegal wars, and people like Epstein. They support dictators and tax dodgers. And that's all just JPM! Look at what GMS have done; look at the Panama papers, look at the 08 bailouts.
Giving banks the benefit of the doubt requires extraordinary, profound naivety.
The most tragic thing about this is that most of the legislators are exactly the same. There's no problem until it happens to them. It's acceptable for "others" to be thought of as drug dealers and other miscreants who don't deserve to have bank accounts.
Reminds me of that D.A. that walked into a bank during the covid masking era and ruminated that they'd locked up people for less. I'm unsure if they changed their tactics or whatever because of this.
Most people are totalitarian in a few ways. Some people hate drugs. Everyone hates crime. The homeless cause social issues. Some people want their religion enforced. Some people hate foreigners.
Most people grant these powers to the government hoping to get their pet peeve taken care of, and are surprised when the government not only doesn't do what they promised, but turn those powers onto its own favorite victims instead.
Totalitarianism means the state has total authority. There’s no such thing as à la carte totalitarianism. How we deal with crime, drugs, religion, homelessness, and assimilation falls under social contract theory.
It's interesting, it really isn't totalitarianism, actually the opposite, in a way that 20th C writers were simply not able to imagine. There is no centralization/dictatorial dynamic for this in the US, at all. It is all decentralized, at best these outcomes fall into the "unintended consequences of regulation" category, which is rather well studied, but in a much more simplified world model than we face today.
>There is no centralization/dictatorial dynamic for this in the US, at all.
You are incredibly incorrect on that assertion. There is, in fact, a centralization/dictatorial dynamic at play, and it's called the Bank Secrecy Act.
Now it doesn't read like it, which most acts of american legislature don't, but on further observation of what it actually does, the intent becomes clear. There is one financial system in the U.S., you will play by it's rules or be excluded, it won't tell you why, it will not be a dumb pipe either. It is directly coupled to law enforcement, and the Federal Government, and yes, there is a Master list that if you get on it, will lock you out of withdrawing from (but not depositing into!) every U.S. bank.
Part of why I no longer do finance work. Once you see how the sausage is made, there is no shower hot enough to slough off the slimey feeling.
> If the bank has filed a SAR, it isn’t legally allowed to tell you, and the federal government prosecutes only a small fraction of the people whom the banks document in their SARs.
Sounds worryingly similar to an effective violation of habeas corpus ?
P.S.: To make the matters worse, it looks that trying to rely more on cash as an insurance against getting debanked, raises your risk of getting debanked !
that's not totalitarianism. it's a shitty system with a ridiculously bad trade off (catching some money launderers versus fucking innocent customers)
the problem is that banks can't handle this requirement well. if they think something is suspicious, sure file the SAR/CTR, and then if they think there's a need for KYC, tell the customer that. the customer provides information about the transaction, the bank then can chill the fuck out. if this keeps going on they can eventually tell the customer that okay, it's too much work for them, please close the account in 1 month.
but no, they immediately switch into this crusader mode, because it's just easier for them, and customers have no recourse.
At minimum, there needs to be a law that requires banks to identify to the customer the specific transactions that led to the closing of the account. And if there’s no prosecution related to these transactions after a year, the ban gets lifted.
Innocent until proven guilty, not guilt until proven innocent.
Being de-platformed from financial infrastructure is tantamount to being economically jailed and instantly forced into life altering poverty. This isn’t some silly app you’re getting banned from…
Banks shouldn’t be allowed to ban anyone. They should need a court order to lock up/ban someone from access/mobility of their own property.
That said, this is likely a narrow lens statement. The problem is more complex around governments/judicial systems incentivizing banks to behave like governments. In reality, our regulatory agencies need to do their jobs: regulate/enforce and be held accountable when they don’t (instead of passing that enforcement on to banks through threat of liability).
This gets pretty tricky - telling a bank they need to keep dealing with customers that cost them tons of money and are actively trying to defraud them (and other customers) seems awfully harsh.
I think the government should provide a basic bank account to anyone who wants one though.
> telling a bank they need to keep dealing with customers that cost them tons of money and are actively trying to defraud them (and other customers) seems awfully harsh.
So, the legal system? The only reason regulated banks should be able to deplatform someone is if they also have a legally actionable case, and they do legally action it, and the person is found guilty.
Ok; can we do the same to your industry? Would you enjoy being required to serve incredibly unprofitable customers until you can (very expensively!) take them to court?
If being banked is so critical (and it is, in modern society) then it shouldn't be handled solely by private enterprise. Government needs to step in and offer basic services.
Banks are a special case. If you are going to apply the “they are just a regular business like my local bar” to them by logical extension any business should be able to create new money and transmit it. Nothing special eh!
Banks have special rules because they are infrastructure. A cafe needs a bank but not vice versa.
I agree, banks should have rules and regulations specific to their industry, just like cafes should industry-specific rules (food handling, tip distribution, etc.).
I don't think "you can't fire a customer" is a good one though.
There's also a distinction between not being able to use a particular bank and not being able to use any bank. It's important that everyone be able to use some bank, but not that everyone can use Chase, but it's tough to regulate that. Again, this is why I see a government option as necessary.
The main issue isn't firing a customer (although it's bad), but locking up their money. It's not like they say "hey, we want to stop doing business with you, please transfer all your money to some other bank within a week or take out your money at the nearest branch", or do they?
Locking up the money is basically theft, but I'm sure the law and regulations say otherwise.
If that would be the case, won't there then be the risk of creating a short-circuit which would benefit the actual money launderers/criminals?
Say, I have 3 millions somehow deposited in the $bank_where_i_put_my_shady_money, I want to take/move the money, but doing so will raise some eyebrows, so I deliberately try to debank myself so that I can get all my money cash OR move it to $partner_bank
Yes, it would be good if we deregulated, so that banking wasn't special.
Private companies should be allowed to print private notes. (Of course, with distinctive designs etc. We don't want anyone fooled into mixing them up.)
This would be a more “old fashioned” monetary system. Problem is people getting ripped off or rugpulled. Especially as there is no gold standard so you would presumably back these by some asset for example this note is worth 1% of our fleet cars or something.
> Especially as there is no gold standard so you would presumably back these by some asset for example this note is worth 1% of our fleet cars or something.
I would expect private issuers in eg the US to denominate their notes in USD. Or if USD were to abolished tomorrow, they would probably denominate in Euro. Failing that, I would expect a return to denomination in gold before denomination in car fleets.
Backing is a different issue. Walmart could denominate their notes in gold, but back them with the strength of their overall balance sheet and operations. Just like banks today denominate the contents of your bank account in USD, but back them with their balance sheets. (And have only a small fraction of their assets in USD reserves at the Fed or vault cash.)
> Problem is people getting ripped off or rugpulled.
Stocks are (in practice, effectively) denominated as fractions of company.
What I am describing is closer to bonds. They are denominated in currency, but still backed by the value of the company.
Bonds (or something equivalent to bonds) are used all the time to pay people. Eg someone who gets paid at the end of the month accrues something like a bond throughout the month. The company owes her more and more of something denominated in currency, not in stocks. At the end of the month, the company redeems that IOU by transferring currency.
Paying people in stocks is much rarer.
Importantly, the base pay of most people from one month to the next is fixed in terms of currency, not in terms of a specific number of stocks.
Banking is, in the United States, by only the dictionary definition a private industry, and their importance and potential negative impact to the daily life of the average citizen puts them in the same category as utility providers and healthcare.
Strawman all you want, but there's a big difference between social media and finance.
In the USA, all of the large banks are part of the Federal Reserve System and the FFIC insures all accounts up to a certain amount. I would say this nullifies their claim to refuse the public as a largely publicly funded institution… the government, however, doesn’t care about the hoi polloi so this situation isn’t likely to ever change.
Postal banking could be an option, but otherwise, the federal government seems to not want to deal with the customer service involved in running a banking operation.
It would probably be more reasonable to make some sort of tightly regulated basic bank account that banks would be required to offer in some situations.
Nobody would be happy, but hold all deposits for a long period, so that they fully clear. Possibly restrict the sources of funds; maybe a basic bank account can only accept payroll and government deposits, maybe a limit of N unique payers per unit time. Etc. Social security and state benefit programs have specialized accounts for people without other bank accounts, because it works better than sending checks in the mail, maybe one of those programs could be slightly more generalized.
Allow a bank to refuse to service an otherwise qualifying basic banking customer only if the bank goes through a court process and/or is accompanied by actual criminal charges filed.
>>>It would probably be more reasonable to make some sort of tightly regulated basic bank account that banks would be required to offer in some situations.
Yeah, I'd be ok with this. Require banks to provide some MVP 'bank account' to anyone that isn't already declared banking-persona-non-grata by the courts.
The government is the prime culprit when it comes to financially de-platforming people, if you want more secure access to banking, the solution is lighter regulation of banks, not more. Anti-money-laundering (AML) and so-called risk management regulations make it unprofitable and complicated to provided a mount services to many people. The government (and its regulatory bodies) use this ‘flexibility’ to achieve their aims (see operation Choke Point).
I’d say “better regulation” rather than “less” - things like fraud and money laundering are important to fight (consider how bad ransomware would be if the attackers didn’t have to convince their victims to make a cryptocurrency transaction first) but we sacrificed due process to get there. It shouldn’t be impossible to have better regulations but the national security ratchet effect is pretty strong, as I’m reminded every time the TSA scrutinizes my sandals.
You assume that the point of regulation is the stated one. I do not think this is a valid assumption. Regulatory capture has occurred consistently throughout US history as has bribery, collusion, and monopoly building (with explicit government support). What makes you believe that regulation would then be helpful in some area when it hasn’t elsewhere?
> The government is the prime culprit when it comes to financially de-platforming people, if you want more secure access to banking, the solution is lighter regulation of banks, not more.
Banks are creatures of government, they're never going to be private competitive businesses. The solution is to recognise this and subject them to the same oversight that government is: FOIA, the equal protection clause, all of that good stuff.
One could argue that mortgages given out sub 2.5% became a problem when the fed funds rate went to 2.5% by mid-June. Additionally, a US deregulation wouldn’t explain house bubbles elsewhere at the same time. The truth is that when interest rates are low, debt is more attractive but when/if rates rise, many borrowers and lenders will suffer. This became especially problematic when Fannie Mae and Freddie Mac were able to compete very strongly with government money and gain massive swaths of the market. The other lenders were then pushed into rather unsafe behavior. Thing is, how do you regulate subprime lending? If the answer is just to refuse the “dirty poors” you’ll eventually have an extremely angry and desperate underclass, hence the creation of Fannie and Freddie in the first place. If you outlaw derivative markets you’ll be outlawing an avenue for legitimate hedging, and you’d end up with even greater consolidation of many markets into the hands of even fewer participants. While deregulation did directly lead to the consolidation of the banking system after the crisis, and certainly didn’t help prevent the crisis, I wouldn’t consider it a primary cause.
Or you need better digital ID systems to reduce risk of fraud?
Example: In the EU all internet transactions require a second factor, it's annoying -- but typing in a credit card number is already crappy UX.
But making identify theft harder could also reduce risk of keeping clients with abnormal patterns. Since the bank will have more confidence that the customer isn't subject to identity theft.
