Internet fraud and banking security gone mad

Few weeks ago I wrote about the steep rise in reports referring to Internet fraud and online banking fraud and how careful one needed to be when taking those things at face value. Even respected financial publications as the Financial Times enter into the trend of publishing and amplifying reports that talk about increasing Internet fraud but recognize “the absence of comparative data from previous years”, which makes extremely difficult to prove or disprove that what companies with vested interest in the topic are saying. But governments and companies react…and heavily handed (even stupidly)…and today I’ve had a clear and ridiculous example of how bad things are going. Taking into account that I have lived in several countries, keep family and banks accounts in most of them and I travel quite (very) often, my bank account receives and send money in a very international and sometimes strange pattern. You would expect that my bank, after six years of having an account there, would know that and would react to it accordingly. However, today after making some international transactions (for which I notified the bank before hand) my account was frozen. I spoke with the people in security (by phone) and they “defrost” my account. Some minutes later, after other transactions, it was frozen again, and there is when the situation turned Kafkaesque, surreal and very bizarre. I went to a branch of the bank to explain the situation and, after half an hour on hold (yes, while calling from inside the bank) a person told me that my account had been frozen due to suspicious activity but that she couldn’t tell me the exact reason why, she couldn’t unblock the account and she couldn’t connect me to anyone that could either unblock it or tell me what was going one…somebody would contact me….so, I decided to speak with a personal banker. The reason for that is very simple: banks don’t own the money, they hold it under a mandate from the owner, vg the client, vg me. So, if the client, vg me, appears in personam in a branch, has prove of identity and gives a mandate, that should be the end of the story, regardless what the situation could be, specially when the client, in personam, clarifies that all the suspicious transactions have been carried out by him/her…but it seems that is not anymore. Somebody in security told the personal banker that a special investigations unit had the case so there was nothing that anybody could do until that unit decided to contact me (?!), even after I certified that the transactions in question were genuine…so, what are they going to investigate? The thing went beyond surreal when I said that I wanted to close my account and they told me that I couldn’t until this mysterious unit decided that everything was OK…
The legal issues are more complex that one may think because one may tend to imagine that they are fulfilling some contractual obligations and that they have some rights given my me in the contract, but the buck stops when the client/owner is present and certifies the absence of fraud. Any contractual clause giving the right to the bank to not carry out the mandate of the client in order to “protect” the client against the wishes of the client would very likely to be deemed unfair under the UCTA 1977 and the subsequent European legislation. The problem is that it seems that the system is designed in such a way that there is no way to override it even when the legitimate owner of the money wants to do so. Is like having a plane in automatic pilot, the automatic pilot is going to crash the plane against a mountain by mistake and the pilot had no right to take the controls…total madness.
Some of the transactions that I will no be able to carry out involve foreign currency…will the bank be liable for the difference in exchange rate that may occur while its carry the unneeded investigation? (the pound keeps loosing value against almost any serious currency in the world) What about loss of enjoyment? Some trip may have to be cancelled…and the list is very long, but banks keep justifying that unacceptable behavior (is like having somebody’s money kidnapped) with the excuse that Internet and online banking fraud is on the rise…why not using some of the funds wasted in unnecessary investigations into educating the public so most of the fraud, which is based on convincing people more than actual technical expertise, never takes place…