Daily Archives: 2006-09-26

Closing in on suspicious transactions

After almost 3 years of problem-free banking in the UK I recently received the following letter from HSBC’s “Accounts Review Team”. It advised me that the HSBC group no longer wished to have me as a customer and that I had 30 days to move my banking to an establishment in no way connected to HSBC, before they would close my account. Confident that I had not indulged in any illegal activity recently, and concerned about their reasons for taking such action, I attempted several times to phone the number given in the letter, unsuccessfully reaching a “we are busy, please try again” recording each time. Visiting my home branch was not much more helpful as they claimed that the information had not been shared with them. I was advised to make a written complaint and was told that the branch had already referred the matter, as a number of customers had come in with similar letters.

After two written complaints and a phone call to customer services, a member of the “Team” finally contacted me. She enquired about a single international deposit into my account, which I then explained to be my study grant for the coming year. Upon this explanation I was told that the bank would not close my account, and I was given a vague explanation of them not expecting students to get large deposits. I found this strange, since it had not been a problem in previous years, and even stranger since my deposit had cleared into my account two days after the letter was sent. In terms of recent “suspicious” transactions, this left only two recent international deposits: one from my parents overseas and one from my savings, neither of which could be classified as large. I’m not an expert on complex behavioural analysis networks and fraud detection within banking systems, but would expect that study grants and family support are not unexpected for students? Moreover, rather than this being an isolated incident, it would seem that HSBC’s “account review” affected a number of people within our student community, some of whom might choose not to question the decision and may be left without bank accounts. This should raise questions about the effectiveness of their fraud detection system, or possibly a flawed behaviour model for a specific demographic.

My account is now restored, but I have still had no satisfactory explanation as to why the decision was made to close my account, nor do I know how this sorry affair will affect my future banking and credit rating. Would an attempt to transfer my account have caused HSBC’s negative opinion of me to spread to other institutions? A security mechanism that yields false positives or recommends a disproportionate reaction, e.g. closing an account based on a single unexpected transaction, should be seen as somewhat flawed. The end result is that the system runs on a guilty until proven innocent premise, with the onus for correcting marginal calls placed on the customer. Ultimately the bank will claim that these mechanisms are designed to protect the customer, but in the end randomly threatening to close my account does not make me feel any safer.