Obviously, there are more options. Maybe, banks should be held more accountable.
But increasing the bar for fraud by having a strong online identity system could probably raise the bar a lot.
The law says the opposite, in fact. If a bank teller reveals to you that you are the subject of an SAR, it could have sever consequences to them, so they're very disincentivized to reveal that there's even been a suspicious transaction, never mind which one it was.
> At minimum, there needs to be a law that requires banks to identify to the customer the specific transactions that led to the closing of the account.
That presumes (and requires) a very specific risk model by the banks.
It is wonderful to hear politicians and the UN speak of our wonderful human rights, but clearly that does not extend to our ability to trade our skills, good and services in a legal manner, in our common currencies.
Now how is that for our much vaunted human rights?
Is anyone going to propose a constitutional amendment that makes banking a human right not subject to the whims and caprices of anonymous secretive unaccountable govt and banking officials?
Of course we could trade in cash, at the risk of having some "law enforcement" officials seizing our cash and asking us to prove we acquired it legally, subject to time wasting and expensive legal process which usually costs more than the amount seized. Habeas corpus doesn't apply to the cash which is why the court cases read State of New York vs $28,777 rather than State of New York vs John Doe.
In the EU some countries have placed limits on the size of payments which can be made in cash.
As for the US one has to wonder why the $10000 deposit notification limit which was made in 1970 has not been adjusted to account for inflation, which according to Google it is about $79,000 in 2023.
Those officials must have been ecstatic at the introduction of computers which makes tracking such transactions so easy.
Anyone to campaign for the adjustment of the $10000 figure to account for inflation? We want to party!!
Think of how it would improve the liquidity of banks. So much money would come flowing in in full knowledge that it wouldn'tbe subject to needless checks from nosy make busy bank and IRS officials.
However wrong the EU is on many things, at least the EU states that having a "basic bank account" is a right in the EU that cannot be denied: "If you are legally resident in an EU country you are entitled to open a "basic payment account". Banks cannot refuse your application for a basic payment account just because you don't live in the country where the bank is established.". [1]
And the European Convention on Human Rights has some implication on banks in the EU, for example when they lend money (say for a mortgage) to an EU citizen.
I'd say that that's better than a country where you can be totally de-banked and blocklisted.
I don't have any false hope but it's at least better than nothing.
I know a few coffee shops that were robbed so they stopped accepting cash. That was a much safer option for employees. But your point is still valid, there just isn't a better alternative right now, sadly.
I am unsure what distinction the linked page is trying to draw between payment for goods/services and debt. The first paragraph seems to unequivocally state that businesses do not need to accept cash (from a Federal law perspective anyway).
There is no federal statute mandating that a private business, a person, or an
organization must accept currency or coins as payment for goods or services.
Private businesses are free to develop their own policies on whether to accept
cash unless there is a state law that says otherwise.
Your own link says that they may decline cash payments.
United States currency is legal for all debts public and private (it says so on the notes), but that doesn't mean it's required to be accepted for all debts.
I imagine if the restaurant staff called the police and claimed you were refusing to pay for your meal, and your defense was “but I offered them cash”, then that would actually be a pretty good defense. It’s hard to imagine the cops siding with the restaurant and arresting you for theft.
So I think you’re right, even though it sounds like a minor distinction.
But a restaurant bill generally isn't going to be a 'debt' in that sense... if they only take credit cards and you don't have one after already eating your food, they're just going to write it off and ban you from the premises.
In my experience, they will direct you to the ATM on premises to get some cash. If you have neither cash nor a card to get cash, the police will be called.
Conversely some restaurants in my city are cash only and I either avoid them or order pickup through delivery apps so they can take a hit on the app comission. I despise using cash.
Capital One used to have a cafe near Boston Commons, although they accepted all card networks. I think it would be pretty neat if they opened coffee shops sponsored by CC companies that only accept their CC customers (e.g. coffee shops that only accept Visa or only accept Amex).
Lloyds bank did this to me. It took three calls over 3 weeks to customer services to get it reversed - each over 30min. I explicitly asked and was told it was half driven by algorithm and half by people. When it reversed I was basically told it was a bug.
My belief is their is some data science team responsible for this. They are ruining people's lives with their false positives. I hope those people read this message and realise what they are doing.
I was lucky. I would've got a marker put against me that could've had every other bank close my account. I only escaped this because of my persistence in calling them and getting lucky with a customer service rep who went the extra mile.
I wanted to add that though the banks are at fault, I believe the cause is government. This is the exact response one would expect with the KYC regulation. If a customer falls into the "to much effort" category (note not "done something illegal") then I assume they would not be worth the cost of researching for the bank.
Yeah. They seem to work for me, too. There was a few weeks where one of my devices got trapped in the loop gp described and it was very frustrating. I am not using Cloudflare DNS.
There is a feud between CloudFlare and the person/people running Archive.is/ph, where they blame each other for X, and people using CloudFlare's DNS gets sent into some redirect loop or something when they try to access the website.
Let's call this what it is: streaks of totalitarianism.
Beyond the specifics of closed bank accounts, what are we are seeing is the following pattern:
- Government pushes regulation on banks to monitor their customers for X, Y, Z
- Banks, on behalf of the government, collect data on individuals for X, Y, Z.
- When banks are not satisfied, they either de-bank their customers or file a report with the government.
Banks, which are supposed to work for their customers, instead end up being coerced to watch their customers on behalf of the government.
Because more and more transactions are digital, the net result if that the government has found a new venue for (totalitarian?) surveillance of almost all economic transactions of their subjects. Back in the day, the KGB would have dreamed of having something like this.
Of course, one needs to live to see how bad it will get, and if people will get more accustomed to holding cash[^1] in a hidden safe.
[^1]: Or a cash equivalent. In certain places, there is talk to make do without any cash at all.
Banks should close accounts for administrative reasons only, with ample notice period, and give full disclosure of the reason. Balance should be made available as soon as possible once the customer present an alternative account, or he should be able to get a check.
For regulatory reasons, only the government should be able to mandate closure and for that it should be backed by a judicial order.
I don't fucking care about idiots mumbling about "muh, terrorism! money laundering", fuck you and your safetyism. We live in a democracy, and nobody should be punished except after a judicial procedure with ample defense rights.
Banks regulatory requirements should stop at making sure they collect all the required information and report suspicious activity to the government. They are not in the business of policing people, investigating, judging and punishing people. They don't have this mandate.
(a) Banks can be vague in their SAR filings with “transaction with no apparent economic, business or lawful purpose”
(b) What BSA manul says: "No bank, and no director, officer, employee, or agent of a bank that reports a suspicious transaction may notify any person involved in the transaction that the transaction has been reported." [1]
This deadly combination is enough for banks to NOT disclose. That's why a vague reason is provided by banks; here is Chase's template: "Financial institutions have an obligation to know our customers and monitor transactions that flow through our customers' accounts. After careful consideration, we decided to close your account because of unexpected activity on these or another Chase account."
Since the first SAR is filled with “transaction with no apparent economic, business or lawful purpose”, subsequent transactions from the same account would become "transactions with no apparent economic, business or lawful purpose". So, Banks are on the hook to file subsequent SARs. Banks exit customers after a couple of SARs in the name of de-risking.
One way to avoid getting out of this trap is to join the club of "private banking" services provided by big banks. It is like Airline's first class vs. economy class customers. Banks put different resources for private banking clients such as: (a) manual override by humans (b) reduce false positives by algorithms by tweaking parameters (c) specialized representatives, cust service folks.
It's the intersection of Kafkaesque social credit by corporations and security theater spilling over from Snowden-revelations of government overreach by ancillary watch lists with millions of names. Have a family member who hangs out with "shady people" or live somewhere a criminal lived, and be guilty by association and discriminated against by algorithm without being aware of it and without any recourse except to waste the target's time and money with layers of bullshit. Such scoring and grading by correlation with arbitrary datapoints and secret evidence determines if a customer is treated well, charged more, or fired. "Know your customer" but entirely lacking in a human in the loop to avert significant automated harm.
Widespread disenfranchisement risks a quiet, at first, socioeconomic apartheid, instability, and more homeless people.
The root cause is the oligopolic concentration of power by too few corporations and regulatory capture leading to little-to-no oversight to civically murder or banish a person arbitrarily.
A number of potential remedies include:
1. Decentralization (credit unions, breaking up corporations that are too big)
2. Regulation (antitrust, consumer protection, and algorithm standards)
3. Public utilities for essential services (postal banking which already occurs partially in the US with money orders)
Closely-related book Three Felonies A Day: How the Feds Target the Innocent by Silverglate.
i worked in the field for seven years and saw some of this firsthand. i was the guy at the desk making the call and relaying the bad news from the back office. it always seemed deeply unfair & quite rich seeing as almost all of these institutions are busted for far more egregious behavior than what they suspect of the customers they de-bank.
one additional scenario that always stuck with me as to how wacky banks can stretch their power: i had a woman who had her own sole-owned accounts, a joint account with her mother, and her mother had her own accounts. the mother had overdrafted her sole account a few hundred dollars, and per the bank agreement, they took money from the joint account & the daughters sole-owned account to offset the balance. she was completely blindsided & distraught once it all became clear as anyone would be. how is that fair? this was in 2015. hopefully things have changed.
Here's what companies are trying to do: replace people with "AI". Why? Because people are annoying. They demand wages, breaks, medical care and so on. Of course what happens to companies when there's no one left being paid to afford their services never enters the picture.
Here's what companies should be doing: using AI to easy the work of their workers.
What's the difference? Well, in this case, closing an account is a serious action. It should always require human review. Mistakes do happen. Bugs happen. So, automated systems should simply allow one person to review many more accounts and/or to require less time to review such actions.
Companies should always be responsible for the consequences of these automated actions including all damages plus punitive damages. Want to know how this can go (and has gone) horribly wrong?
Hertz had an automated system that was falsely reporting rental cars as stolen [1]. People were charged and spent time in jail for this (eg [2]).
This should never happen. Any police report like this should require human review where the human is responsible for the consequences of that. Automated system or not, Hertz made false police reports. That's a crime. Or it should be if it isn't.
We are rapidly heading towards a dystopian future where ordinary life is impossible and nobody knows why because none of these systems explain why you're being imprisoned and your money has been seized.
>Mr. Dubrowski, the JPMorgan Chase spokesman, said the bar’s series of deposits was indeed the problem.
>“We must know our customers and monitor the transactions that flow through our bank,” he said. “That includes instances where we see a pattern of cash deposits that are just below federal currency reporting thresholds.”
Later in the article:
>“We must know our customers and monitor the transactions that flow through our bank,” Mr. Dubrowski said, who stressed that the bank was not accusing Mr. Ladipo of any wrongdoing. “That includes instances where we suspect that the transactions involve parties connected to potential scams.”
I have a crazy idea that might just work. What if we could create something that has the privacy of cash, is uncensorable like cash but could also be digitally transmitted like electronic payments?
Bitcoin, not crypto. And poster has to be cryptic and/or sarcastic because even though it's a solution to this very problem staring us in the face, people here shut down any intelligent conversation about it both with down votes and tired, long winded, oft repeated, uninformed arguments against it. It's pretty discouraging, honestly
Bitcoin absolutely does not have the privacy of cash!
