Why are our state-owned banks asking customers about their politicial affiliations?

Verity

That is absolutely chilling. Thank you, Fraser.

I should add, chilling but not surprising given this grotesque government.

Nigel Bradshaw

What is really terrifying is that the "useful fools" in the RBS who ask these questions evidently have no insight at all into the sinister nature of what they are doing.

molesworth 1

It's either "Why our state-owned banks are asking customers about their politicial affiliations?" or
"Why are state-owned banks asking customers about their politicial affiliations?" Take your pick.

David Boothroyd

So in other words the call centre staff made a mistake, and that mistake had nothing to do with the fact that UKFI owns more than half of RBS.

Chris

It's an enormous deal. Fear of this sort of thing is one reason why we don't want nationalised banks. It's just a surprise they've started so quickly. The banks should be back in the private sector as soon as possible.

Publius

Bravo, Mr Nelson. This kind of casual info gathering certainly is a very big deal indeed. Only those who are ignorant of history could assume that this vast interconnected network of personal data that is being gathered is not a risk to our liberty.

Do people forget that Weimar Germany was one of the most liberal places around? And the government that followed it used the personal data gathered by the German state to round up the Jews, and anyone else it wanted.

JohnAnt

'So, Mr Mugabe, are you a Politically Exposed Person?'
'Why no, my friend.'
'Thank you, that seems to be in order.'
[Cat laughs]
Honestly, 12-year-olds ticking boxes.

Tiberius

http://www.shropshirestar.com/2009/03/10/firms-boss-blasts-the-bankers/

Perhaps these guys answered the question incorrectly.

TrevorsDen

Leaving aside the necessity to ask about what a Politically Exposed Person is and what the FSA means- it beggars belief that the RBS (and how many other institutions?) should interpret it in this way.

But should we be surprised at this ineptitude and lack of management - given the current state of what we must still laughably call a 'bank'.

Death or Tory

"I realise that many CoffeeHouses will argue that this will be no big deal..."

Well this one isn't, Fraser!

I had to read your post twice, just to make sure that I hadn't misread it.

So if you now say you are a Conservative voter to the RBS call centre, does that make you a dodgy customer?

Even if you have an Account with them, do you then become ineligible for an Overdraft or a Loan, because of your political affiliations?

Now we know why NuLab wanted to nationalise all the Banks, because now they can turn-off the domestic cash supply to non-Labour voters!

What next, we walk down the street minding our own business and a guy in a uniform points a gun at us and shouts "Papers, show me your papers!"

And so it begins...

dennis

Amazing.
These jobsworths just keep asking the question like those people in Stanley Milgram's experiment kept cheerfully applying electric shocks, just because an authority figure told them to.
Mind you, I do like the improvised explanation that anyone involved in politics is more likely to be involved in fraud.

Dizzy

Jesus wept

RobertD

If the FSA mean this really to mean foreign politicians then the question has no place in account opening procedures for UK residents.

I would also hope that foreign politicians opening accounts in the UK would have their applications reviewed and approved at a much more senior level that the local call centre or branch.

I suppose that we can accept it as an administrative blunder of the highest order by the FSA and RBS. However I hope your expose will make them think more carefully in future.

Aidan

I don't think this is sinister. It's just a complete misunderstanding of what the term "Politically Exposed Person" means. Also quite naive to believe that anyone who was actually trying to launder stolen foreign aid money would give truthful answers to their questions anyway.

Ivan D

So your column (and) post are, well, hysterical, smearing garbage, suggesting something that just *isn't true*? This post, for instance, is entitled "Why are our state-owned banks asking customers about their politicial affiliations?". So here's a question: why are is one of our Spectator scribblers using plural forms when plainly, at worst, only singular forms apply? Or to put that another way - please name the bank *other* than RBS that brings us to "banks" with an 's'? This really was silly, pitiful, overly-pesonalised guff - no better than those silly columnists who self-indulgently witter on about how their BT broadband package isn't working. In fact, it was rather worse than that, as at least those hacks don't infer from their personal snafus evidence for some madly sinister, over-arching government conspiracy. Deeply, deeply unimpressive.

Verity

Also, I believe the bank is being economical with the truth. They are not naive enough to imagine that when they ask someone for their political affiliations, that person is going to answer, "Well, actually, I'm a big supporter of Chavez in Venezuela and am lucky enough to do quite a bit of business with him personally, in US dollars."

