Latest Payments News: HSBC Fined In Isle Of Man For Violating AML Restraining Order, and more

Catch up on six of the stories our payments compliance analysts have covered lately, and stay up-to-date on the latest news.

HSBC Fined In Isle Of Man For Violating AML Restraining Order

HSBC has been hit with a £300,000 fine in the Isle of Man for continuing to process payments for a customer whose accounts were under a restraining order.

The island’s Financial Services Authority (FSA), announcing the decision, said the civil penalty was reduced by 30 percent due to HSBC’s “full cooperation” and “positive engagement” with the regulator.

The case concerns two related instances of misconduct, one of which was brought to the FSA’s attention voluntarily by HSBC.

In the first matter, HSBC discovered in August 2023 that it had made three recurring payments for a client who was subject to a restraining order under the Proceeds of Crime Act 2008.

The order restrained the client from accessing the funds in the relevant accounts, but permitted certain monthly payments to be made.

HSBC had controls in place to block the unlawful payments, but to process the permitted payments, these controls had to be lifted and manually re-applied each month.

In August 2023, three non-permitted payments were made due to HSBC’s failure to re-apply the controls.

However, the FSA credited HSBC for its “good detective controls” in identifying the breach, and for its “prompt notification” of the breach to the FSA and the Attorney General Chambers.

The funds were recovered in full, within two months of the notification, the regulator said.

In the second matter, in September 2023, the FSA became aware that HSBC had issued a cheque to a client without the required consent from the Financial Intelligence Unit (FIU).

Following a request from the FSA, HSBC subsequently submitted the relevant notification.

The bank also explained that, following a review of the customer relationship, its risk committee had decided to exit the relationship and close the customer’s account.

HSBC has proactively brought about operational changes to address the two instances of misconduct.

Elon Musk Calls For Abolition Of CFPB

Tech billionaire Elon Musk, who is set to play a key role in the incoming Trump administration, has called for the Consumer Financial Protection Bureau (CFPB) to be scrapped.

“Delete CFPB,” Musk said in an X post on Wednesday (November 27). “There are too many duplicative federal agencies.”

Musk entered the debate on the CFPB following an appearance by venture capitalist Marc Andreessen on the Joe Rogan podcast.

Andreessen, co-founder and general partner of a16z, alleged that the CFPB is “terrorising” Americans by interfering in the financial sector.

He also described the CFPB as the "personal agency" of Senator Elizabeth Warren (D-MA), a member of the Senate Banking Committee, who he said has taken control of it.

Andreessen complained about what he calls Operation Choke Point 2.0, a pattern of politicised interference and discrimination in the financial sector, including the denial of banking services to certain groups and individuals.

“It’s hit the tech world hard,” said Andreessen. “We’ve had like 30 founders debanked in the last four years. It’s been a recurring pattern and this is one of the reasons we ended up supporting Trump.”

He noted that the fintech and crypto sectors have been particularly affected, with "no due process" and no means to appeal against a debanking decision.

The original Operation Choke Point, launched in 2013, was a Department of Justice-led initiative to impose greater oversight on firms thought to pose a high risk of fraud and money laundering, such as firearms dealers and payday lenders.

Jarod Facundo, journalist at corporate investigations news site The Capitol Forum, also joined the conversation on X.

Facundo was discussing the debanking of political and religious groups and their members, and the CFPB’s lack of authority to intervene.

He cited one example, which came to light during litigation earlier this year, where the CFPB was unable to investigate the potential debanking of Christians, despite having grounds to believe that discrimination had taken place.

Andreessen sees the CFPB as an agency that practices selective intervention against unfavoured targets. He complained, for example, that the CFPB had shut down LendUp Loans, a fintech backed by Andreessen's firm, in 2021, and forced it to return almost $40m to customers.

HSBC Shuts Down Retail Payments To Russia, Belarus

HSBC has announced that it has stopped processing payments to or from Russia and Belarus for all personal banking customers.

The announcement was communicated to HSBC customers in all markets, including the UK.

“Any payments processed through HSBC involving Russia or Belarus may be held for further review, and may in our sole and absolute discretion, be rejected and the funds returned,” the bank said.

“If you plan to make or receive payments to or from Russia or Belarus, please make alternative arrangements.”

Speaking with Vixio, a HSBC spokesperson said that facilitating retail payments to Russia and Belarus has become untenable in light of the "unprecedented" volume of sanctions and trade restrictions against the two countries.

The news coincides with an announcement from the US Treasury’s Office of Foreign Assets Control (OFAC) that it has sanctioned Gazprombank, which is partly owned by the Russian government and is a key player in the global energy market.

“Gazprombank is a conduit for Russia to purchase military materiel for its war effort against Ukraine,” OFAC said in a statement.

“The Russian government also uses Gazprombank to pay its soldiers, including for combat bonuses, and to compensate the families of Russian soldiers killed fighting Putin’s brutal war against Ukraine.”

OFAC also designated six foreign subsidiaries of Gazprombank, 50 Russian banks with international connections, more than 40 Russian securities registrars and 15 Russian finance officials.

“Today’s sanctions targeting Russia’s largest remaining non-designated bank, as well as dozens of other financial institutions and officials in Russia, will further diminish and degrade Russia’s war machine,” said US Treasury secretary Janet Yellen.

“This sweeping action will make it harder for the Kremlin to evade US sanctions and fund and equip its military.”

Dutch Authorities Urge Victims Of 'Pig Butchering' Fraud To Speak Out

In a new campaign, the Dutch Banking Association (NVB), Victim Support Netherlands, and police are calling on victims of "pig butchering" scams, which combine dating fraud with investment fraud, to break their silence.

Victims often lose significant sums — the authorities suggest the average loss is more than €25,000, with some reaching hundreds of thousands.

Shame is proving a significant barrier to reporting, as victims feel embarrassed both by the financial loss and the emotional manipulation.

However, the authorities have stressed that this is a sophisticated crime and encouraged victims to come forward.

Reports to the Fraud Help Desk are rising, with cases expected to exceed 160 this year, although the true number of victims is believed to be far higher.

"Anyone can fall victim to this devious form of fraud," said Rebecca Smits, a representative of Victim Support Netherlands, in a media statement.

"Feelings of guilt and shame are human, but it is still advisable not to walk around with this alone. It can cause you to no longer trust others and even lead to depression. You don't have to do it alone, support really helps you.”

EPC Calls For Interest In Verification Of Payee Service Providers

The European Payments Council (EPC) has announced a call for interest from organisations aiming to offer routing and/or verification mechanisms (RVM) services under its Verification of Payee (VOP) scheme.

Set to launch on October 5, 2025, the VOP scheme will help payment service providers (PSPs) across the EU and EEA meet regulatory requirements for verifying payees in instant credit transfers, which is a compliance requirement of the Instant Payments Regulation (IPR).

Interested parties wishing to be among the first listed as VOP-scheme compliant RVMs can apply before December 20, 2024.

Outro text:

‍

Want to know more?

‍Request a demo with one of our experts today to gain full access to the stories we cover - and much more - and start learning how you can make compliance a competitive advantage for your organisation.