It is cash like in that if you typo the destination address you instantly lose all the money, which is sort of like how you can accidentally set cash on fire.
You shouldn't have intelligent conversations with crypto people any more than any other kind of scammer. They're going to pickpocket you while you do it.
All Bitcoins are trackable on the blockchain, and these days you won't go far before transactions can be connected to an identifiable wallet.
If you've ever said anything like "Donations accepted at $ADDRESS", then everyone can see if anyone ever sent anything, and from there it doesn't take much work to see if you ever spent that money on anything and what else you do with it.
You can obscure things some, but the records are permanent and anything people can figure out stays known. If the authorities are after you, then they can get information from exchanges, which at this point require giving them personal information.
Cash is much more private. It takes much more effort to figure out who you gave your cash to.
This is also transitive: if I get bitcoin from you and two weeks from now the cops show up at my door asking to know why I had a funds related to some crime, I have to convince them that I had no knowledge of the transaction a couple of steps back and even if I do I might find that vendors stop accepting anything in that chain or start buying insurance to protect them. That’s going to sour people on the experience real quickly.
Variations of that show up everywhere: your employer can review your political donations or decide you spend too much money at the local bar, casino, or anywhere else they don’t approve of.
It isn't hard to accept money on an address that is known to be associated with you and then transfer it to an address that is not known (cannot be proven) to be associated with you. An extreme form of this is called coin mixing or coin joining, but for most of us, I would think, that level of address obfuscation will not ever be necessary. Or if it is then you can imagine it will be automated.
Think about what that means: people are expected to maintain multiple accounts, pay people to launder money between accounts, and never make a mistake, or fail to predict what financial activity today will become a problem later (did you donate to Planned Parenthood when Roe was the law of the land? Better figure out how to remove that from the blockchain before your employer transfers your job out of a free state. Oh, wait, it’s not possible - better just hope nobody ever thinks to look!).
Major criminals get caught making mistakes on that kind of thing, there’s no way normal people aren’t going to make mistakes – and that’s before you think about what using a mixer actually means: lighting a neon sign saying “something about this transaction is dodgy, examine it!”
You are overstating how easy it is to track and how hard it is manage multiple addresses. As more addresses are used it gets harder and harder to track. Your employer will not have the resources to do it. Hierarchical wallets make it really easy to use and keep track of multiple addresses today, and more privacy schemes are in progress, see: https://river.com/learn/what-are-schnorr-signatures/
It's true that it is not completely anonymous, but it is a huge improvement over the current system we are discussing here. Add that to the other benefits Bitcoin has and I still feel like it's a huge win.
Here's also a flip side benefit to the public ledger. Businesses can, if they choose, cryptographically prove that they have the funds they say they have. Think of the value of that
> As more addresses are used it gets harder and harder to track. Your employer will not have the resources to do it.
First, following a chain is not as hard as you’re making out and there are existing companies which provide that service, which they’d pay just like they do credit reporting agencies - made easier by the fact that they’d be providing most of your income so it’d be starting with a known point. Mixers can be defeated but simply using one is a red flag.
Second, ordinary people are not going to perfectly follow a complicated setup – it’s not just that they make mistakes, although that’s a certainty, but also that they already aren’t interested in Bitcoin’s higher costs and slower transaction speeds so making those characteristics worse will not increase adoption. “Harder to use, costs more, still less secure than cash!” is not a compelling ad.
> Businesses can, if they choose, cryptographically prove that they have the funds they say they have. Think of the value of that
You mean they can make the same statements which businesses have been making since ancient times? The problem with all of these systems, as FTX customers can attest, is that the hard part isn’t counting what’s in your ledger but dealing with the real world outside – even if you can see all of my Bitcoin, you can’t know whether I have unrevealed debts or am about to be sued, etc. Since businesses run on credit, that means you still need auditors and courts to deal with the parts of the problem which aren’t simplistic enough for a blockchain.
Yes, following the chain of addresses is pretty easy, but proving who owns which address is not.
Using the new tech like Schnorr signatures is not "a complicated setup" that "has to be maintained perfectly." It is (or will be soon) built-in to the wallet software. You won't have to think about it. Maybe you read a lot about early Bitcoin wallets that didn't even provide unique addresses for each transaction (was that ever even a thing?) but times have changed. The ecosystem just gets better and better.
Also, did you read the article I linked to? In another thread I provided some more explanation and links:
All the chain analysis you have heard of is based on likely patterns and typical behavior of address use in common Bitcoin wallet software. New signature and script schemes have been added to Bitcoin in the past several years that disrupt those patterns and make it even harder to find connections between addresses.
On the business transparency, you seem to completely ignore the cryptographic proof businesses can provide, that's not the same statement that businesses have been making since ancient times. It's a mathematical guarantee. All the rest you point out is true though, and so you are right that it's not a total elimination of potential fraud.
> On the business transparency, you seem to completely ignore the cryptographic proof businesses can provide, that's not the same statement that businesses have been making since ancient times. It's a mathematical guarantee.
It’s a mathematical guarantee in the same way that a bank statement is. It’s extremely rare for the problem to be counting things rather than undisclosed debts, embezzlement, etc. and that kind of thing is just as much of a problem for a Bitcoin user because the real world isn’t on the blockchain. If I look at your balance now, that doesn’t mean that you didn’t borrow 90% of that balance from someone else, neglect to mention that you have paid taxes, transfer it the instant after I signed a contract with you, etc. In all of those cases, we end up in a courtroom where a napkin with the CEO’s signature saying “IOU $1,0000,000” and a witness has the same legal weight as the Bitcoin network.
And sorry, I know I should but I can't just let this go. You keep comparing Bitcoin to cash, as if cash is the solution to the unbanking problem we are talking about. You say this about Bitcoin vs. cash:
“Harder to use, costs more, still less secure than cash!”
None of those are absolutely true. For a local transaction in small amounts, yes, cash is easier and cheaper. For large transactions or for transactions with someone who is geographically far away, cash loses on all three of those, big time. I don't even need to explain why do I?
People do track cash by serial number, each and every bill has a unique one. However in practice it doesn't happen a lot. I would think that's because:
- There are a whole lot of bills to keep track of
- The serial numbers are not easily stored and compared with computers (at least not for private individuals)
That second point, bills not being on computers, is why cash isn't the easy answer to the banking problems we are discussing here. You can't pay someone across the country very easily using dollar bills.
With Bitcoin, there actually aren't any bills or tokens with serial numbers attached to them. There are however, as you point out, unique addresses for each transaction. Like the vast number of paper bill serial numbers, there are a lot of possibly Bitcoin addresses. Far, far more than there are paper dollar bills, sands in the sea, and stars in the sky, actually.
It is, however, somewhat possible to track Bitcoin going too and from the addresses because it is all on computers and this is a trade off of Bitcoin being permission-less and not controlled by a single entity that can decide to unbank you, and online so that you can send it to people across the country.
So, as you point out, if someone publicly associates themselves with a Bitcoin address, and if they reuse that address over and over, you can see how much Bitcoin is going into and out of that address, and if the other addresses in these transactions are also known, then you can easily see that Bob sent Alice some Bitcoin. Address reuse and publicly associating yourself with an address was unfortunately common in the early days of Bitcoin, but practically it never never happens anymore. Instead each and every transaction uses a new unique address, and as I said before, there a vast huge number of possible addresses.
As for exchanges, yes, they do have identities associated with Bitcoin addresses. You can easily accept bitcoin from an exchange and then transfer it again to other addresses that have not been publicly associated with you.
Also, hopefully someday exchanges won't be necessary.
> It is, however, somewhat possible to track Bitcoin going too and from the addresses because it is all on computers and this is a trade off of Bitcoin being permission-less and not controlled by a single entity that can decide to unbank you, and online so that you can send it to people across the country.
It's not "somewhat" possible, it's 100% possible because the history is public and permanent. If you make a mistake once in your entire life Chainalysis will see through anything you previously did to obscure a transaction.
There is no personally identifiable information stored in the public ledger. Just addresses, scripts, and Bitcoin amounts. If someone that knows you (like an employer or a Bitcoin exchange) sends you Bitcoin, they will know addresses that you claimed were yours. As soon as the Bitcoin moves from those addresses to another address then the provable link to you is broken.
All the chain analysis you have heard of is based on likely patterns and typical behavior of address use in common Bitcoin wallet software. New signature and script schemes have been added to Bitcoin in the past several years that disrupt those patterns and make it even harder to find connections between addresses.
"Addresses" are personally identifiable information if you're associated with one, or if you use an exchange, which you'd want to because most people providing goods and services (and also your local tax authority) want the local currency.
If you're claiming these upgrades made Bitcoin anonymous in 2021, that's obviously not true, since multiple people who stole billions of dollars of bitcoins from exchanges have been caught with chain analysis since then.
Ok, first off, let's take a step back here. We are discussing a solution to this unbanking problem, but you and I have gotten off into the weeds a little about hiding actual criminal activity. Bitcoin is not 100% private, but it did take 10 years and this guy inviting the police into his home where they found his physical bitcoin wallets in order for him to get caught. That only supports the point I'm making that Bitcoin anonymity, though not perfect, is still pretty damn good. Good enough to fix this current unbanking problem.
Bitcoin is not magical and perfect, trade-offs have to be made in any endeavor. I personally think the ones Bitcoin has made are good ones. Maybe you still disagree.
Nah, the real issue (which it shares with every other crypto project) is that it invented a kind of decentralized network that doesn't get better with more nodes but still manages to use more energy.
Of course, all later ones are funnier. People think Ethereum is a distributed computer! But the whole network runs at the speed of a single node.
If you want to trade numbers with people over the internet, I recommend using Google Sheets. Maybe ban people if they edit it wrong.
True. But now hand someone that lives in a different state or country some cash. Oh wait, you can't easily do that. There are trade-offs in everything.
Yes, we are in the early stages of Bitcoin and not a lot of people are using it. But we are talking about the properties it has inherently and by design. It is designed to be permissionless, everyone is allowed and able to use it. The current situation with regards to use/adoption are not the end game
I guess it depends what you mean by "number 1" but we are claiming that it is the number one best ;)
In all seriousness, it's not just a talking point. Bitcoin's invention, promises, implementation, and operation has significant fundamental differences from all the others. If all you can be bothered to do is say, "yep, they all look the same to me," then maybe just sit out this conversation?
Sorry for the confusion. The term Bitcoin can be used to refer to the code that runs the Bitcoin network upon which the Bitcoin currency/token moves around and is stored. The inventors could probably have come up with different names for each of those things, but what can you do?
Cryptocurrency folks do sometimes take the open source Bitcoin code and make small (or large) changes to it in order to do their work. When they do this they create a separate codebase, separate network, and a separate currency. Almost inevitably they do so in such a way as to greatly benefit themselves and to fool you.
Yeah, I've messed with the stuff a bit in the past. I understand the technical details decently well.
I don't see any significant difference between Bitcoin and the rest. Bitcoin was just the first thing that stuck but that doesn't grant it any special privileges.
If you can't figure out why Bitcoin stuck and the others didn't then maybe you should put a little more effort into understanding the differences. Or just respectfully stay out of these conversations maybe?
> If you can't figure out why Bitcoin stuck and the others didn't then maybe you should put a little more effort into understanding the differences.