Or "Call me crazy, but I really think the generals in Myannmar are on the right track and I fully support them!"

Or, "I'm in George Galloway's party."

So RBS has another motive ...

oldtimer

They will almost certainly have kept a recording if it is as sensitive an issue as they claim.

It reminds me of the occasion I received a letter from a Nigerian gentleman wanting my bank account details and offering a fat commission on a £30 million transfer he wished to make utilising my account. He claimed to be a Chief of Police and therefore entirely trustworthy! Sadly I tore it up at the time - now I think it would be worth framing.

No doubt it is this kind of fraud that the FSA is concerned about. Quite how UK political affiliations come into it is beyond me.

By way of footnote, NatWest (the RBS subsidiary) was my sole bank for about 50 years; until that is that megalomaniac Fred the Shred drove it into the ground. I then checked out Lloyds for a time, only to discover it has another megalomaniac called Victor Blank at the helm. I closed that bank account on Monday.

Ivan D

So your column (and) post are, well, hysterical, smearing garbage, suggesting something that just *isn't true*? This post, for instance, is entitled "Why are our state-owned banks asking customers about their politicial affiliations?". So here's a question: why is one of our Spectator scribblers using plural forms when plainly, at worst, only singular forms apply? Or to put that another way - please name the bank *other* than RBS that brings us to "banks" with an 's'? This really was silly, pitiful, overly-pesonalised guff - no better than those silly columnists who self-indulgently witter on about how their BT broadband package isn't working. In fact, it was rather worse than that, as at least those hacks don't infer from their personal snafus evidence for some madly sinister, over-arching government conspiracy. Deeply, deeply unimpressive.

[PS would it really tax the wit of your IT bods to incorporate a 'preview' function? Which is to say, there was a surplus 'are' in that first effort]

Elf, shocked

I don't think it's 'no big deal' at all - I think it's awful. What kind of Big Brother state are we living in??

A.D.Johnson.

Are our MPs aware of these demands by the FSA? If they are not we must make them aware and lobby them all now.

Tom Freeman

4) What questions are other banks asking customers about "politically exposed persons" or political involvement more generally?

Glyn H

Last year I went to draw £3000 from a deposit account at RBS (at the branch where I have banked for 29 years, far longer than any of the staff have been there) and I was asked "Why, what do you want it for?". This shocking impertenance is due solely to Mr Brown using the cloak of terrorism to introduce state controls to this country which has freedoms far more honorable and ancient that his vile and discredited socialist politics.

Stop Common Purpose

I simply can't believe this. It is appalling.

Steve

I recently had to read up on the money laundering regulations for the small accountancy firm I work for and it does indeed recquire that when you sign up a new client, you must identify any people close to them who are "politically exposed".

I think the thrust of it is that if your mother in law was an MP for example and you set up an account acting on her behalf, that would mean that there was a higher risk of that account being used for money laundering (bribery ect.) and the bank would have to keep a closer eye on it. Its not just banks that have to do this, it is most businesses involved in finance.

To ask if you are mearly a member of a political party is probably taking it a bit far but I could certainly understand why they would need to find out if she was heavily involved in politics.

Im not defending this situation but I think the bank is just following the law (the people in charge of monitoring money laundering at the bank would be personally liable for prosecution if they didnt). If anything is at fault it is the legislation that demands that businesses collect this type of information.

biggestaspidistra

"I realise that many CoffeeHouses will argue that this will be no big deal -"

I bet there will not be one. Chilling, shocking. What have they wrought.

jpkatlarge

It pretty much ilustrates why Not-Sir Fred was able to drive RBS into the ground: how poor must the management be not to have seen how this would appear, and not have queried the wording or the intentions of the FSA? I suspect vast swathes of management are infected with the 'fear of Fred'. And we expect these same managers to bring the bank back to life: we own this shower!

Ian Michie

Absolutely chilling.

In Great britain in the 21st century?

Something is very wrong.

Which public sector personage dreamt this up? Or have I just broken the Terrorism Act by asking?

pp

Unless I am being asked to sign something, I just make up answers to this kind of question.

Dirty data is useless - corrupt it at every opportunity.

