ThePokerCapitalist has some very disturbing news for the poker community, HSBC is “exiting” their poker clients. I’ve heard rumours of this in the poker community but only recently have I been able to obtain proof as well as more details surrounding the rationale. I was tipped off by a former professional poker player in Canada (who now plays infrequently), that HSBC no longer wanted his business because of his involvement in “the online gaming industry”. You’ll see further along in this article a redacted version of this information. This is a disturbing development for any and all poker players who have bank accounts with HSBC and leaves them at the whim of the bank. Furthermore, this is a disturbing development for any and all HSBC clients worldwide.
We know that HSBC is taking the following steps when they close poker players accounts.
You can see proof of the ^ in the following document ThePokerCapitalist was able to obtain.
Generally, HSBC does not provide clarity as to why they are closing accounts / “exiting” clients. However, in this case after extensive discussions between the two parties some additional clarity was provided. See the below email.
“Thank you for your patience while I submitted all of the information you provided previously. Given your current connections to the online gambling industry as well as your previous history of being a professional poker player, HSBC Canada has made a decision to end our banking relationship with you. At this moment, the high risk nature of these industries is outside of our target market and risk appetite. I want to thank you for giving HSBC Canada another chance and for being our customer over the last 8 years.
We have extended the account closure date to March 27th, 2017. Please take the necessary steps to re-route your automatic transactions to another Financial Institution by that date. This applies to all of HSBC Canada affiliates including HSBC InvestDirect and our MasterCard products.
Premier Relationship Manager | HSBC Bank Canada
Mutual Fund Advisor, HSBC Investment Funds (Canada) Inc.”
Generally, the answer to this question is yes. Case law in Canada has made it clear that banks have an inalienable right to a bank account and banks can insists clients leave. The banks account agreement will determine the rights of each party when there is a closure. HSBC’s Terms & Conditions clearly state that they retain the right to withhold service from parties they don’t want to be involved with. If you are interested in the case law I suggest taking a look at the following.
2 RCG Forex Service Corp v HSBC Bank Canada, 2011 BCSC 315 [“RCG Forex“]; B-Filer Inc v Bank of Nova Scotia, 2005 ABQB 704; B-Filer Inc v TD Canada Trust, 2008 ABQB 749.
3 Lovric v Toronto Dominion Bank, 2008 BCSC 478 [“Lovric”]; Mechar v Bank of Nova Scotia, 2011 BCSC 500
This decision has not been made lightly. There is a tremendous cost to the business and the reputation of the bank who they exit clients. In some cases the customer lifetime value of these clients is extremely high. However, regulatory risk is also extremely high and there have been some major fines levied on the banks by government. So, the simple answer is senior risk managers at HSBC have decided the risk from government fines and penalties is too great to allow any kind of “high risk” activity within the bank. Poker/ online gaming transactions fall into the “high risk” bucket as do some other activities. In the ^ case with this particular person he appealed the decision internally and took it to the most senior people in the bank. However, the final decision came from “the highest levels” of the bank and there was no overturning it. Below is a link to Canada’s anti-money laundering rules which I believe to be at least partially responsible for the ^ – an unfortunate unintended consequence…..
HSBC demands repayment in full. I’ve written extensively about mortgages for poker players in the past, but I haven’t been able to confirm what HSBC does for clients who have mortgages with the bank (which would be awful and potentially devastating) but its possible they close them. Obviously, being force to repay a large loan or find another lender in a short period of time is not a good situations to be placed in. Note: In the article that was mailed out HSBC insisted on immediate and full repayment of their credit lines/HSBC MasterCard.
In order to avoid getting into a squeeze it is advisable to have a minimum of two bank accounts. This will also help in situations where you are not provided enough time to open additional credit lines. Keeping debt levels low and liquidity high is probably a reasonable course of action to take as well.
IMO yes, nothing good can come of a bank closing your accounts. It would seem very prudent to move away from HSBC if you have any online gaming transactions occurring in your accounts and/or other “high risk” activities. Other potential high risk areas include but are not limited to pay day loans, marijuana stores, real estate, import/export businesses, etc. Given the aggressive stance that HSBC is taking with respect to “high risk” activities it would be best to look elsewhere for your banking needs.
IMO the answer to that is yes. Ultimately, when these actions are taken against an entire group of people its not business it is discrimination. HSBC is discriminating against poker players and other “high risk” activities. I find this news to be disturbing and I hope that you will share this article with others.
P.S. Be sure to check out my book Exploitive No Limit Holdem and get your copy if you haven’t already!