Yeah, inertia, social pressure, and economic incentives. For instance miners are into it for the money, so to them technology doesn't matter. A technologically superior network is of no use to a miner if mining for it makes less money.
> Or just respectfully stay out of these conversations maybe?
Banks business is not people anymore. It's quite easy when you understand the business of small cash operations are not attractive for the industry and also fintech has been the new player since a decade managing mostly every transaction online.
The situation is gonna be weird whenever CBDCs are gonna be imposed and the ban will be executed by the government. Good luck with your complains to the gov.
> “And in this scenario, you can’t really negotiate,” he said. “You aren’t talking with a person who has the power to tell you what went wrong and what didn’t go wrong.”
I find this one of the most telling bits of this entire article. It says the quiet part out loud - people are often not looking purely to understand. People want information so they can negotiate, reason, or argue with the decisions.
I moved from <large national bank> to a local credit union back in ~2007 and remain glad I did for an ever renewing fountain of benefits, rooted in separation from the class of large national banks.
Either we completely get rid of the idea that everyone has a bank account which they use for everyday transactions, going back to cash as default. Or we guarantee everyone an account which can not be closed for any reason whatsoever, at a state run bank. What we have right now, is untenable and a true sign of a society which has lost it's bearings completely.
A bank account nowadays is not some kind of privilege which can only be granted citizens which hold the correct political beliefs and have never upset whatever stupid algoritm they have in place to check for "money laundering". A bank account nowadays is simply a modern prerequisite.
Let me be clear, if the bank "freezes" someones account, I think they are in moral right to use violence against bank officials in self defense. The bank has attacked the individual in a meaningful way, akin to digital sabotage, but way worse.
I think the part about bank officials detracts from your point. Whether or not its actually correct, I think its a separate and divisive issue than highlighting the contradiction of requiring that everyone should be able to get a bank account while demanding that banks not give bank accounts to some people
Right, it is incredibly divisive. So is freezing the bank assets of someone, which can endanger their lives at worst and at the minimum causes major distress.
I think it is important to highlight that if you're working at a bank, certainly at a high position, but also everyday clerks, you are lackeys for an organisation that threatens the lives of other people. Those people can choose to retaliate when your organisation gives them no other recourse. It is a fact. Maybe the banks should hire armed private security companies to safeguard the well being of their lackeys?
After all:
- How are you supposed to hire a lawyer to help get your account back when your account is frozen.
- How are you supposed to buy groceries to feed yourself, and your family the within possibly the next few hours. Not everyone has a fully stocked pantry.
- How are you supposed to buy life-sustaining medical supplies to for example a diabetic?
- How are you supposed to pay rent?
Within 1 month, a debanked person will be completely at the whims of being saved by friends and other alternative support networks. They are essentially robbed of everything. 1 month in a bureaucratic context __is nothing__. An issue with frozen bank accounts can take years to resolve, if they are even resolved?! The bank may choose to not give out the money in cash, and may require another bank to receive the funds by wire. What if no other bank takes in this debanked person?!
So when people talk about how divisive it is to mention the absolute animosity that these people will feel towards bank personell of all levels, ask who started it.
And most importantly, if you can't hire a lawyer, you can't buy groceries, you can't pay rent, you can't even buy gas for your car. Your family is standing in line at a homeless shelter, and your kids are crying. What remains other than desperate violence against people you feel are responsible for putting you in this hell of an existence? If you work at a bank, quit now. Don't wait until you've got blood on your hands because you've been a lackey to an inherently anti-human organisation such as a bank. If you continue working for the banks, even as a private contractor which might be the audience of people reading this, you're potentially in the firing line of very desperate people.
And those desperate people are right to be desperate. History doesn't usually change just because someone "filed a complaint", it tends to need to get really bad, and bloody.
The regulator didn't go through Nigel's case at all, as 'it is understood that the data does not cover his case, given that the bank never followed through with the closure' [1]. What FCA found that banks never debanked people based primarily on political beliefs[1]. However, Banks can use political beliefs secondarily to debank, and that's what Natwest did. Nagel sought documents from Natwest using Subject Access Request, there it is "found that an internal committee had deemed his views did not align with the bank's own. This formed part of the basis for cutting him, the document showed, alongside commercial considerations." [2]
It totally is discrimination. A friend of mine in an EU country had the experience where a client’s payment to his business rang all the alerts and was delayed by his bank for a month just because it came from an African country. Both totally legitimate businesses doing no shady stuff whatsoever.
Try to explain to your employees how their salaries are delayed because your bank suspects you’re terrorists or something.
This and some other experiences turned me to someone who believes that the freedom to transact is an inalienable right, and that it should be taken out of the hands of governments and centralised institutions as much as possible.
banks literally operate in a fascist framework, the goverment control literally everything on how they can operate, usually under political logics above sound economics (paper growth by debt creation). By being a sector which consolidate naturally overtime in few conglomerates it becomes quite ripe to corruption and backdealings
I do wonder if the problem lies with the banks or with the amount of federal regulation that makes certain customers unattractive.
I had a small business bank account, and one day I got a call from the bank asking to go through my transaction list and provide explanations for all the transactions. Fortunately they didn't close the account, but given the fact that it was costing them to investigate my account, it did make me wonder if they would have closed it if it wasn't profitable enough.
It is combination of both factors, along with others. (a) big banks (b) BSA compliance manuals (AML, KYC) (c) regulators slapping huge fines against big banks for "weak controls" (d) an algorithmic solution to show that banks have "strong controls"
(b), (c), (d) force banks to wage war against cash. So, if you have a small business that accepts cash, your bank doesn't want your business as a customer, as they don't want to accept cash deposits, nor do they want customers who withdraw cash regularly. That's why large retailers have their own shadow banks to get around the push towards anti-cash.
Federal Credit Union, they have the Federal Deposit Insurance. Whatever that means. I do know that when the California Franchise Tax Board erroneously claimed i owed them a few hundred dollars that J.P. Morgan Chase Manhattan locked me out of my account within minutes - and charged me ~$150 for the pleasure - but neither my credit union nor my Mellon bank accounts were affected at all.
Federal Credit Unions or just credit unions. They're smaller, community banks with a different organizational structure. They're something akin to a co-op, so member-owned.
It's funny how the banks say the reason is that they must know their customers, but they clearly show they do not.
They probably know equaly bad the customers whis accounts they do not close.
Both banks and the banking regulation is a joke. They could certainly do some more manual verification of suspected cases to clear out the obvious mistakes, but they only care about the bottom line and to not be fined.
Eventually more and more use cases for Bitcoin will emerge, as the government becomes less competent and more reckless with its fiat. It costs $35,000 for a reason.
We just discussed this on the occasion of SBF being convicted as a fraudster: all crypto is a scam. Them being negative sum games makes them so. Whether the scam is a ponzi, a pyramid scheme or something novel is a matter of debate. That it's a scam is not in debate, that's a plain mathematical fact.
Fine, I clicked and read a couple of those. I like the 3rd one that defines a ponzi scheme:
"A Ponzi scheme, or "ponzi" for short, is a type of investment fraud with these five features:
1 People invest into it because they expect good profits, and
2. that expectation is sustained by such profits being paid to those who choose to cash out. However,
3. there is no external source of revenue for those payoffs. Instead,
4. the payoffs come entirely from new investment money, while
5. the operators take away a large portion of this money."
This is great because points 3 and 5 are trivially proved false for Bitcoin and shows that is no more a ponzi scheme than stocks or real estate or any other common investment.
UPDATE: you also have to love this amazing piece of either ignorance or straight up lying in the later part of the article:
"By that definition the USD is a ponzi. No, national currencies too fail to fit the definition, because people do not 'invest' in them with the expectation of gain..."
> This is great because points 3 and 5 are trivially proved false for Bitcoin
#3 is trivially proven true. If there were no transaction fees and you rolled back all Bitcoin transactions ever made , you would end up with a zero. This is in stark contrast to a stock where you'd end up with the dividends.
#5 is perhaps better put as "operators take away some portion of this money" and that's what transaction fees are. Calling it large indeed weakens the argument -- but doesn't prove it false.
In the article the author claims stocks have an "external" pay off because stock is tied to a company that sells products and if the company does well they might pay shareholders dividends or do a stock buyback. I can accept that a dividend is an "external" source of income, but those are not guaranteed in the stock market by any means. Most people buy stock in hopes that the price will rise due to simple supply and demand (a company buyback is just more demand). If that counts as external then Bitcoin should be covered too, especially since the overall supply of Bitcoin is guaranteed not to rise over a set amount. That's not the case with any other investment in the world (except maybe real estate, depending on how you look at it)
Bitcoin miners do collect rewards and fees (but not "gas" because that's an ethereum thing not a Bitcoin thing) and Miners are a key part of the operation of Bitcoin, but they are not "the operators" of Bitcoin in the same sense that Bernie Madoff was the operator of his fund. Anyone who wants to can become a miner, no permission necessary. Miners do not actively direct the activity of Bitcoin, they cannot change the rules (especially about how much revenue they collect), allow or disallow certain people from participating (and stay profitable), or anything like that.
There are other cryptocurrencies (most of them actually) where the developers of the currency act a lot more like Bernie Madoff type operators. They own a vast majority of the tokens and the source code that runs the network and they make executive decisions about operations, supply of tokens, protocol (code) changes, etc. That is why those of us who have been around a while point out that Bitcoin is the only one that is not a scam.
Points 3, 4, & 5 apply similarly to any investments made in commodities (gold, silver, copper). A direct source of revenue for those commodities themselves is not provided: There are no dividends being paid out just because I hold 1 kg of gold in a safe. Instead, the people that want to use that gold for other purposes is what provides revenue.
Point 1 & 2 can similarly be demanded from commodities as well. The only difference being is that the public market is where I can cash out my 1kg of gold to.
> By that definition, gold too is a ponzi. No, gold clearly fails to satisfy that definition on two counts.
> First, few if any gold investors have expectations of profits. They generally invest in gold as a hedge -- a "store of value" -- that they hope will retain its value in case other assets go sour.
There is no difference between the expectation of profits & stores of value: They're facets of the same diamond - Value. The pursuit of one is a masked notion of the other & vice versa - Expectations of profit are a consequence of wanting to retain & accumulate resources against the eroding forces of inflation & entropy in general, & a desire for stores of value is of similar expectation that the overall value grows faster than the eroding forces themselves.
> Second, as a commodity, gold HAS a source of revenue besides the investors; namely, the purchases by consumers like jewelers and industry, who take gold out of the market (2/3 of the production) for uses other than re-sale. When one buys 1 oz of gold, one gets a chip of a metal that one can sell to those consumers, and thus obtain some money that does not come from other investors.
Again, as stated above, the gold itself doesn't have inherent value: It's value comes from what can be done with it after being transformed/used for something else.
Similarly, digital services have already been shown to be commodifiable via AWS' EC2 Spot Instances & their fluctuating prices as demand changes.
The consequence of this logic is that in the long term, such compute can eventually be accessed by anyone from anyone willing to sell it via public markets. HOWEVER, such a public market was not yet feasible due to the possibility of such computations not actually being done & fraudulently being reported as such. The stopgap between that future is what we have now: Centralized companies selling compute under trust-based assumptions that do currently work, but that present significant problems related to control over said compute.
