No UK bank will ever tell you why your account is frozen, and this is why: https://www.cps.gov.uk/legal-guidance/money-laundering-offen....
Source: used to work on Monzo's financial crime team.
Source: used to work on Monzo's financial crime team.
A frozen account could be due to any number of things. The customer service person may or may not have access to the reasons. In any case, it might be money laundering (from the bank’s perspective), therefore they can’t tell you anything.
Of course this is ridiculous. Due process should exist, even when a private organization “accuses” someone of illegal activity.
This is why you don’t build your own solutions to well solved problems.
Other banks run their AML systems in batch at the end of the day, and will only freeze an account after the money has left.
So yeah, you’ll see a lot more people complaining about Monzo, because their money will be frozen while they’re trying to exfiltrate it. That doesn’t mean Monzo has an unusually high false positive rate, it just means that people are used to being able to get away with fraudulent behaviour, and have their accounts frozen empty. Rather than being stopped mid-act and having their accounts frozen while they still contain illegitimate funds.
There should be a penalty for this. When "innocent" users are denied access to their money, those actions are much more felt by the user than the bank. That user's money is a rounding error to a bank, but to the user it is everything.
An incorrectly frozen account should come with some sort of "oops we're sorry" type of something that a bank can understand: monetary reward for the user.
I would rather criminals get away with a laundering transaction than me not being able to buy/pay for something in my day to day because of some dumbass AI algo.
There are, the FCA and Financial Ombudsman hold banks to an extremely high standard and hand out fines and compensation on a regular basis. Denying access to funds is a serious issue which banks and regulators take very seriously. However there’s an acknowledgment that AML systems have false positives.
> I would rather criminals get away with a laundering transaction
Easy to say when it’s not your money that’s been stolen. Most money being laundered through retail banks like Monzo isn’t drug money, or high stakes bank heists. It’s the millions stolen every year from normal people subjected to high pressure, complex, coercive and extremely effective social engineering scams.
We’re talking about peoples house deposits (because their solicitors emails got hacked), their life savings, their retirement funds.
Don’t assume you’re immune to these scams, or that you’re paying a cost for it. The scams trick even the most savvy individuals. Costs are borne by everyone with a bank account because victims are reimbursed, and I can assure you, no bank is sacrificing their profit margin to do that.
False positives are one thing, but it shouldn't take a year to resolve?
And it’s not just a criminal act for the organisation, but the individual customer service agent can be held personally criminally liable for disclosing, even accidentally.
So yeah, they have a really strong incentive not to tell you anything.