Hsbc Offshore Accounts - Policy Change

[cmsally]

HSBC have just sent me their "electronic secure key" which is a credit card size ramdom PIN generator. Every time I access internet banking I have to generate a new PIN on this little device, that looks like a small calcutator. This came from Jersey where I have an account. Over and above that all seems normal.

Actually if you check the "from" address on the package it looks more likely it came from a warehouse on the outskirts of London!!

[Mobi]

All the UK High street banks have held branches in The CI and I of M for donkeys' years, specifically to cater for their non resident , UK customers.

There was a time, way back, when a non resident Brit had to hold all his money offshore to avoid UK income tax. but that rule was rescinded decades ago and it is no longer necessary non residents to hold their funds offshore to avoid tax. However any interest earned on UK based bank accounts will attract tax at their marginal rate, whereas interest earned on offshore bank accounts by non residents will be free of tax.

So whereas once upon a time there was a compelling reason for non residents to hold offshore accounts, these days, it is of marginal benefit, and provided the account holder is a bona fide non resident, he might as well hold his funds in an onshore bank account.

There was a big hoo-ha a couple of years or so back, when it was found that thousands of tax resident Brits were sorting their money away in offshore accounts to EVADE tax and a witch hunt was undertaken to expose them and bring them to account. It was at this point that the offshore bank branches became more stringent on their requirements for Brits wishing to open and maintain accounts.

More recently the ugly spectre of terrorism and money laundering together with new, mainly US instigated regulations, has made most banks paranoid, as I am sure we have all found to our cost and inconvenience.

Just last week RBS had to pay enormous fines in the US when it was found that they had been unwittingly helping Central American drug barons to launder their money.

I am very surprised that HSBC has decided to close accounts of long term British customers - especially given the roots of the Bank in Hong Kong where they grew on the back of entrepreneurial, expatriate Brits. I

I can only assume that they have conducted a review and concluded that the amount of business generated by these offshore account holders does not justify the potential risk, (and adverse publicity), involved in getting caught up in tax evasion, or money laundering. Certainly the security measures that are now necessary to prevent such practices must be very costly.

However, I am sure there are any number of offshore branches of British banks that will continue to service their non resident customers, and I suggest the OP does a bit of research and opens a new account with an alternative bank.

I myself have held an offshore account in the I of M for many years, with no problems, but I also hold a second account with a major UK bank on the mainland, just in case I ever need it. Similarly, I hold credit cards with UK banks as well as a Thai credit card as you never know what may happen in the future and when they might come in handy.

Living in a country like Thailand, you should never burn your 'overseas financial bridges' and always have back ups in the event that all hell breaks loose and you have to leave in a hurry. That's my philosophy, anyway.

[PETERTHEEATER]

A lucid and informative post. Thank you.

Yes, I have banked off-shore for decades when it was necessary to avoid tax. I am now looking at alternative banks but always feel 'safer' with an off-shore account rather than a UK mainland account so have been in contact with a Guernsey bank. Meantime I have to take steps to suspend payments of my private and HMG pensions pending opening of a new account.

[PattayaParent]

The problem with non residents holding onshore UK accounts will become apparent when it's time to pay inheritence tax.

I ditched HSBC many years ago and now bank with Standard Bank IoM.

[MyFriend You]

This is not directly pertaining to that HSBC problem....but it may be of interest to all.

I have had an account with a small regional bank in the U.S. for many years...I live in Bangkok and they know my mailing address.

Last month....about 25 June...I recieved a letter from that bank informing me that any telephone or fax transactions....transferring funds from that bank to my Thai Bangkok Bank account for example....must be confirmed by using a new seperate PIN number. With that letter I also recieved that PIN number.

I have a long-standing monthly transfer agreement with that bank (with I just re-signed and filed with that bank in May 2012) which allows me to recieve an agreed upon amount of funds sent to my Bangkok Bank account each month. SO FAR, that agreement is still working.

But now, if I want to make a transfer by, for example, a telephone call to my U.S. bank requesting funds transferred to Bangkok, then I must:

1. Provide the correct answer to our agreed on list of "security questions" answers (been that way for years).

2. But NOW also provide that new PIN number during that telephone call.

I have a MasterCard ATM/debit card from that bank also which I have used to purcahse on line also....so far it's still working.

But the real point I want to make is that many banks....even this relatively small regional bank in the U.S. are adding another layer of "security validation" to their customers that make transfers....especially those overseas.

So everyone, be prepared....I think it's going to get more difficult to make transfers, if my experience is any example.

