You’ve hit it there - i suppose the argument that is if you’re suspected of murder and charged - bearing in mind a court case will need to be decided - you’d likely still be put in a holding cell. (I realise i’m stretching massively now 
)
Yeah but… that’s after you are charged (the murder example lol), not before.
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Yeah no I’ve definitely stretched it too far 
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In @bea’s original post linking to the blog post, she mentioned the above ^^^
But unless I’m missing something I don’t actually see anything in the blog post saying what to do if this does happen to you.
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No I appreciate you viewpoint, and to a degree I agree - but at the same time for some things we have some idea on whether or not things are true - I clearly don’t work for Monzo so my “certainties” are just my opinions.
I know a little about the MLR Regulations, the FCA and the Anti-terrorist Financing Laws - so I can see where Monzo are coming from in a way.
Ordinarily yes, but Monzo need to put something to the NCA otherwise what are they suspicious of? I don’t mean to suggest that the “valid evidence or reason” means you’re a money launderer, but it’s something that has been flagged - if that makes my point any clearer?
No I agree and maybe I came across in an incorrect way - hence my second statement saying that they need to have suspicion and a likelihood.
I do think it is crucial that we don’t do a disservice (and I wasn’t trying to).
But in a way my point remains that they really can’t do anything without evidence (whether that eventually proves guilt or not) something has to have happened and they use that to report to the NCA - again I can see how that may be construed badly.
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An excellent blog from Monzo but some of the comments here entirely miss the point.
First, It’s the law and they have no choice but to comply or there wouldn’t be a Monzo. If you don’t like it, write to your MP, not your bank.
Second, this is civil, not criminal, law (pre-conviction) so the standard of proof is balance of probabilities (ie 50%+1), not beyond reaonsable doubt. So it is entirely right and proper that Monzo act on their legal duty when they identify suspicious activity. As another poster has commented, the bar to submit a SAR to the NCA is (given it is against the civil standard of proof) relatively high.
Third, fraud is the one type of crime most people in the UK will experience. If it was your account being hijacked, would you not want your bank to do something about it…?
Fourth, put this in context. Organised Crime Gangs and Terrorist groups are looking to move money around the financial system day in, day out. The consequences of that are hugely significant and must be taken seriously. This isn’t just accounts being hijacked, money muling (where someone allows an OCG to move illegal funds through their personal bank account, for a fee) is an increasing risk. If you are stupid enough to agree to this, then you’ve committed a crime and should be prepared for what’s coming your way.
On balance, and considering the consequences of successful terrorist attacks and the sheer human mystery OCG feed on (drugs, modern slavery, human trafficking, forced prostitution, gun running - to name but five) I would rather society is protected by the anti-money laundering regime, even if it is at the cost of a few false positives.
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I think it’s likely out of monzo’s hands here but I think there’s one thing about monzo’s threshold being too low but for example; I think a change in the law needs to be made.
In the case of Bob (being a hypothetical person). Bob uses his bank account every day has a 65k salary so earns around 4k a month give or take. He had been doing this for several years and pays his bills by direct debit and his grocery shopping and general life style from his card.
Suddenly he received 4 lots of 20,000 and the bank decide this is questionable and and submit an SAR to the NCA. I think it’s perfectly reasonable that the 80,000 should get put on hold and investigated. But let Bob eat. Let Bob pay his bills with his salary.
Just to reiterate right now I understand this option is out of the banks hands right now but that doesn’t mean the process is correct.
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Suddenly, out of nowhere, recieving 4x £20k payments?? Are you having a laugh??
If we’re not talking about payments from his employers bank account (a bonus, for example), or from a reputable firm of solicitors (an inheretence or proceeds of the sale of a house), then that is pretty much the text book definition of suspicious, and potentially all of Bob’s assets (not just his bank account) will be subject to seizure and forfeiture under the Proceeds of Crime Act if he is convicted. Prior to his conviction, his assets will be frozen to prevent him doing a runner with the loot.
If that didn’t get reported to the NCA someone at Monzo would need to be arrested for conspiracy.
Bob is clearly up to his neck in something illegal and lucrative and he needs to accept the consequences.
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Or it’s a genuine payroll error that he has to pay for by having his account blocked when it’s not his fault
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The BIG Short on Netflix watch it! It’ll give a great example of how everybody is in bed with everyone else
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In which case if he didn’t take reasonable steps to return it to his employer he would be committing theft (by retaining wrongful credits - there’s no such thing as ‘bank error in your favour’ in the real world) under section 1 of the Theft Act 1968 and his account would be evidence of that offence and be frozen anyway, and he would be arrested.