Counterpoint

In graphic demonstration of the systemic rot at the core of our society we get

1. The initial denial by RBS

2. the post by Ivan D

Here is the truly septic nature of Labour.

David Ossitt

Fraser.

I realise that many CoffeeHouses will argue that this will be no big deal - it was RBS misinterpreting some guideline.

This is dreadful and I suspect it is as sinister as it sounds.

But staff in banks can obey rules that to any normal person would appear to be madness.

I am a retired bank worker and therefor I am familiar with the systems.

I closed an account a few years back with the Halifax TSB after two incidents related to so called money laundering.

It was my habit to withdraw cash of varying amounts from a savings account once a month and deposit it in my current account at another bank.

At the end of one transaction; the teller who has known me all of her life and attended school with one of my children, told me that in future if the withdrawal exceeded a certain amount I would need to present my passport as proof of my identity.

The second was after I made a cash withdrawal from the cash machine to send the money to my granddaughter; the notes were old and so I took the trouble to stand in line and queue to see a teller to ask for the notes to be changed for new. Sorry was the reply can't do that it's money laundering, what you can do is deposit those notes and then make a withdrawal.

I closed my account!

jwright

nd non repayable before the year is out. Suggest that everyone take Animal Farm for their reading tonight.

David Ossitt

Ivan D.

Why did you feel the need to post your pedantic rant at Fraser twice?

Reading your comment once was more than enough.

Counterpoint

Oh how very very reasonable of you. Steve (March 12th, 2009 4:20pm)

You post is frightening

When the opponents of totalitarian Labour are rounded up, no doubt you will be able to discuss that too in a very reasonable way.

Tim Carpenter LPUK

Very good work and thanks to all concerned for exposing this.

"Politically Exposed Person"? Well, we are ALL "politically exposed" now that billions are being squandered in bailouts, good banks are being forced/wangled to merge and then Nationalised, government debt is rocketing when it is not being rubbed out by QE that dilutes our wealth on the quiet....etc etc etc.

This is disgusting and the very reason why Nationalisation by Socialists and other Statist goons is a very very bad think indeed.

Olaf

Anyone mentioned this to the ICO? Political opinion is sensitive personal data so RBS will be legally required to handle and hold this data properly.

Are these now nearly nationalised banks subject to FOI like any other government organisation?

John Wilkes

The Guidance on the Money Laundering Regulations says that firms should try to identify "Politically Exposed Persons". This term is not defined.

However, it is not intended to cover people who are merely members of political parties, in the way that your mother in law may be a member of the Conservatives, rather it is designed to cover heads of state, their families and the like who because of their positions may be more suspectible to corruption.

The Guidance can be found at:
http://www.bba.org.uk/content/1/c4/98/00/Final_Part_I_030306.pdf

Paragrpahs 5.6.12 onwards.

The question you were asked is clearly misconceived, however I do not think that this is sinister, rather it is the result of mediocre, semi-literate folk at RBS struggling to understand onerous compliance obligations which they are not trained to interpret properly.

THX1138

Fraser to Quote Rorschach from Watchmen.

Paranoid? Is that what they're about me now?

The Welsh Jacobite

Steve is correct, but his interpretation of "Politically Exposed" (and the legal obligations) is way over the top: it only applies to people in very senior positions. Wikipedia gives an accurate definition:

http://en.wikipedia.org/wiki/Politically_exposed_person

Anyone involved in Compliance in a major bank should know this.

John

Civil Contingencies Bill before Easter then, suspending all elections.

Tiberius

Ivan D: I'm sure we'd all like your expalnation to be the true one, but as long as the Mentalist is skippering the SS Gt Britain, it is absolutely right to be sceptical about any event such as this.

Rob Veasey

Leads me to a slightly different point but hey ho, The RBS (or an advert of) says 1.4 billion pounds is available for mortgages to SCOTTISH people, now i believe the Billions pumped in to RBS was UK money, or am I wrong?

Stephen

It's the usual thing. Ordinary citizens are subjected to all sorts of nonsense so that the authorities can claim they are "doing something". I do not believe that any competent money-launderer (or Politically Exposed Person, come to that) would be caught by measures such the banks say they have to take, but they can persecute the general public to their heart's content.