The technology was not there yet, but it's being launched now.
EVM-based & Turing-complete VMs in general will generally be made more verifiable with the rollout & integrations of ZK (0-knowledge) proving systems into said VMs. When such computations can be verified to have been genuinely computed within 1/2^n (n >= 64) of an error rate, the addition of a public market to make such compute sellable to people that want said compute is the next logical step, to which Ethereum, its L2 solutions (zkSync, Polygon zkEVM, Optimism, Arbitrum, etc.), & all Lx (x > 2) markets that will come in the future, have already & will provide.
You started off so well, then got into crypto gobbledegook. Ethereum or anything built on it will never compete with AWS. That is just so completely hilarious. Also very off topic from the discussion here about people being unfairly unbanked.
We as in "Socialist Party of America"? I did not have a chance to contribute to this "discussion". What happens when this unbanking is practiced en-masse or when the US defaults on its foreign debt, with USD failing as the global reserve currency? The second one is imminent, and not only in my opinion.
That second one had better happen before 2030, because after that the US and one south american country being the only nations with net positive birth rates - and therefore populations that aren't aging out of productive work - coupled with the fact that it will take the rest of the world a couple of centuries to catch up to our military, means that the U.S. just needs to not be stupid for another 6 years or so.
So really, it probably is imminent; what with fighting 2 (and maybe up to 5 or 6) proxy wars and letting corporations continue to erode the tax law and environment to the detriment of the average taxpayer.
I was told the US was the greatest country in the history of countries and i should be proud i was accidentally born here...
That net positive birth rate will mostly come from the part of the population that is hardly capable of modern competitive productive work. They will be increasingly appeased with hand-outs, in the form of basic income, welfare and especially of make-work, which will put further pressure on the US dollar.
Even if you are one of those people who thinks surveillance is okay to prevent crimes, wouldn't it make sense instead to tip the authorities and silently watch the transaction patterns until an actual crime is proven and its structures dismantled? Who thinks is the right thing to ban criminals to financial systems like cryptocurrencies where tracking is difficult?
Banks obviously! Crime and corruption departments are costly. If you are an actual millionaire they will make a 40 pages report on your political views before kicking you but if you are a small customer paying rent that happens to have a funny name or withdraw cash too frequently its better to just kick you out of the platform... and have you talk to the algorithm.
Think of it. If government wants to efficiently catch financial crimes they can instead setup a digital-nomad-crypto-friendly-bank-with-minimal-kyc-plus-eresidency-and-offshore-companies and just follow the money. I suspect this will be a lot more efficient than the current framework.
Banks are locking the capacity of an individual or group of people to interact with society and their access to basic living needs while making a mockery of the concept of innocent til prove guilty we built our societies on. The burden to prove you are not a criminal is on you.
And while vast majority of people are vocal against xenophobia and racism when its the banks ruining someone life because they have the wrong passport color some people will applaud and justify the systems protecting their sweet homeland from dirty barbarians from the east and south.
But even if you think AML laws are a force for good you need to agree this whole situation is very fucked up. I'm normally very against regulation but bank accounts in current digital society should be granted as a basic right.
> Instead, a vast security apparatus has kicked into gear, starting with regulators in Washington and trickling down to bank security managers and branch staff eyeballing customers.
Despite the article and the comments, this isn't an American thing. There are stories on line that are near identical to these from all over the world.
Citibank did this to me. Venmo'd my architect for some work he was going on my house, kablammo, account closed, no notice. Was just lucky it was an account set up specifically for work on that house and not my that's-where-my-paycheck-goes account.
I feel like this is the modern version of excommunication. Bank accounts are essential to life in modern societies and if you have none, you are in serious trouble. If there are suspicious activities these should be investigated instead of just closing the account.
This could easily kill small business in favor of big players. Let’s not accept the status quo here. Banks should be only allowed to close accounts with proper investigation and transparency, not rely on some dumb algo or poor thought out process.
I didn't get de-banked, but did have my card blocked by the bank once, so since then I have two banks, and use them both about equally. So if there is a problem with one bank, then I can still get food and stuff.
My personal experience of this is that you can have direct, hard evidence of someone commiting fraud, and they will still jump on social media screaming that they are being persecuted.
Not a severe example but my card gets flagged constantly for supplier doing a small under a dollar refund. No matter what notes they put on their back end it still triggers it.
The law says the bank must give them their money. But banks are above the law. I know when PaPal codes and account, PayPal usually steals the money. Most traditional banks eventually give you your money if you hire a lawyer, that is, they give the money to the lawyer who keeps it.
How do you know Paypal usually keeps the money, is there a public accounting of this situation? Would be interesting to analyze - please share any info you have on the data.
PayPal's EULA has a "liquidated damages clause", which means that if they think you lost them money and damaged them, instead of having to go to a court, they just charge you what they think the damages are.
Recent events show even in our liberal democracies, governments can't be trusted with the power they already have, and the enormous power that technology does and will afford them.
(The most salient example is the Trudeau government freezing the bank accounts of trucker donators.)
why would a bank just close your account because of a false positive
i read through most of the article and could not find discussion of such an obvious question
do you get to re-open your account after they realize they're wrong? does this actually affect credit scores? big if true. i realize this is probably just a bug due to security theater with unwillingness to fix the bug being part of the security theater.
we already knew the bank polices every single transaction we make (which is absolutely intolerable and should be illegal, along with most of the credit system which is also just surveillance), but closing accounts in any meaningful way would be new.
and this is another dipshit article that doesn't actually even name the problem. instead they point to unprovable discrimination as usual. NO. the problem is that what someone does with their money is a private matter, like none of your fucking business. there wouldn't be any discrimination if the bank just was a real product and not a one sided """relationship""" which is just code for "we shove our noses into every transaction you make for your own good, loser".
what i imagine is that in actuality what actually happens is you have to do a bunch of annoying phone calls and "security" crap like going on a website and doing captchas, receiving 6 digit codes through SMS, whatever new security theater fad is current like spinning around in front of a camera, etc then you get your account re enabled.
> The goal is to crack down on fraud, terrorism, money laundering, human trafficking and other crimes.
Estimated yearly cost of KYC/AML worldwide: $180 bn. Money actually frozen (frozen doesn't even mean it's going to eventually seized): $12 bn. 15x less. Complete, total and utter failure.
Basically these KYC/AML rules are profoundly unjust and overwhelmingly only affect honest people who did exactly nothing wrong.
The situation is so bad that there even the EU is now trying to rectify things a bit.
"ABBL a échangé avec la Commission de surveillance du secteur financier (CSSF) pour que la réglementation AML/KYC s’applique de manière proportionnée, en conformité avec les textes. L’obligation de diligence variera dans son intensité selon les risques effectifs que peut représenter une structure."
Basically: discussions are ongoing to make sure banks use proportionated KYC/AML rules and all the while staying within the letter of the law.
For the situation has gotten so out of hand that it's an issue for startups and individuals trying to open bank accounts and it's beginning to have a noticeable effect on the economy.
Basically 180 billions, worldwide, burnt yearly in nothing productive: only pointless administrative work. It's not helping poor people. It's not helping the economy. It's helping nobody. It's leeches leaching all the while making everybody suspicious and scared that their accounts are going to be closed.
An example: the association of parents at my kid's school wanted a bank account. We're talking about a non-profit with a yearly budget of few thousand dollars. Due to crazy KYC/AML they couldn't.
That is not "proportionate". And some of the demands were likely not in accordance with the law.
For example I've had sites, to verify my identity, which asked me to film myself while speaking (AirBnB "conciergerie" / high-end thinggy IIRC. Not sure but that "videos of yourself talking" happened to me on several sites).
I'm not sure that the EU directives regarding KYC/AML allow the collect of information including videos of people talking.
When speaking about things needing to stay proportionate, I've had a notary ask me to trace the source of funds up until 2014. Seriously WTF: there should be a limit as to how many years they can go back in time.
I bought an apartment in 2001 and I now want to sell but I'm concerned because I don't have any trace of the money anymore: it's from nearly a quarter of a century ago. I'm concerned that, before the sale, the notary (who's forced to snitch btw) is going to ask me the source of the funds used to buy that apartment in 2001 (nothing shady: I was writing computer books but I don't have any trace of any royalties payment. I don't even remember through which bank I bought it).
Another example: I did cancel a private insurance. All that was needed was a proof I moved to another country. Or so I thought. They gave me the full KYC/AML... For cancelling an insurance! Why? I take it because I moved and went living to another EU country: if you move from one country to another, you automatically become someone suspicious.
Now where it becomes really vicious: these KYC/AML always go back further and further in time but banks do not allow you to go back more than 8 or 10 years (when you want to check older statements). They then bill you hundreds of EUR, per account, per year, to give you your older bank statements. Which is adding insult to injury: the very same clique that is making your life miserable with KYC/AML is making money for the very bank statements they're asking (well, technically it's bank B asking your statements of bank A... But for another person it's going to be bank A asking that person's statements at bank B).
It's so bad I now have a Git-versioned folder only for KYC/AML with proofs of everything. Any wire transfer of more than 10 K EUR I now save and archive for posterity.
Another big issue is that none of this KYC/AML nonsense is centralized: so you basically have to do the same fucking paperwork for your insurance, banks, brokers, notary, etc.
Fuck KYC/AML. Just fuck it. This horrible, pointless waste of time and energy is bane of my existence and needs to die.
These laws/rules reflect the sick mind of those who wrote them and those who voted them (and they're badly failing at actually freezing and seizing drug/terrorist/trafficker' money).
These kinds of experiences are exactly why I stay with a small, local credit union.
No bullshit fees. I can get to a real person quickly. No stupid algorithm running in the background ready to banish me the moment something unusual happens.
There are legitimate reasons to use a bigger bank, but I'd wager that for 90% or more of people, a credit union would be a net improvement.
I'm somewhat surprised no one here views this as an automated decisionmaking problem
It's increasingly clear that automating important decisions like this is causing a lot of harm while removing most forms of recourse available to those affected. Coupled with the way automated decisions are used to perform and then launder fraud on a massive scale, maybe we should target laws at the automation itself: Require decisions made by automated systems of any kind to be auditable and explicitly define what human is held responsible and what remedies can be applied
Cory Doctorow has talked about how "they" test these kinds of things on captive "audiences" - mainly children and prisoners - before expanding to the rest of us. I tend to add marginalized groups to that list. Even when a person can nominally be held accountable, it doesn't matter if you can't reach them, protected by an administrative or institutional barrier of some kind.
Standardized testing and remote learning monitoring, automated sentencing software, and any number of social programs are examples, if you were wondering.
So, part of the problem is the signalling that the tolerating of these practices when they happen to those less able to defend themselves presents to companies. "Go ahead, do it, you'll get away with it." I tend to think: because the people with the power to stop it benefit from it.
I want to dive into the "how to politely resist this in an effective way".
1. Opt out of these things as much as you can. Often times you can't opt out of the underlying actual thing (school, banking, etc) but you can opt out of the terrible new thing. You don't need to explain to people a deep "why". Instead give the people polite, reasonable (and generally true) excuses. "Oh, it doesn't work on my computer". "Oh, I don't understand how to use it." "I don't really like technology."
