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Comment by School-Cotton | Hacker News Reader

So in the UK it's legal for banks to simply shut down your account and steal your money, and you have no recourse? Seems hard to believe.

Apparently, from his profile, the guy you responded to is from the Netherlands.

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Basically yes - the law changed and the banks are just taking advantage of it.

Part of this is that while under investigation they are not allowed to talk to you, and have no motivation to act quickly. I have read in a lot of cases, once they start the process it is very unlikely it will end well. You will, of course, get your money back (assuming you can prove everything they want).

They will close your account and the damage is done regardless if you are guilty of something or not. Quicker for them to close an account, then carrying on investigating a backlog of cases.

Of course, at some point, they will lose customers from a bad reputation but can take years before this becomes a mainstream problem.

I think the odds are small of this happening to you by accident, but it is happening.

This problem has not happened to me but did to a friend and I had to loan him money to pay his rent, bills etc. Took 3 months to resolve. Was with Halifax bank.

Personally, the main problem I have experienced is around credit cards and reducing limits when you pay off lumps sums. Worse still - I had a credit card closed and they took the money directly from my savings account as part of their T&C ability to garnish money from any other source linked to the bank. There was nothing I could do about it.

Lesson learned NEVER have a loan/credit card in the UK with the same bank as the one you have savings or your salary goes into Also, NEVER have your personal accounts and business accounts with the same bank!

The other comments on here about having multiple accounts for businesses can be a little tricky as some banks will not open a second business account if you already have done opened with someone else. e.g I had Lloyds business bank, tried Metro bank but they refused to open until I could prove Lloyds was closed.

I wonder what the reasoning behind that is. Surely if I wanted to move my company's banking facilities from one bank to another, I'd need to make sure the new facilities were open and working, run both in parallel for a few weeks while clients paid outstanding invoices and the like, and then close down the old ones once everything was using the updated details? If Metro won't open a new account until you can prove that you've already closed down the old one, how many businesses ever transfer to Metro?!

It's to make structuring harder. Of course it is perfectly well possible to have multiple business accounts, no need for you to inform them of your other accounts with other banks (and privacy laws may forbid banks from sharing this information). I have accounts with both Rabo and ABN/AMRO at the moment and nothing would stop me from adding a third or even a fourth bank if I wanted to.

  no need for you to inform them of your other accounts with other banks
  (and privacy laws may forbid banks from sharing this information).

The UK have a small number of credit reference agencies, and UK banks universally (as far as I can tell - there may be extremely niche private banks which don't) share customer data with one or more credit reference agencies (and there is provision in law for this).

Every bank I know will carry out a credit-check on a customer opening a new account (even an existing customer), so your other accounts will be immediately visible to the bank you're applying to - and the fact of your application will also be recorded.

I have no idea how much that information would affect your application, but I'd be extremely surprised if questions weren't asked.

It's a UK company [1].

The issue isn't that there's no recourse - it's that there's no urgent recourse, so you can spend months without access to the funds you need to pay bills, pay employees, pay your mortgage…Time enough to go bankrupt and lose your home.

[1] https://beta.companieshouse.gov.uk/company/08036404

Difference of shutting down and preventing access to funds. It is legal, based on small print, to shut down an account on the sending of a letter (proof of sending a letter) and place funds for all accounts (businesses likely to have multiple accounts, globally) in a nostro account for transfer, waiting for payment instruction, just-like-that. Quite ugly, but done. That's a bit different from OP's case, however.

There's nothing to suggest the Bank have "stolen" OP's money.

Would you prefer "holding the OP's money hostage"? Call it what you will, it doesn't make the situation any less ridiculous.

Actually, and somewhat counter-intuitively, money you put into a bank account belongs to the bank, as an account-holder you have a credit and they have fiduciary duty towards you. But in a very fundamental sense the property of your money has passed to the institution you bank with. They do however have the duty to make it available you, or rather, do as you instruct them to up to the value you banked with them.

EDIT: Foley v Hill, the foundational precedent https://en.wikipedia.org/wiki/Foley_v_Hill?wprov=sfti1

This is correct, and similar legislation exists in many other jurisdictions. It is one reason why you want to be somewhat careful with who you bank with.

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