Banks Are Closing Customer Accounts, with Little Explanation

disclaimer - work for a fintech. Buried in the article is this really important point:

> The SARs are largely kept under wraps. Customer service representatives might not know if such a report was filed (or anything about its contents), which may be why it can be hard for them to explain account closures to customers. “It is held to a high level of confidentiality, and it is a crime to disclose that a SAR has been filed,” Ms. Cohen Levin of Sullivan & Cromwell said.

Unfortunately if you or a transaction of yours "looks suspicious" or show up on any of the various AML/anti-terror lists/filters - which are full of false positives and nonsense - BY LAW we cant tell you why your account was closed. It sucks, people are rightfully angry. It doesn't seem worth it to me - if you are actually doing BadThings and your account gets closed, i'm sure you know why. Being opaque is really not providing much benefit to law enforcement here, at the cost of massive inconvenience for many.

Now, banks are also guilty of hiding behind these laws for non-mandatory account closure reasons - when they have internally decided they dont want you as a customer for whatever reason. That also sucks IMHO. Perhaps changing the law would remove the plausible deniability in these situations and lead to more transparency.

The fact that two different banks are not dealing with him, makes me suspect that the first person ended up on Federal government list somehow.

It does not happen only with Banks, there are many cases where innocent people, that are flagged by fraud detection machine learning algorithms in social media or any kind of service, are banned or have accounts frozen without any explanation or warning due the false positives results or bias in the machine learning algorithms. In lots of cases, companies operating fraud detection algorithms don't provide any way to appeal and do not have any human in the loop for reviewing the decisions taken by the algorithm due cost saving or scaling. In general, no explanation is given to a person flagged by the algorithm in order to not disclose how it works or help bad actors. In the case of financial institution, other reason for no giving explanation is the legal AML requirement that forbids financial institutions from telling a customer that he or she was flagged. It is becoming a Kafkaesque world, the AI is more and more making decisions about our lives without due process and right to appeal/recourse.

Here some similar case:

  - AI tool flagged parents with disabilities: https://apnews.com/article/child-protective-services-algorithms-artificial-intelligence-disability-02469a9ad3ed3e9a31ddae68838bc76e

  - https://www.theguardian.com/technology/2022/aug/07/ai-eu-moves-to-beat-the-algorithms-that-ruin-lives

 - https://ico.org.uk/for-organisations/guide-to-data-protection/guide-to-the-general-data-protection-regulation-gdpr/automated-decision-making-and-profiling/what-does-the-uk-gdpr-say-about-automated-decision-making-and-profiling

 - U.S. warns of discrimination in using AI to screen job candidates : NPR / https://www.npr.org/2022/05/12/1098601458/artificial-intelligence-job-discrimination-disabilities

 - Finding it hard to get a new job? Robot recruiters might be to blame | Work & careers |/ https://www.theguardian.com/us-news/2022/may/11/artitifical-intelligence-job-applications-screen-robot-recruiters

 - https://www.vice.com/en/article/jgq35d/how-a-discriminatory-algorithm-wrongly-accused-thousands-of-families-of-fraud

 - Handling Discriminatory Biases in Data for Machine Learning - by Matthew Stewart, PhD (it shows how to make ML algorithms fair) / https://towardsdatascience.com/machine-learning-and-discrimination-2ed1a8b01038