Billion-Dollar Bank Apologizes After Accusing Client of Scam in ‘Kafkaesque’ Money Freeze: Report

British banking giant Starling Bank has apologized to a client after reportedly blocking his money transfer and forcing him to jump through a series of “absurd” hoops.

Academic and professor John MacInnes says Starling froze a transfer of about $16,789 that he was making to a friend in Austria who he’s known for over 20 years, the Guardian reports.

The bank immediately blocked the payment as “suspicious” and then proceeded to ask MacInnes to explain the reason for the transfer and provide evidence for it – including a recording of a Zoom conversation with his friend discussing the transfer.

Says MacInnes,

“Conversations with their fraud team by phone and text over a period of several hours became progressively more Kafkaesque, including the bizarre suggestion that Zoom conversations with my friend could have been generated by scammers using AI…

When I eventually managed to speak to a person, he candidly admitted that he was sure that no scam was involved, but still demanded to see my Austrian’s friend’s tax bill, and past examples of our correspondence.”

The professor eventually became so fed up with the bank that he requested that he close his account – but Starling said they had already froze his account and blocked him from using it.

“They said they had blocked it because there would be a risk that I would then make the transfer by other means. It was completely mad…

I completely understand that banks have a duty to vet payments for money laundering and scamming, but I feel the demand to share personal correspondence to prove that someone I say is my friend smacks more of the Stasi than due diligence.”

After being probed by investigators from the Guardian, Starling, which had roughly $19.5 billion in assets, responded and says it went overboard with MacInnes.

Says Starling,

“When we see a payment supported by a narrative commonly associated with romance scams, we seek additional information from the customer to support verification that this does not relate to fraud…

We accept that, having warned him, we went too far in the information we requested he supply to us. We are very sorry. We have unfrozen his account with immediate effect so that he can make the payment or close his account. We are conducting a thorough investigation of his complaint and we will ensure that we use any findings to improve our processes and procedures for other customers.”

 

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