2. Help other people, particularly children, the elderly, the vulnerable, etc, in opting out of these things and bypassing them when needed. Help them fill out the paperwork, call the right people, cause the right fuss. Frequently, you'll find by helping one person they'll go on to help other people do the same thing.
3. Tell other people, in appropriate times and circumstances, that you don't care for these things and opt out of them. Don't be weirdly obnoxious about it, but when someone gripes about it or complains about it not working for them.. just agree with them. Most people don't like these things. These things don't generally work (for anyone). They suck. Let other people know you agree with them that these things suck.
There are cases where this doesn't work - automated account closures, automated sentancing, rent shenanigans. You can of course do the usual things of bugging your congress critters (and you should) but you should also use the full range of pressure available to you. Don't do business with shitty companies - and when they inevitably try to sell to you, tell them why you don't do business with them. When a politician supports automated sentancing tools, explain to them why you aren't voting for them.
Surprisingly a little bit of pressure goes quite far.
Right, it's a lot easier to say "my phone is too old" rather than "I reject basically the entire premise of the extractive, exploitative societal structures upon which this coercive relationship is built and relies", etc. :)
I think it is the opposite. I think they are suggesting that Weinstein saw consequences to (some of) his actions (eventually) because his victims were not children or prisoners.
You can’t game something when the maximum award is still designed to be Not Enough On Its Own. That describes quite literally every US government aid program— from food stamps and school lunch debt at the very bottom of the financial ladder, to grants+loans for those who have demonstrated the academic merit to get into college, to healthcare and social security for literally every citizen in this entire country.
There is not a single program in the US, by careful design, that can give “too much”. Yet we still spend so much money on the bureaucracy trying to disqualify anyone from their own programs.
Imagine how much we’d save, socially (less homelessness! no death for lack of healthcare! a more educated and informed country!) but also maybe financially, if we actually _gave our people what they need_.
People don't want to see people on their perceived level getting something they are not. People will accept people they perceive as at a lower level getting something but it can't be more than them . Because many people working are at the poverty level or lower these programs have to be set lower than that which is lower then the minimum needed.
The money spent on fighting individuals could be offered as a top-up to the working poor which would other programs to raise levels.
yes, there are the millions dead in various "cultural" and agri-"cultural revolutions, the millions dead in gulags because they opposed the horrors of communism. i grew up in it, and it makes me vomit when someone mentions that murderous ideology.
true, like there are many cults that last for a while before they become murderous or just peter out. when it scales up to country level (USSR, China, Cambodia, Cuba...) communism is always murderous. Just give me an example that contradicts that.
There’s a whole lot of spectrum between what GP’s parent is suggesting and communism. In fact, no one even brought up communism until the parent’s fairly vapid Marx quote. Is that the one that made you vomit?
No one I know on disability is gaming the system or doing well. It is not enough money. No one I know wants to be on it either, they just would die otherwise. Some kind of ultra ignorant rock you’re under.
One of the things I’m deeply afraid of getting older is becoming a right-wing, neoliberal Randist, and using years of being alive as an excuse to dismiss everything and act self righteous and haughty
Some years back, and acquaintance of mine detailed how he gamed the system. He'd work until he met the minimum number of employed weeks to qualify for unemployment, then he'd do a lousy job so he'd get laid off. He'd then go on unemployment. Being unemployed required him to look for a job, so he'd look for a job, and flunk the job interview. When the unemployment compensation ran out, then he'd get a job again. Over and over and over.
BTW, when he was "unemployed", he'd take off-the-books jobs.
A businessman acquaintance told me how he'd found some well qualified people he wanted to hire. They said they'd take the job, but only after their unemployment compensation ran out.
The Seattle Times ran an article a couple decades ago (wish I'd saved it) where they went around interviewing people on welfare. They'd ask "what would you do if the welfare was cut off?" The answer was "get a job." They interviewed people in a car with fishing gear. "Where are you going?" "Fishing" "Don't you have jobs?" "No, we get welfare." "Wouldn't you rather have a job?" "No, we'd rather go fishing."
Sure, there are people who should be on welfare. But there are a lot of people gaming it.
Every government program designed to hand out money if specific requirements are met results in companies and individuals springing up to game it.
"For every 10,000 households participating in the Supplemental Nutrition Assistance Program (SNAP), about 14 contained a recipient who was investigated and determined to have committed fraud (via a 2018 report by the Congressional Research Service). Within SNAP, for every $10,000 paid in benefits, about $11 is determined by state agencies to have been overpaid due to recipient fraud.
To put this into perspective, the IRS estimates that for every $6 owed in federal taxes, $1 is not paid because of tax evasion or fraud."
This comment I put up there with talking about welfare queens. It shows someone's politics immediately.
Fraud as defined by these authors is very rare. They are not talking about what the average person is when they talk about common welfare fraud. These studies mean outright fraud, not someone able body choosing to game the system instead of working.
If you changed the definition to match the collequal understanding of fraud your results would not be a number literally everyone who lives in neighborhoods where benefit recipients are the majority laughs at when told.
It's like saying the PPP program had very little outright fraud. True. But in my mind, you committed fraud if you took the money and didn't actually end up truly needing it for it's intended purpose. Most share my definition. Under that definition I'd posit the vast majority of PPP recipients participatated in fraud, but it will never show up in the studies or numbers.
Anyone who has spent any amount of time actually living within these communities understands the situation with benefits looks pretty much like the situation with PPP writ large.
This whole post could be summed up as "I make up stories from people that don't exist to justify my selfish world view", and frankly these "people are saying" anecdotes with no facts backing them up don't work well on a site where people research things instead of taking them at face value. If you want that kind of echo chamber, may I recommend Facebook or something similar?
70% (approximately) of people on welfare already have a job. That's strange isn't it? Not going fishing. Not living the life working under the table. No, doing the hard jobs you expect to be done for next to nothing, for your comfort and convenience.
They clean your hotel rooms, wait on you at restaurants and check you out at your local Walmart that destroyed all the other work in their town, and then paid them so little they had to apply for help to feed their children. These vital jobs that people expected to be done even in the middle of a pandemic, well they don't pay enough to live off of anymore. Because the wealth only moves in one direction and has for decades.
Welfare the majority of the time is a hand up not a hand out, 50% of recipients are able to get off of it inside of a year, 70% inside of 2 years and if we should have a few people who game the system, oh well. It's a necessary evil to make sure women and children are not on the streets, to ensure that once you are down you are not out, because we are the most prosperous nation on earth and we can EASILY afford it, and part of the social contact entailed in being an American is you care for your fellow Americans. Unless you are someone who sits around ruminating about what an injustice it is that a portion of your income is used to keep children from being hungry and how very unfair that is to you.
I pay more than what I am asked in taxes, I contribute to charities at a rate that most people would be surprised by, and I can tell you this. Every charity in our country is a failure of our government. Every church that proselytizes via helping the poor does so because the system we built is not working for it's constituents, and myopic people want to spend a bunch of time fighting about who gets what of the very, very thin slice of the pie, instead of actually doing the hard work of reforming the bakery. If there is any truth to your anecdotes at all consider this; it might be more telling of you and the moral fibre of those you surround yourself with than people at large.
It's an absolute pain to actually apply for unemployment. It's not a reliable gambit. I can't even do it right now for NY; their website is down every weekend for "maintenance" (total bs that such a thing exists) when they want people to "certify" for unemployment.
Almost like we should just blanket-provide the same amount of aid and safety net to everyone, cut out any and all pre-qualifications, and completely change our tax system to ensure all costs are recaptured by a progressive tax system.
That way someone who used aid and becomes wealthy would pay into it in the future. Right now our systems more or less just keep you where you are.
My first instinct was to post a detailed takedown, and I started to go into Washington State's unemployment system eligibility and benefit criteria... but on reflection I don't think most of those things you just told us actually happened. There is a history of anti-welfare activists lying about the facts they have observed and those lies forming immortal zombie collective memories. Numerous examples in Reagan speeches are still repeated as fact today despite being debunked in the 80's, repeated as part of a consensus conventional wisdom by both political parties. So why bother?
If you'd like to sanity-check your recollections, try to figure out what the people in question would be eligible for, and try to figure out what it would actually cost to live in Seattle.
I will point out the number of politicians who were shocked, shocked when they went to backdoor COVID relief through the unemployment system, and found that most state systems were deliberately neglected to the point of abject dysfunction, or had erected punitive gating systems that defeated most applicants.
> I don't think most of those things you just told us actually happened
Believe whatever you need to. But consider this:
People are fundamentally selfish. Building a system that assumes general altruistic behavior is not going to work very well. Assuming people will not take advantage of rules for their personal benefit is naive.
Consider politicians. Have you ever noticed that people tend to go into Congress as middle class people and come out wealthy? How do you think that happens? Altruism?
How many people offered student loan forgiveness will say "no thanks, I borrowed the money, I'll pay it back!"?
The people I mentioned were not breaking the law. But they were taking advantage of it.
Just some thoughts from a fellow graybeard (if I had a beard). Take em or leave em: Bitterness about somebody else who's worse off than you getting things you don't think they deserve, doesn't add to one's own happiness or wellbeing. Don't let those example people live rent-free in your head. They're barely eeking out an existence on some US State's laughable safety net. I seem to remember you're likely a computer professional and doing just fine.
If you're one of the few people in the world doing well enough to be paying into a system rather than relying on one, thank your lucky stars for how blessed you are. Ultimately, nobody on their deathbed contemplating their life cares about who their taxes were spent on.
If you simply must be mad at someone getting government handouts without need, there's a big list of companies who use accounting tricks to pay no taxes and even get subsidies from the government. You're probably better off being mad at them than some guy who's figured out how to go fishing while collecting unemployment.
I'm just saying that when you incentivize people to do X, be aware that X is what you're going to get, every time.
I remember when the unit at the company I worked for decided to put a big graph of the bug count on the wall, and announced incentives for retiring bug reports. Within a week, the entire unit had devolved into knock-down drag out fights over who had solved a bug, if a bug was really a bug, if a bug was actually 3 bugs and the person should get 3 credits for solving it, people filing fake bug reports and then "fixing" them, etc. A couple more weeks of that and the graph was taken down and the incentive program terminated. These were intelligent, well-educated people, going berserk.
There was another case where the company got a big contract from IBM, and hired some mercenary contractors to fulfill it. Part of the deal was each mercenary got a $10,000 bonus (worth about $30,000 today) for getting it done on time. I'm sure you know what happened. It shipped the day before the deadline.
I asked one of them, "did the bonus get you to finish on time?" The response, "absolutely not, it had nothing to do with it. We're professionals!"
I think people raise hundreds of millions of dollars to win a job that pays less than a junior SWE because they’re just so darn public spirited, obviously.
Apropos of anything else, COVID relief was never going to come through the unemployment system. Too many issues of pride and other such things like you mention, but also the grift potential of the PPP scheme worked hugely in its favor. As of now, less than 15% of those loans were ever paid back (I know that forgiveness was an expected part of it, but nonetheless, that number…)
Yeah we need strong anti-Kafka laws so that individuals can always find out what they've been "charged" with and that there always need to be an "appeal" process and businesses are strictly denied the ability to claim that they can't reveal their methods.
