Holvi Blog for Makers and Doers

Why does Holvi sometimes have to block accounts?

Entrepreneurship · 29/11/19 08:53 · Sascha Bross

why-holvi-sometimes-has-to-block-accounts

From time to time, affected customers reach out to us on social media asking why their account has been blocked. As with other payment institutions and banks, we are subject to very strict regulations that may require us to take action due to security reasons, or if we suspect any suspicious activity. For the sake of transparency and to dispel rumours, we’re outlining here the reasons behind account suspension.

 

Customer protection and crime prevention require us to occasionally suspend accounts

First, account suspension is very rare, meaning it is very unlikely that the average customer account will ever be suspended. However, it is important to note that the consent of a user is not needed to suspend an account. 

We are a Finnish licensed payment institution, which means that we have strict regulatory obligations. We operate in Finland and the EU under a license issued by the Finnish Financial Supervisory Authority (''FIN-FSA''). In Germany, our branch operations are also, where applicable, supervised by the German Financial Supervisory Authority (''BaFin''). As a result, we are subject to enhanced safety standards. 

So what does this mean in practice? 

 

We need to know who our customers are

KYC or ‘Know your customer’, is the foundation of our customer relationships. As a licensed payment institution, we are required to identify and verify each of our customers, as well as understand the nature and extent of their businesses. We ask for this information when a customer opens a Holvi account. If this is not provided, we are unable to offer our services.

Of course, we understand that circumstances can change after signing up for Holvi. For example, your status as a freelancer or business may shift over time, which could mean that it no longer complies with the initially agreed Terms of Service. If this happens, and your business becomes one we no longer support, it can be that we are no longer able to provide our services. We understand that having to close an account after a long customer relationship can be frustrating, though in these cases we have no other option.

 

Preventing money laundering, terrorist financing and other criminal activities

Financial institutions have a legal obligation to ensure the funds they carry are not used for money laundering, terrorist financing or other criminal activities. To ensure we are compliant with applicable laws and regulations, we sometimes ask for additional information about the origin or source of funds that are transferred to an account. This may sound intrusive from a customer perspective, but criminals misuse accounts in the most imaginative ways possible to slip under the radar. Therefore, if we have reason to suspect unusual activity, the account may be suspended.

 

We want to protect your assets

If we notice any unusual activity on your account, or suspect that your account has been compromised or that you’ve been a victim of identity theft, we review this internally and will suspend your account in the meantime. In rare cases, such as unauthorised access to an account, it is in your best interest to have your account blocked as soon as possible. Naturally, in the event of a false alarm, we apologise and undo the suspension. We encourage you to read more here about how you can help secure your account.

 

The authorities can ask us to freeze or suspend an account

Occasionally, governmental authorities like the police or law enforcement contact us requesting that an account be suspended. And in rare cases, we are obliged to suspend an account in order to comply with a court order (e.g. when a customer or company has been declared bankrupt, as outlined in our Terms of Service).

 

We do not benefit from suspending accounts

Closing or suspending accounts is not in our interest, but it is occasionally necessary to protect our customers and prevent misuse and crime.

We have a social responsibility towards our users and, on a wider scale, to fight crime. We strive for strong corporate governance that goes beyond adherence to laws, regulations and standards; we have built a rigorous compliance system which helps us detect irregularities fast and take action immediately. Conforming with the law and setting our own high standards ensure that all our stakeholders, customers, staff and society alike are protected as comprehensively as possible.

 

Rumours are spreading in social media – why don't we comment?

Occasionally, account suspension causes unhappy users to turn to social media to voice their concerns and frustration. Rumours are easily started, and misinterpretations often fan the flames and make things worse.

Addressing rumours can be difficult, as we can’t publicly comment on individual customer cases (even if the customer gives us permission to respond – doing so would be a breach of customer confidentiality and our legal disclosure obligations). We are strictly regulated and must comply with specific regulations, especially those surrounding customer data. Social media is also not the best place to deal with sensitive financial matters; we respect the privacy and banking secrecy of our customers, and therefore prefer to address customers directly. 

Ultimately, we encourage approaching the rumours circulating in social media with a grain of salt. Since we can't comment on the cases, often the story coming out of social media is one-sided.

 

Preventing crime prevents us from telling all the reasons openly

Why am I not told clearly why my account has been suspended? 

While we can fully understand that a user might be frustrated at not being told why their account has been suspended, unfortunately we are unable to openly explain the reasons while preventing criminal activity. If we tell the reasons openly, criminals would quickly learn to work around them.

Also, if the authorities suspect that a crime is being committed, we must not "tip off" the client and therefore possibly assist them in criminal activity. Of course, this can cause confusion in cases where it ultimately turns out that no crime has occurred. Unfortunately, we cannot know in advance whether an alarm is true or false. Therefore, we have to handle each case with caution.

While we can't openly tell you all the reasons for account suspension, we recommend that you familiarise yourself with our Terms of Service and Acceptable Use Policy. We can’t point you to the exact condition or give a clue of the suspected crime behind a suspension, but you might find our general guidelines in these two documents helpful.

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