Harry Novak

Sounds to me like a very loose and unacceptable interpretation of (yes, you've guessed it) the most recent EU directive on money-laundering (2006/70/EC): 'Politically exposed persons are
understood to be persons entrusted with prominent
public functions, their immediate family members or
persons known to be close associates of such persons.
'

WheresMyVote

I don't buy the "mistake" aspect. As someone involved in AML and PEP screening, the rules and regulations are absolutely clear. No bank would for a minute risk being exposed to the fines for non-compliance(see LTSB fines for example). These scripts would have been signed off at senior levels of the firm and certainly by individuals that are responsible for implementing policy and regulations.

Trees

Another piece of New Labours sinister jigsaw.

This government is a menace. What I find interesting is, even if there is no sinister conspiracy behind the scenes, why do they behave as if there is one?
Why do they use the language and advance the policies of the new world order? Coincidence?

Neil Reddin

There is a definition of "Politically Exposed Person" (I've blogged it at http://neilreddin.wordpress.com/2009/03/12/fraser-nelsons…ing-experiencefraser-nelsons-banking-experience/ )

Under the definition in MLR 2007 Regulation 14(5), a politically exposed person is a person who:
• Is or has, at any time in the preceding year, been entrusted with a prominent public function by:
(i) a state other than the UK
(ii) a Community institution (e.g. the European Parliament), or
(iii) an international body (e.g. the U.N.) or
• Is an immediate family member or a ‘known close associate’ of such a person.

Ray

"He also forced everyone, small and great, rich and poor, free and slave, to receive a mark on his right hand or on his forehead, so that no one could buy or sell unless he had the mark, which is the name of the beast or the number of his name. This calls for wisdom. If anyone has insight, let him calculate the number of the beast, for it is man's number. His number is 666."

Revelations 13: 16-18

Ken

Brown has form. An emergency debate should be called in parliament , where's the shadow chancellor?

Bluebottle

I'm with Steve on this one. It looks a lot more like a cock up than a conspiracy to me.

The definition of a Politically Exposed Person is: "a person who is or has at any time in the preceding year been entrusted with a prominent public function by a state other than the UK, a Community institution or an international body. It also includes immediate family members and known close associates of such a person."

The implementation of the regulation regarding PEPS in this instance is typical of the common or garden British bureaucrat (in this case the money laundering reporting officer whose job is to implement anti money laundering procedures) when faced with a new regulation: gold plate it so it becomes more onerous and restrictive than actually necessary. This has the beneficial effect (as far as the bureaucrat is concerned) of 1 covering his arse if things go wrong; and
2 overcomplicating matters so he looks important and can build his empire with extra staff and more funding

There actually is an obligation to enquire if a customer is identified as a foreign national if that person is a PEP but that does not warrant questions about political affiliation. Questions regarding PEPs are certainly irrelevant if the customer is a UK or EU national and should not be asked.

Pol-e-tics

"People should be very frightened of the FSA."
So said Hector Sants, FSA CEO, today on the organisation's perceived approach to financial crime.

THX1138

Fraser to Quote Rorschach from Watchmen. Take 2

Paranoid? Is that what they're saying about me now?

Pol-e-tics

The RBS spokesperson said: "staff in some instances have been asked to enquire about whether someone is a Politically Exposed Person. Unfortunately, they have asked the question of political affiliation instead. We have taken all necessary steps to ensure that our customers teams are aware of the difference..."

So when should RBS staff ask the Political Affiliation Question?
And why is this question there in the first place?

Hysteria

it's disappointing and annoying ( I have been on the wrong end of the AML rigmarole) but this story is more about cock-up than conspiracy. Sinister it is not -

Steve

Sorry about getting the definition of PEP wrong, clearly I hadn't remembered the regulations as well as I thought.

Counter point - I can assure you I am definately not a fan of the labour party but I think people are just attacking the bank here because its an easy target.

Pat

Just a thought- Would a member of a government on the international corruption list actually answer yes to that question? Someone at the FSA seriously thinks that corrupt people are honest? And no-one, including whatever management drew up the list of standard questions for the call centre cared what they were asking or why so long as the box was ticked?
Either there is a conspiracy- or more likely the FSA and the bank are incompetent beyond belief (I believe there may be other evidence for this- have there been financial institutions in trouble lately? How much profit are RBS making at the moment?)- in which case both should be closed soonest.

Kevyn Bodman

No big deal?
How on earth could you think that many CoffeeHousers would think that?