Listing the specific problem that led to a service denial could be helpful, but could be not. I bet that it's very rarely something like "You did <this one forbidden thing>, so we ban you according to the rule 3.6.4.2 of ToS". It could be something like: "The pattern of your activity is very similar to patterns of activity of 9823 known scam attacks". Or even more detailed: "8 out of 11 statistical models analyzing 982 parameters of your activity during last 48 days showed the probability of your account being used for illicit fund transfers above 0.92, and the remaining 3, above 0.57. In particular, our 100M-paremeter AI model (link to a PDF with technical details) has classified your activity thusly: (a 20-row table follows). According to the law, we use a publicly available model, widely accepted as a standard in the industry. You can inspect the model's weights at huggingface (link follows)".
Interpreting such results is a job. Disputing such results in a court, or with an arbiter, would be really hard, unless you're a practitioner of the pattern-recognition craft yourself.
There's no need for the model weights and parameters. The probabilities output from a multilabel classification model would be entirely sufficient to tell what the model thought the user had done. It was trained on a category and it is claiming that the user is part of that category. That category should have a human description of what the corporate entity was looking for and that should be enough for some kind of arbiter to determine if the 'accused' was actually doing that or not. The question isn't what the model is doing, the question is if the person is a false positive or not, which should be able to be determined without any reference to the model at all. If the model is doing too many false positives then determining why the model is broken becomes the job of the corporation (ideally with some punitive financial damages as incentive).
Although I do think that the model weights and parameters should in some way be subpoenable so that the model can be 'compelled to testify' if someone has enough legal, technical and fiscal resources to sue the company.
I had my Venmo account frozen. I'd only made about three payments. Two to a food bank and one to a school organization. Via email, they said the decision was permanent and their policy was to not discuss why the decision was made. Luckily for me it was only Venmo, which I don't really need to use.
It isn’t the bank’s preferences. Rather it is forced by the liability bestowed by them by the government. They don’t get the benefit of safe harbor like ISPs.
They can't even get the legal system to function, how are they going to fix ALL corporations?
Some of best examples are the juvenile and and family court systems in a state like Ohio. Not only do they not even TRY to do what is fair or right, they have one simple mandate, pay for their own existence. As soon as the system set up to punish children is made to profit off those same children you have a sick and broken system but thats where we are today. So, VERY little chance we are going to convince a company to make less money for the social good when even out children's courts are run like a business.
I've been a part of a system like this (a financial system that happens to not be technically a bank). The system was constantly under attack by fraudsters: You could find subreddits with guides on how to try to outright rob us. So we had teams building detection systems that tied to detect said fraud as early as possible: Hopefully before we handed the fraudsters any money. Depending on how bad the score was, there might not even be a manual review step before we closed the account, because the numbers were that blatant.
As with any classification system though, 100% accuracy isn't going to happen. But there's always some customer service rep that can look at the details of the account, and see why in the world the system said what it did. But a detailed explanation of why we thought something was fraudulent could (and sometimes would!) just lead to another fun reddit post where someone describes how to hide the fraud a little better.
For any given system like this, how much harm is actually being done, vs how much is being prevented (as fraud just leads to raising prices to cover for it: financial companies are not charities)? I've read way too many CSR conversations where a blatant fraudster with world-class chutzpah would claim that we were destroying their family for no reason, when the data was damning. But this doesn't mean that everyone who isn't a fraudster really reaches out to the CSRs, and has the energy to prove there was no fraud. The actual levels of damage are just hard to measure.
We should have sensible, mandatory, available customer service access, which costs just enough to access to not be hammered by bots, but that is completely refunded in case of error. But what is really causing this is that many companies have lowered the barrier of interaction so much that we are letting a lot of fraud through the door. Remember how getting a merchant account in a real bank is a multi-day affair? How getting hired to become a delivery driver needed an interview, with a real person, and a manager checking between deliveries? The price of not having to interact with a human to sign in is fraud detection that isn't a boss you interact with every day, makes sure you are working, and is paid from the work you do. Companies with billions of customers and probably hundreds of millions of suppliers aren't exactly workable without automating a lot of those intermediate jobs away.
Maybe we made the wrong call across the board, and lower-productivity, but far higher trust commerce is the way to go... but a lot of that commerce is losing in the market, right now. So if we like it, we have to be willing to pay extra for it.
> But a detailed explanation of why we thought something was fraudulent could (and sometimes would!) just lead to another fun reddit post where someone describes how to hide the fraud a little better.
If I were in charge, it'd be too bad for your company, and they'd have to give a detailed explanation every time even if that would be the result, because the alternative is way worse.
> Maybe we made the wrong call across the board, and lower-productivity, but far higher trust commerce is the way to go... but a lot of that commerce is losing in the market, right now.
Plenty of people in the comments here want to enforce that approach via laws and regulation..
> So if we like it, we have to be willing to pay extra for it.
.. and I wonder if they are taking this into account.
In the same way that nobody knows which milk bottles are full of chalk, nobody knows enough about the hundreds of businesses they interact with on a daily basis to TOS comparison-shop. The understanding of what Google could do to your online life by closing your Gmail account is near to nonexistent in the consumer population.
> In the same way that nobody knows which milk bottles are full of chalk, nobody knows enough about the hundreds of businesses they interact with on a daily basis to TOS comparison-shop.
That's what brands and reputation are for. And it works: brands often do command a premium.
(Mainland) China has regulations for milk. Including banning of chalk. Alas, those regulations aren't enforced with much teeth in practice, so consumers rely on reputation and brands. Specifically, they buy milks from oversees, like Australia, because of their superior reputation.
A big part of that reputation is that Australian companies won't be protected by the Chinese government when they screw up. So it's harder for them to hide blemishes on their reputation (at least to hide them from Chinese customers).
> But a detailed explanation of why we thought something was fraudulent could (and sometimes would!) just lead to another fun reddit post where someone describes how to hide the fraud a little better.
I worked for a company doing this sort of fraud detection. Knowing features and weights really would make it easier for fraudsters.
I don't have Cash App, Venmo, Zello or any of those other micro payment apps because every single time that I sign up for one, I get automatically blocked on my 1st transaction. Zello is even offered directly by my bank so it's automatically linked to my banking info. Calling customer service leads nowhere. It all works out for me in the end because if I can't Apple Pay or Paypal someone I probably don't need their product or service anyway.
OTOH Paypal is an absolute crapshoot. Something like fifteen years ago they just decided I shouldn't be able to use Paypal anymore. No indication of why. It took them six months to cut me a hard check for the $100 I had in my account at the time. Complete BS system.
>Coupled with the way automated decisions are used to perform and then launder fraud on a massive scale, maybe we should target laws at the automation itself [...]
how about we stop at the actual source by not having the government launder the task of law enforcement to third parties? The article makes it pretty clear that banks aren't exiting customers for fun. They're doing it because they have to, on pain of facing regulatory action.
> I'm somewhat surprised no one here views this as an automated decisionmaking problem
It isn't an automated decision-making problem. Every instance involves humans in the loop making the final decision. And that article makes clear -- via spokesperson statements -- that it is auditable and the banks know exactly why accounts were terminated.
I know what you are saying but I want to counter the interpretation a bit.
What the spokespeople say is a claim…it’s not truth, we don’t have independent evidence of it, of course they would claim that.
Even if they did have human in the loop - what does that meaningfully look like? Are those humans given the authority to actually overrule the decision? Are they given the evidence to do so? Are they punished or perceive that they will be punished if they do?
I don’t think taking the banks answer to any of those questions at face value is responsible citizenship. Yes it’s what they said - no I don’t think that supports calling it reality.
I’ve mentioned this in other threads related to medical billing. My wife and I have had crazy medical bills for bizarre things the last few years. They are never correct, often they are basically fiction. The people you talk to just point to the bill as if it is inherently correct because it’s the bill. I’ve shown pictures of me on vacation on another continent that same day they charged me for a service…well the bills the bill. That’s not human in the loop, it’s a human shield around the automated decision making loop.
It’s a fixable problem, make incorrect billing an actual crime. It already is to mid bill the government, just not people.
> I don’t think taking the banks answer to any of those questions at face value is responsible citizenship
I agree but I wanted to push back on the idea that this was somehow due to automated decisions being made. That isn't really the problem here. The same exact thing would happen if the government mandated "no computers are allowed to be involved". The problem is opaque decision making, no clear escalation path, a disregard for the short term pains, and so on.
The fundamental problem isn't how the decision gets made. Even if a human made the decision you'd have the same issues of the front line consumer support saying "well the other department made their decision, I don't know why and I don't have the authority to change it and they don't accept calls".
By talking about automated decisions, the OP is making the conversation about the wrong problem.
You are right and I am speaking as someone who has worked on these systems. It's hard to convey to people, as these systems scale up, the bugs scale up too. And the resources to handle them shrink. Even if the false positives are less than 1% tens of thousands of people can get effected. And things are swept under the carpet, cause the costs to corporations are rounding errors.
Every app should have a signature that includes the devs that worked on it, the business manager that requested it, and the IT leadership that oversaw its use.
This is already done for financial statements.
If you put out software that is actively causing harm, you should know your fingerprints are on it
Employees like devs would be protected by professional insurance. That would cause bad management to shape up, or otherwise lose inaurance coverage.
Everyone has agency. “Just following orders” is not an excuse.
If someone asks you to implement something that crosses an ethical line for you, you ALWAYS have the agency to refuse. It’s hard, but it’s critical that we never give away our own agency and control of our own actions.
You may not be able to stop an implementation from going forward, but you ALWAYS have the ability to not contribute to such an implementation.
That’s totally fair. If someone doesn’t have the visibility into the decision, and isn’t aware of harm coming from their actions, then they don’t have a moral responsibility.
>Everyone has agency. “Just following orders” is not an excuse.
depends on your safety barrier. In some very high profile cases, depends on your life. I commend people like Snowden but I certainly wouldn't choose to spend my entire life running from the US government in an attempt to be ethical. I have too many selfish personal goals to try and attempt to sway the masses like that.
To be fair, in the context of software refusing to code a feature you morally or ethically disagree with is very different from attempting to blow the whistle against the US military and three letter agencies.
You wouldn't have to flee to Russia for refusing to ship spyware in a mobile app, for example.
Eh. The problem is that people can change software too easily. Say I work on an app as a major contributor and then later on a colleague makes an update to it which makes it do something unethical. Now my name is attached to this unethical app
It's against your benefit in many cases. It has no actual benefit towards your goal of stopping it. Why pay the personal cost for misguided guilt unless it's to add to a personal brand?
> human oversight policies provide a false sense of security in
> adopting algorithms and enable vendors and agencies to shirk
> accountability for algorithmic harms.
> propose a shift from human oversight to institutional oversight as
> the central mechanism for regulating government algorithms.
> First, agencies must justify that it is appropriate to incorporate
> an algorithm into decision-making and that any proposed forms of
> human oversight are supported by empirical evidence. Second, these
> justifications must receive democratic review and approval before
> the agency can adopt the algorithm.
I think that is mostly, because no good bank will rely on an automated process for this. Not one bank I have been to had 'derisking'/'divestiture'/'whatever they call it there, because, surprise, this idiocy is not standardized; government just gave companies general idea of what it wants without actual mechanisms' that was ultimately dependent on an automated process. The decision was always human with bankers ( especially commercial ones ) arguing for 'their' customers.
