Apple and Goldman Sachs don’t trust their new banking customers

Users of Apple’s new Apple Savings service, launched in April in partnership with Goldman Sachs, are reporting serious delays in withdrawing or moving their deposits. According to the Wall Street Journal, customers have struggled for weeks to recover amounts as high as $100,000 frozen in Apple Savings accounts.

The explanation for the delays is reasonable – at least, by the bizarre standards of the mainstream financial system. In many cases, the frozen funds were subject to a “security review”, that is, Goldman ensures that its depositors are not involved in criminal money laundering.

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The absurdity of this is layered and nuanced, like a blast of clumsy, anti-customer banking practices. One of the triggers for such a bank security review, you see, is making a large deposit into a new account. But Apple has heavily marketed the above-average interest rate on its savings service (4.15%), so it shouldn’t come as a surprise that people are depositing large sums – which is also kind of what normal people already do with a savings account? And the savings service only launched a few weeks ago, so all accounts are new.

In other words, if you’ve followed Apple’s marketing cues and opened a big new savings account managed by Goldman, the default assumption built into the system seems to be that you’re a money launderer whose funds must be frozen immediately and indefinitely.

It becomes even more of a dystopian nightmare when you look at the specific people targeted by Goldman’s anti-money laundering effort.

One of the victims who spoke to the Journal was Antonio Sanchez, a Grammy-winning musician who collaborated with Dave Matthews and Trent Reznor. This is someone who a quick Google search and a phone call could have easily determined is unlikely to be a money launderer. But instead, Sanchez, like the other profiled customers, ended up struggling through a Kafkaesque customer service maze for weeks, trying to lose a frozen $100,000 earmarked for a down payment on a house. Sanchez ended up having to borrow money from his mother-in-law: truly, a nightmare beyond nightmares.

What if you’re not a Grammy winner? Well, that’s definitely not going to improve the way you’re treated. The only solution that worked for a few of the profiled clients was… to get the the wall street journal call Goldman about their problems. This customer service solution is not available to most of us.

Goldman Sachs is not a retail-focused bank and has struggled with its efforts to serve small customers. But the incident also follows a larger shift in traditional banking, away from any kind of meaningful customer service, towards an increasingly automated, disinterested and even hostile approach to its retail depositors.

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What makes this anti-customer bias truly toxic, however, is that it is combined with a completely opaque anti-money laundering regime that appears to have uncontested effective control over every bank deposit in the United States. Take one misstep – something that even looks vaguely suspicious to a dumb algorithm or an underpaid data analyst – and suddenly your property is “under review”, until they say the opposite.

This suspicious activity apparently now includes “opening a bank account” and “depositing money into it”.

So ask yourself this. When your bank doesn’t care who you are and has the power to freeze your funds at any time, without explanation, for an indefinite period… does that money really belong to you?

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