It's shocking, sinister and frightening.

It's a very big deal indeed.
I hope other blogs,print newspapers and robust MPs pick it up.
I'm more confident of the first than I am of the other two.

cuffleyburgers

Cock up not conspiracy in this particular case.

However the wider point is well made - that the money laundering regulations, mainly deriving from the EU of course, are deeply illiberal and like most modern legislation, inconvenience only the innocent.

Even in Italy they are starting to bite, and cash transactions are gradually becoming more awkward. I am however doing my best to get around it.

Kevyn Bodman

It most certainly is sinister; but it is also part of a trend that makes people accustomed to answering questions.
I was in the UK last summer and wanted to change £200 in banknotes into Euros at the Bureau de Change of a high street travel agent.
The young clerk, after telling me that she could do the transaction immediately, and after counting out the Euros on her side of the screen, asked me for some personal details.
As politely as possible I refused to tell her.
She told me it was necessary for the prevention of money laundering.
I have no doubt at all that she believed that to be true.
I maintained my refusal and she phoned a supervisor in another town, who authorised payment.
No true rquirement after all, then.

One month ago I was asked for a certified copy of my passport, again because of FSA regulations.
Because it is not convenient for me to go to a British Consulate I had it done at the HR department of my employer.
I work for a major British company with an instantly recognisable name.
The copy had the company stamp and the name and phone number of the official certifying that he had seen the original.
The copy was sent back to me, rejected, get it certified by someone else.

One of the approved verifiers would be a financial adviser.
So until today Bernard Madoff would have been acceptable.(We presumed innocence until today).
Sir Allen Stanford would still be acceptable.

Regulation applied like this is worse than useless.It's dangerous.

Eric

You really are all paranoid halfwits. The fact that the Treasury has a stake in RBS is of absolute no relevance whatsoever. You are implying that the Labour Party is trying to restrict services to its political opponents, which is preposterous and you know it. It would be exposed in a second. You are doing your mother a huge disservice by citing her experience in this way.

TGF UKIP

OK, let's just step back and imagine if the same thing had happened, say, c 1995. What would Blair/Brown/Mandelson/ Campbell made of the situation if the Conservative Government had effectively nationalised a bank that then asked these questions.

Now let's see what Cameron and his gang do with the ammo that Fraser's handed to them.

My bet is, if they're true to form, not a lot.

Tankus

...did Goebbels actually die in that bunker ?

Kevyn Bodman

O/T for the bank but still on the theme of seemingly innocous questions that have a more sinister effect, that of making people accustomed to answering questions.

When flying out of the UK, after clearing security I go to one of the airside shops to buy a bottle of water for the flight.

They want to see my boarding card.

Why?

It's got nothing to do with keeping the purchase of Duty Free goods legitimate.

It's about control,innocent people expecting to be asked and expecting to have to answer questions behind the deceitful screen of 'security'.

I think all this is non-accidental.

PL

Who cares just lie to them -everyone else does including the Saviour of the World.

Hamish

Hilarious that Ivan D makes a huge point about the difference between plural and singular, then blames your IT people for his own blunder.

LD

"What next, we walk down the street minding our own business and a guy in a uniform points a gun at us and shouts "Papers, show me your papers!""

Swap gun for tazer and papers for ID card and you're probably not far from the truth.

Hysteria

what Kevyn said - the broader issue here is around the way we are asked and expected to answer questions. How long before a copper stops you and says "Papers..!"

Verity

The British citizen is being groomed by stealth to bow without question to any demand for personal information.

And yes, how long until a police officer, or a pretend plastic bobbie, or a uniformed park attendant stops you and says, "Excuse me, sir. May I see your ID card, please?" (It'll be polite for the first couple of years, until the public becomes acquiescent. After that will come the snapping of fingers and, "ID card!")

Judge Pickles

o/t But has anyone come up against Paypal's seemingly common method of freezing funds under Money laundering regs. and then refusing to answer emails etc when challenged ?? I wrote to Lord Birt ( director of Paypal ) but he hasn't replied yet!!!

EU meddling once again....

Trumpeter Lanfried

If someone asks me for inappropriate information which they say the law requires, or refuses information under "Data Protection", I make a note of the conversation. Then I write to the organisation concerned. I say, 'I am a laywer, and I would like you to direct me, please, to the relevant section of the Statute.'