Now, I do not know how bad fintech scene is, but I do know that they generally suck when it comes to actual BSA compliance. Then again, I do not really consider fintech banks. Neither does treasury for that matter[1].
Still, this is not THE problem even if you raised a valid and relevant concern here. The issue is and always has been BSA legislation that put this requirement on banks without specifics. More than that, the core issue is that the stupid population that was so scared post-9/11 that it let this thing pass through with minimal whimper.
Clearly, it got bad enough that it got some important people and Treasury had to issue a guidance[2]. No one cared for 2 decades.
I am sorry for the tone. I am glad this is getting a wider audience, but I do have a bee in my bonnet that it took this long.
> I'm somewhat surprised no one here views this as an automated decisionmaking problem
Because it is a legislative problem of not ensuring sufficient rights, such as the inalienable right to have access to an electronic money account with which you can receive, send, and keep money.
Sounds like a kind of software engineering license. If you have one, you can make big money, but you’re also on the hook for failures. Really increases the incentive to not fuck up these systems. If there was a business decision that caused this, it is up to the engineer(ing team) to be able to audit the system and directly point blame; otherwise, they are liable
Not if we successfully neutralize this paradigm's ability to take over crucial institutions, such as by enforcing lines of responsibility as I've suggested
And they will continue to not care, because they will be able to avoid being affected.
The racism mention in the article is notable - this isn't prima facie racism (and certainly affects more than minorities), but it is derivative racism since "people who can actually be heard to go through the system in the right way" is race-skewed.
The problem is that the likes of Google, Meta, and Amazon are normalising (have normalised?) "scale via automation" and are making bank on an unprecedented scale as a result.
If they can do it, so can we.
Just like offshoring manufacturing and service centres to places that pay the lowest wages (even though us proles aren't allowed to buy entertainment media from those same places, but that's a separate topic)
Must be nice when your sole customers are nation-states and 3-letter agencies. Better B2B than B2B (or should it be called something else... N2B — nation-to-business?)
> A DEA agent boarded the train at the Albuquerque Amtrak station and began asking various passengers, including Rivers, where they were going and why. When Rivers replied that he was headed to LA to make a music video, the agent asked to search his bags. Rivers complied. He was the only passenger singled out for a search by DEA agents – and the only black person on his portion of the train
Never answer with any info, never consent to searches.
I think there's a recent and ongoing bipartisan bill in the US trying to fix some of the worst aspect of civil asset forfeiture.
With some luck ten years from now there may be a bill in the US trying to fix some of the worst aspect of KYC/AML (like regular people getting their bank accounts closed for no reason and without any explanation).
it's almost as if power doesn't want to do things democratically. who cares if it's the government with it's boot on my neck, or a corporation with a boot on my neck, either way, I'm getting trod on!
Banking is optional; the problem is that many businesses insist on bank cards to transact. It’s important that businesses be compelled to accept cash for all transactions.
It’s particularly bad in some cities. Rather than enforcing access to the special hell that is US retail banking, just prohibit businesses from ripping out their existing cash infrastructure.
Even with a bank account, your ability to transact is subject to surveillance and seizure/freezing without evidence or probable cause. Cash has none of these problems.
I'm not sure I would agree that banking is optional in today's society.
Canada has laws[1] intended to ensure access to banking, with $10M fines for violations. Not familiar with them myself and wondering how effective they are, and whether anyone has sued and won. It's maybe a bit ironic considering how the government here improperly locked a lot of people out of their funds during the trucker protests (the inquiry found collateral damage where people completely uninvolved were affected).
Canada does the same thing with shutting down bank accounts based on "suspicious transactions" and then turning around and saying "we can't tell you why".
Pretty sure it's a global agreement around terrorist funding.
I cannot get paid by my company without a bank account. No company would pay me my salary in cash. A bank account is no longer optional if you want to live a normal life.
If they issue you a check you can take it to the banking institution listed on the check and they will honor it. The downside is, now you’re dealing with cash (and some companies went DD only a long time ago).
Most banks (in the US) will charge the presenter a fee to cash a check drawn on an account they service. [1]
It's reasonable to demand that your employer make your whole pay (less withholdings) available to you, and if you are unable to maintain a bank account, and their bank charges a fee to honor checks, that's not really reasonable if you are paid by check.
New Zealand doesn't have cheques any more. Banks here totally phased them out a couple of years back.
The USA will also make checks obsolete over time.
Plus cash is disliked at many retailers and cash is not acceptable at some locations (e.g. my skifield only accepts cards - I was told it is because the nearest small-town bank won't accept cash deposits from the skifield). I suspect our government will slowly discourage cash 1. to prevent tax evasion (cash jobs), and 2. to prevent illegal purchases (e.g. weed). Those are the main uses for cash that I personally see others use cash for (I use cash because I like using it and I like privacy).
I wouldn’t necessarily expect us to follow New Zealand’s example. We’ve accumulated a lot of methods for exchanging money without really discarding any in particular.
New Zealand is a small country way out in the middle of the South Pacific Ocean 2.5K miles (or over 4K kilometers) away from its nearest neighbor and with a population smaller than NYC. The United States is 50 stubborn ass States plus the Fed’s occupation in southern Maryland. The Reserve Bank of New Zealand has an address in Wellington, is owned by the New Zealand government and answerable to Parliament. The Federal Reserve system isn’t even a single bank with a single board of directors, isn’t wholly owned by the US Government and isn’t directly answerable to Congress.
There’s no easy way to make a lazy comparison between us and have it be convincing. Parts of the Federal Government would likely love to see the United States become a cashless society but they don’t always get what they want.
Australia has a population bigger than NYC and "Australia is set to be a cheque-less society by the end of the decade, if the federal government has its way."
Zealand has a population and land area similar to Oregon. Might as well say NZ has a much bigger population than Wyoming - NYC is irrelevant.
Cheques have slowly disappeared because of economic reasons: the transaction costs/risks involved, and because electronic transfers have benefits. The economic forces are likely similar in the states. I believe the change has little to do with the NZ government nor the Reserve Bank of New Zealand.
Kinda missing the forest for the trees here. What I’m driving at is that New Zealand and the United States are not easily comparable and just because New Zealand is doing a thing it does not follow that the United States also shall successfully pursue and accomplish the same policy objectives. Even a straight comparison between Australia and New Zealand is difficult and both their system of government and their banking system are closer in form with each other than with the United States, and there's a lot fewer people in a lot fewer places to just straight up disagree and subvert the efforts and policy objectives of the Federal Government, no matter what they may be. If a Presidential candidate ever did make it a platform issue, you could probably expect his opponents to take the opposite approach.
What the United States lacks is the kind of central control that a Westminster-style of government can exercise, even over cash money and checks, and there are a lot more institutions with some say over the continued prevalence of cash so even as its usage declines it is unlikely to completely disappear even in our lifetimes. Even if Chase stops giving their customers checkbooks, it doesn’t mean M&T will, and even if M&T does, it doesn’t mean there won’t be a bank that makes it a point to offer free checkbooks as a value add to small business owners that want to continue issuing paper checks to their employees. The form money takes here tends to be additive, and it is rare for a system to ever completely disappear. I mean next on the chopping block is probably Zelle followed by ACH of all things now that we have FedNow, and even that’s not necessarily going to happen.
You seem to think that government or federal control is required to phase out cheques. Maybe some legislative roadblocks needed removal (e.g. removing laws forcing companies or departments to accept cheques?).
AFAIK it was economic and convenience forces that caused the disappearance of cheques over a couple of decades. Banks discouraged chequebooks by making the accounts and books expensive. Retailers at most risk of receiving bad cheques started not accepting cheques (e.g. gas stations). Handling fees for cheques. Chequebooks not available to people with credit risk. Businesses stopped paying using cheques - instead they needed a bank account. New Zealanders got more familiar with cards and direct debits, so fewer New Zealanders (individuals and businesses) used cheques.
AFAIK it wasn't a top-down activity in New Zealand. Australia's move seems to be more government based but I would guess Oz is part way down the tracks of discouraging cheques.
The last time I remember handling a cheque in NZ was back in the 2000's (dividend payment). I remember thinking cheques were quaint when I worked in the US in the 90's: we have been slowly discouraging them in NZ for decades.
It is just like how we are not paid in cash at the end of the week no more - systemic change happens slowly.
A company may 'want' to hire you, but most companies also want their employees to be at least somewhat fungible. If you're too difficult to hire, they will look again.
Banking is not optional in today's advanced societies, and the sooner we recognize that, the sooner we'll have proper regulations mandating a minimum level of banking service, eg. Limited deposits, withdrawals, debit/secured cards.
Solution, bring back post office banking or banking through the social security admin. Turn 18 you get a banking and benefits card. Do that and most people won't ever have to do business with a private bank, ever.
Millions of people live normal lives without bank accounts.
The solution to the problem is not to force retail banks to extend their terrible customer service to all of society, it’s to ensure the utility of cash. Cash works great even if the banks (or the state) hate you.
This depends highly on the country. Cash doesn't work so great in most of the EU anymore. In Spain and Greece for example, it's illegal to buy anything with more than 500 euro cash I believe.
They will then bring in a drug sniffing dog they've trained to notify the police officer of a presence of drugs on command, and voila, there's reasonable grounds to search your vehicle.
"One of my in-laws was EOD in the US Army, and has rode in this vehicle. You need to find a dog that will not signal on explosives of any kind. Furthermore, the clock on this stop, per <supreme court decision about unreasonable roadside detention>, is starting to run a bit long. Here is my attorney's card."
Good luck with that. There are multiple reasons cops use to do a search if they want to. Probable cause can range from seeing something sticking out from under your seat, speeding, suspicion of being under influence, or being in proximity of another crime. Pair that with the incentive of civil forfeiture profits and it’s not looking like a good idea to travel with 25k
I am convinced that if the American police forces wish to detain, arrest, or take your money, they will find a reason to do so, or create one where none was there before. Assets forfeiture, detainment, and arrest without legitimate judicial reason is deeply unfair. Regardless of innocence that may be found and adjudicated later, the damage to ones reputation, employment, and even banking can be disastrous. Recourse is often costly or non-existent.
The one time I was asked to be searched while driving I declined. They immediately called a drug dog, yanked its leash, and called it a drug hit. I then hung out for an hour while they confirmed I was a poor college student with zero drugs.
Driving with any amount of cash above a few hundred will get you robbed by the police in asset forfeiture. It happens everyday around the country to small business owners that deal with a lot of cash.
Banking is definitely not optional. Certain transactions, specially those done online, require digital payments that cannot be done with physical cash. It's increasingly a required part that's needed if you want to participate in modern society, and the lack of access to such banking systems forces people to adopt subpar services as a replacement.
In the ideal case, banking should be a utility like power & water: A necessity for modern life, without which certain daily routines would not be possible.
I believe it's optional for you, but not for the great majority of people. Lack of access to banking services specifically holds back a lot of people (look up 'unbanked').
You can walk into any USPS office and buy up to $1000 in money orders anonymously. What prevents them from selling anonymous prepaid cards the same way?
