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Comment by philipwhiuk | Hacker News Reader

I don't know that this would have been any better - they have the same fraud/AML laws to comply with.

You can go to their brick-and-mortar building, say you want your money, call the police, give them a hard time even if they can't fix your issue, so they try to avoid it next time.

Pure online banking doesn't offer this option. For instance, I still even keep my printed quarter receipts just in case.

People trust technology too much, it's all well until it isn't, and you understand how much of your life you trusted to those companies.

There are a particular set of AML/KYC laws for which none of that will ever help. They can’t tell you why, they can’t stop it next time. It sucks but there’s nothing any financial org can do about it.

Those are the money laundering / antiterrorism bits, which are pretty hard to trigger.

The reality is that online banks rely on "AI" for their basic anti-fraud efforts much more than real banks do, and these are the results: arbitrary shutdowns and no customer service. But hey, I'm sure doing customer service wit ChatGPT will solve it (/s).

If they need source of funds, it's AML/CTF, not fraud.

But that's not only online banks; my brick-and-mortar bank did the same thing, froze my account until I provided papers (they already had, just updated). I went to the closest physical branch and they told me 'blah dep flagged this, nothing we can do'.

I think the point as more that you can get escalate things with physical authorities (police, courts) if they have a nearby local physical branch.

Their internal policies ofcourse will remain the same.

Police aren’t going to help you with bank issues, and the courts don’t care if there’s a local branch or not, as the hypothetical lawsuits are filed against HQ . It’s just not true. It makes people like OP _feel_ better because they have someone to yell at, but it doesn’t help.

> online banks

You keep using that word and it's masking the real problem here.

The problem is that this company isn't a bank and isn't regulated as a bank. If they were a bank this wouldn't be happening. There would be recourse.

Use banks. Keep your money in regulated institutions. History has countless examples why.

I'm just gonna come out here and say 'don't use fintech companies'

Heads up that all financial institutions in the US, regardless of if they're regulated as a bank or not, are subject to following KYC/AML laws. Bank's are just as much, if not more subject to scrutiny in this area.

You can't use a bank to skirt KYC/AML laws, sorry. And you have a similar amount of recourse (little to none) if you run afoul of them.

It really isn't that hard to trigger to them, the UK Sanctions List[0] is huge, and contains quite a lot of broad descriptions that doubtless result in people getting swept up in automated checks of the list. Is your name Ali Khalili? Cool, you're on the sanctions list, because that's literally all the identifying factors provided for an Iranian general. I'm sure once it flags the bank will reasonably quickly take a look at your details and realise you're not in fact an Iranian general, but that will take time, and in the meantime your account has been frozen.

[0] https://docs.fcdo.gov.uk/docs/UK-Sanctions-List.html

I have a feeling they just blame those and do low effort bulk screening.

Unfortunately, not always. I had once my account frozen by one of the UK's largest banks for days. The reason? Apparently they didn't have my mobile phone number. They never asked for it. Also, on multiple occasions their online banking was so broken that one wasn't even able to use it. The plus is that indeed, if something goes wrong, after a long time of inconvenient waiting, a human will eventually pick up the phone. The drawback is that sometimes they are so technologically broken that fixing things will take ages.

I recommend distributing even small sums of money across as many accounts as you have. Some in Revolut, some in Wise, some in a normal bank. There is a number of reasons for which access to your bank account can be blocked (fraud attempt, stolen SIM card, stolen card etc.) so the more backup you have, the better off you should be. As the person above said, keeping printed receipts might also be useful for legal purposes.

Good luck with that. I had my account frozen at the biggest bank in USA, with no notice or explanation. When I went into the bank they pretty much said "sorry". Almost two weeks later my account was unfrozen again without notice or explanation.

It definitely would have, because you can walk into a branch office and talk to a real person, not some AI chat bot that creates a ticket after boring you to death with unhelpful answers, and then you end up waiting for that to be looked at and async back and forth that can take days.

interestingly my brick-and-mortar bank (ING Netherlands) also stopped accepting walk in appointments during covid and conveniently kept that on now. So you have to deal with this shit anyway just to talk to someone, but yes at least there are still people

And banks are closing all of their physical presences one after the other. Pretty soon they'll just be a bank of computers and an AI for all of your interaction.

I hope to have shut down my business activities by then.

That, in theory, should create the space for a challenger bank providing real-people interaction. Metro Bank seems to be doing that (yes, they are currently in trouble, but so are a lot of other banks - interest rate changes caught a lot of folks off-guard).

Service as a Service :)

Enshittification seems sticky though. It takes a while before customers realize that the "tech banks'" support are like trying to talk to Google.

We will have to pay a premium over today's price for a normal bank.

It may unfortunately not help, in such cases, the salesman sitting in the bank ("account representative") is not more useful than a flower in an office pot.

All they can do is to tell you to wait for weeks for feedback, and if you don't comply, call the security on you.

This real person doesn't really have any significant advantage.

From my personal experience, when you have a problem the only thing they can do is to call someone and talk on your behalf, and you can do the same from home, btw. The only advantage the banker has in this case is that they have those numbers on fast dial. But keep in mind that even if you called the right department nothing can be resolved immediately and all the following communications are by paper mail, so it takes months to recover your funds.

In all likelyhood they have little more to go on than the same script the AI has, except maybe they also watched a training video published a long time ago that is now out of date.

We don’t hear about traditional banks freezing money as much online banks. Maybe people who use traditional banks are mostly running traditional businesses with well understood risk profiles.

Also traditional banks make you go through a lot of paperwork upfront, so they probably don’t have as much as risk online banks which approve everyone without much paperwork. So that’s why online banks aggressively block anyone who is high risk and start doing big enough volume.

but they have a very different approach wrt. _how_ they comply with them

also as important there is an additional hop in the money transfer involving two institutions, this might not help you if there is e.g. money frozen because of an police investigation, but for algorithms running rogue it can help to have money in two different organizations.

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