The response is always the same: flannel, flannel, flannel, blah, blah, blah.

Glyn H

Thanks Ray, my (30 year old)car has the registration number ---666. It pleases me no end.

Death or Tory

@ Ivan D

You are (still) really Derek Draper and I hereby claim by prize...

James

"I presume the reason why we ask that question is because there is a high volume of fraud in that sector. Where people who are of that sort of nature maybe are inclined to commit fraud."

Is absolute GOLD.

He wasn't wrong, though, was he? At least, not if our political overlords are anything to go by...

Watervole

The stasi are here. Well done Fraser, this is horrendous. I hope David Davis is reading your column.

H

Scary as!!!

james grant

I wonder why Lord Ashcroft has asked a written question dated 27th feb in the Lords as to whether any state controlled bank has been specifically asked to help businesses in trouble in the marginal seats. He probably knows the answer!!!

rmh

What do people expect, the treat 1984 as an instruction manual.

MrDavies

The truly shocking thing is that I am not that surprised.

This is Britain under the nulab regime.

The next election could be the last if they are not disposed of.

Mr Angry

Politically exposed people always used to be those who were in personal danger because of their position.

It seems rather unlikely that RBS could have managed to so badly misinterpret that to mean that they should be asking if people belong to a political party.

Ha'penny

I would prefer if all banking organisations in this country and all Western countries were to refuse to participate in Sharia-compliant finance since, under such banking procedures, a portion of all funds being dealt with MUST go towards zikat which does not simply include charitable (alms) contributions to those in need (and they must only be Moslems in any case) but also 'FOR THE CAUSE OF THE MUHAJIDEEN' (fighting in the cause of Allah) and to FURTHER 'THE CAUSE OF ISLAM'. This means that all sharia-compliant banking institutions are actually contributing, whether their executive boards realise it or not, to funding terrorism, principally against Westerners and assisting in the Islamisation of Western societies because all banks operating sharia-compliant finance must have an 'advisory board' of Moslems (such as Muhammad Taqi Ismani featured in a Times report on the Deobandi sect in Britain in Sept 2007; he is quoted as saying that 'our followers must live in peace until we are strong enough to wage Jihad'; he is also a member of the Dow Jones Islamic Market Indexes Shari'ah Supervisory Board and was a Sharia judge for 20 years in Pakistan's Supreme Court). This is far more dangerous, and happens under the radar, all the time, than politically suspicious questions asked by banks to largely Western, non-Moslem would-be customers.

Ali C

And now we all have our emails kept by our ISP for a year, and we soon will all have to register travel abroad. Even if we're a fisherman or going to Calais to shop for the day.

We, the law abiding citizens, have rights - surely to anonymity and to be unmolested by the state?

Avoir duPois

Hey!
What do you have to hide?
You are not England, anymore.
England is populated by droids ruled by an illegitimate royalty.
Too bad, England.
Too bad.

jaline

"1984" and Big Brother...with a litle bit of Adolf Hitler thrown in.

Rod

Eric seems to miss the point that this is the sort of exposure which highlights the possibilities of such actions even if the action itself is not being undertaken (and how would we know). Ask any top ranking police officer and they will tell you they have the powers to make a police state here tomorrow. Add in the politically exposed information collection (& trade union affiliation?) and suddenly your worst fears can be realised before you can do anything about it. At what point does the nanny state become the Big Brother state?

Its very worrying that financial institutions have any political, religious or any other interest other than dealing with finances... or should be forced into having any by government.

Yes its a cock-up. But the cock-up is that its exposed these dubious rulings and interpretations of rulings.

Bill Smith

Why doesn't someone in media get ONE set of company information, and make ten calls to this bank. In five calls say you are one party, and in the other five say you are another party? The results might be interesting.

Jamie

All this is set out in the The Money Laundering Regulations 2007, although it would take a true cretin to interpret it in the way that they have.

JHM

Pretty soon your government may throw out the secret ballot, which Obama is trying to do here in the US for labor unions with the ridiculously named "Employee Free Choice Act." "Since when are secret ballots a basic tenet of democracy?" was a recent question asked by a labor union boss. Chilling...

arnie

The staff who work in 280 Bishopsgate - pre-programmed by fatigue and mindless regulation they can't think straight. no wonder the mess hapenned.