The good old USA has placed a heavy restriction on HSBC off-shore banking, appears on a whim, the UK govt may follow suit..........We got a warning about HSBC as now, all transactions are heavily scrutinized, there are a lot of US citizen ex-pats with HSBC off-shore accounts, I closed my account and went with Siam Commercial Bank - my retirement check goes straight into that bank via a New York affiliate - cost $20 a transaction, up to (so far) $9,000 its worth it to me to "keep it simple" the poster has lost access to his money because "they sent him a check" you live in Thailand, get an international recognized Thai bank account and "Life is simple" 12 years on now and no problems................I even transfer money to a bank in Vietnam with a phone call - $20 a transition and have done so for as much as $30,000. KISS principle "Keep It Simple Stupid"

[MyFriend You]

HSBC have just sent me their "electronic secure key" which is a credit card size ramdom PIN generator. Every time I access internet banking I have to generate a new PIN on this little device, that looks like a small calcutator. This came from Jersey where I have an account. Over and above that all seems normal.

Actually if you check the "from" address on the package it looks more likely it came from a warehouse on the outskirts of London!!

Or LAGOS, NIGERIA

[PETERTHEEATER]

I have, at last, received a communication by e-mail from HSBC explaining the reason why my account was closed without consultation.So, this means that those of you who bank with HSBC Channel Islands or Isle of Man will have to be resident there or YOUR accounts will be closed too.

Here it is verbatim:

Dear Mr XXXXX

Thank you for your recent email about the closure of your account. Please accept my apologies that you feel you have

been poorly treated and I hope that I will answer your concerns in the following email.

HSBC Bank plc have made a policy decision to withdraw banking facilities for customers who are not residents of

the Channel Islands and Isle of Man. As previously mentioned the decision to withdraw your banking facilities

was made only after very careful and detailed consideration of all relevant factors.

At this stage we wrote to you to make you aware of these changes and provided a notice period for you to enable you

to make alternative arrangements.

Without wanting to reiterate the points covered in our previous correspondence I would like to confirm that this

is a commercial decision and in no way reflects the way in which you have operated your account or the value of your

relationship with us.

As you have stated your account was closed on the 13th July with a cheque for the remaining balance sent to you on the 17th July. We would ask that you wait for four weeks from this date to allow for delivery from the UK. If your

cheque has not arrived at this stage I would ask that you contact us to request the cheque be cancelled and a

replacement ordered.

You have also mentioned that we did not use the instant message system on Personal Internet Banking to contact you regarding this matter. I can confirm that all of our customers affected by this decision have had written

correspondence informing them of this and that we did not feel the instant messaging system was appropriate for this communication.

You have indicated that you will be sending a letter of complaint to us regarding this matter. Please note that

this email constitutes our final response and if you remain unsatisfied with the banks action you may be entitled to

raise your concerns with the Financial Services Commission. Please refer to the following websites for further details: www.gfsc.org or www.gfsc.gg.

Yours sincerely

Emma Long

Area Service & Sales Manager

[Expat Financial Adviser]

Unfortunately HSBC are not the only bank that have done this to expats in Thailand (and in Europe). Try Standard Bank in the Isle of Man, I understand that they have no intentions of closing accounts (rather, they prefer people to open accounts with them!)

I do have the account opening application form. PM me and I will email it to you.

Mark

[Isan Farang]

A lucid and informative post. Thank you.

Yes, I have banked off-shore for decades when it was necessary to avoid tax. I am now looking at alternative banks but always feel 'safer' with an off-shore account rather than a UK mainland account so have been in contact with a Guernsey bank. Meantime I have to take steps to suspend payments of my private and HMG pensions pending opening of a new account.

After checking your post i sent a mail to my relationship manager and she sent me the following info. You can easy open an account with HSBC International but i guess you have had your fill with HSBC.

Any customers living over sea's should hold accounts with HSBC

International which is where your current accounts are held.

Please note that HSBC PLC and HSBC International are two separate entities

where by HSBC International look after customer's living and working

overseas.

[PETERTHEEATER]

Unfortunately HSBC are not the only bank that have done this to expats in Thailand (and in Europe). Try Standard Bank in the Isle of Man, I understand that they have no intentions of closing accounts (rather, they prefer people to open accounts with them!)

I do have the account opening application form. PM me and I will email it to you.

Mark

Thanks Mark but I have submitted an application to a well known Guernsey bank who have been responsive.

[PETERTHEEATER]

A lucid and informative post. Thank you.

Yes, I have banked off-shore for decades when it was necessary to avoid tax. I am now looking at alternative banks but always feel 'safer' with an off-shore account rather than a UK mainland account so have been in contact with a Guernsey bank. Meantime I have to take steps to suspend payments of my private and HMG pensions pending opening of a new account.

After checking your post i sent a mail to my relationship manager and she sent me the following info. You can easy open an account with HSBC International but i guess you have had your fill with HSBC.

Any customers living over sea's should hold accounts with HSBC

International which is where your current accounts are held.

Please note that HSBC PLC and HSBC International are two separate entities

where by HSBC International look after customer's living and working

overseas.

What's in a name. Both HSBC but the 'international' is separate.

Did anyone actually get the letter of notice that was allegedly sent out to affected account holders in April 2012? I still have no idea what the text was. I would expect that it gave an option of switching seamlessly to HSBC International but did it?