(Not being able to return the funds because the account has been frozen under AML legislation would be grounds for a defence to this charge).
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Because they have to submit something to the NCA - I’m not saying the evidence will always show guilt as we naturally have false positives. But Monzo need to submit something to the regulating body. I could see say if Monzo had to do their own checks and once they’re satisfied it being a little trickier. But the NCA also has a limited time to respond, so if Monzo were submitting false submissions wouldn’t the NCA have something to say?
I might just be being naive or thinking the best of Monzo - I can see how/why Banks do some of the stuff they’ve been caught for in the past on a “blurred lines” basis - but reporting fraudulent activity seems like a waste, do they have anything to gain by doing that?
I’m definitely not - I see the remediations the FCA put in place on the bigger banks than Monzo and the eye-watering fines - and i’m not naive enough to think that a big business wouldn’t act in prejudicial ways - i just don’t see it in this example.
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Yes but if the bank froze his account the second the transfer went in then poor honest Bob didn’t get that chance to even notice what happened and now he has no money for food.
I think it’s an unwinable situation for the banks under current legislation
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If Bob made no effort to return the pay error - frozen account or not - he has still committed theft. Whether or not he can pay his bills is immaterial to his criminal conduct (but may be a defence or mitigation at court).
There is a difference here between a banks automatic fraud prevention systems (“We’ve noticed an unusual transaction in Las Vegas, could you please ring us to confirm it’s genuine - your card is temporarily suspended…”) which the bank can rectify once the account holder has verified the transaction;
and a suspicious transaction within the meaning of the Anti-Money Laundering Regs, where if a bank fails to act they have committed an offence themselves. Honest, law abiding people fall foul of the ALM regime incredibly rarely. Whilst hypothetically possible, your Bob scenario is so unlikely as to not be worth worrying about.
Online banks (like Monzo) are deliberately targeted by OCGs to facilitate money laundering, so I would expect to see a higher frequency of SARs and frozen Monzo accounts than in a high street bank (in case your wondering, the OCGs like that they don’t need to interact with anyone face to face when setting up the account).
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And you can’t freeze an account - within the meaning of the ALM Regs - that quickly (the second a transaction hits the account).
Someone at the bank needs to notice the transaction, regard it as suspicious, report it to the nominated officer, who makes an independent decision about whether or not it meets the criteria to be reported as a SAR to the NCA (the point at which the account is frozen).
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I think this all comes down to what happens if you miss one fraudulent issue/ miss a hijacked account. You get nailed by the FCA or NCA(if its a fraud issue/terror related) and you get nailed by customers and consumer groups if you miss a stolen account/fraud issue( and the negative PR fallout from either of those issues could be catastrophic)
(Imagine taking away HSBCs crown the worlds most criminal bank
source: https://www.marketwatch.com/story/netflix-documentary-re-examines-hsbcs-881-million-money-laundering-scandal-2018-02-21)
Just look at the case of Revolut they have been hammered in the press for their questionable approach to fraud
Source: http://www.altfi.com/article/5127_revolut-denies-fresh-police-fraud-probe-over-money-transfer)
A couple of false positives for the health of the company in general isn’t too bad. This can obviously be mitigated somewhat will Machine learning and other approaches to detecting fraud but fraud can be difficult to detect 
(Deloitte and Patisserie Valerie(You could argue that there were other issues at play as well but that’s off topic).
In summary a couple of false positives is better than having a PR storm raging(I get there’s trust-pilot but that’s a completely different subject again)
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There is also a material difference between Fraud, which is a ‘mass market’ financial crime and which most banks use some form of AI as their first line of defence against - which may suspend specific transactions; and suspicious activity within the meaning of the AML regime, which requires at least one person (the nominated officer) to form a view that the transaction is suspicious (it can be brought to their attention by another person; or by some form of AI).
But I would rather a bank (especially one holding my money) has a risk averse approach to this.
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Risk averse approach to implementing fraud checks or always err on the side of caution and when in doubt lock an account?
Averse to the risk of fraud / money laundering … or err on the side of caution to use your turn of phrase.
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How come is Bob guilty because of someone’s error? To steal money you have to do this pro-actively. Act of theft doesn’t happen passively.