Bank customers in the US have been left angry after their accounts were suddenly closed in the latest round of debanking across the US.
Many Americans who have been the victim of debanking say they receive “vague” responses from their banks over the closures.
Banks are said to blame an “account agreement” which means they can close an “account for any reason at any time.”
An investigation of more than 500 debanking cases by the New York Times revealed that many people “don’t know what you’re under suspicion for”.
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Caroline Potter, whose Citibank accounts were shut down abruptly last year, said: “You feel like you’re walking around wearing this scarlet letter.”
Potter and her husband had moved to Idaho during the pandemic, selling their old house in New York and buying a new one.
Some large chunks of money moved between their various Citibank accounts.
Citi then closed down everything, including their checking accounts and credit cards.
“It felt like there was this secretive department, and anyone who wasn’t in that department didn’t even know about it,” she said.
The situation mimics that of GB News’ presenter Nigel Farage who eventually found out his account was closed after staff decided his views did not “align” with the bank’s own values “as an inclusive organisation”.
Across the US, banks are facing more aggressive regulators and examiners, which they say is the reason behind “appropriate reviews”.
Jerry Dubrowski, a spokesman for JPMorgan Chase – the nation’s largest bank – said: “We want to build long-term relationships with our clients, which is why accounts are closed only after appropriate review and consideration of the facts.”
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“We act in accordance with our compliance program, consistent with our regulatory obligations.
“We know that can be frustrating to clients, but we must follow those obligations.”
By law, banks must file a “suspicious activity report” when they see transactions or behaviour which might violate the law – such as unexpectedly large cash transactions or wire transfers with banks in high-risk countries.
According to Thomson Reuters, last year banks filing SARs tagged categories like suspicious checks, concern over the source of the funds and “transaction with no apparent economic, business or lawful purpose”.
Former bank employees suggest it is this data that causes errors.
Aaron Ansari, who used to program the algorithms that flag suspicious activity said: “There is no humanisation to any of this, and it’s all just numbers on a screen.
Last year banks filing SARs tagged categories like suspicious checks, concern over the source of the funds and ‘transaction with no apparent economic, business or lawful purpose’
Reuters
“It’s not ‘No, that is a single mom running a babysitting business.’ “It’s ‘Hey, you’ve checked these boxes for a red flag — you’re out’.”
Oore Ladipo, from Nigeria, was also debanked despite working as a data analyst in New York on contract while earning a master’s degree.
But while waiting for his employment documents from the federal government after securing a permanent role, his parents wired him money from Nigeria to help him make rent in 2018.
He said: “They were aware of my study, work and family history but still closed my account after almost 10 years.
“You aren’t talking with a person who has the power to tell you what went wrong and what didn’t go wrong.”
Ladipo felt confused and betrayed, but he believed that the Nigerian wires were the likely culprit.
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
