Bank of America froze our account because we use TransferWise

30 points by dkobran 2 months ago

TL;DR Bank of America feels threatened by TransferWise and penalized us for using them.

Paperspace is a semi-remote company with employees spread around the world. Several years ago, we discovered TransferWise as an easy and affordable way to make international payments. We have since been using the tool to pay all remote employees. For those of you that are not familiar with TransferWise, it’s a UK based startup with the mission of lowering the costs associated with international money transfers. The crux of this problem is that banks use a fake exchange rate (made up by the bank) which costs companies collectively billions of dollars. It’s a dubious practice which IMO should be regulated but that’s a topic for a separate conversation. In any case, TransferWise is loved and trusted by thousands of organizations like ours and is backed by leading investors such as Richard Branson, Andreesen Horowitz etc. They have over 1,000 employees and move over $4B per month. In other words, they are legitimate.

So, what happened? My guess is, Bank of America decided it didn’t like that using a competitor and decided to freeze our account. We lost all ability to transfer money and had to scramble to pay vendors, make regular payroll (in the US) etc. To get up and running again, we were instructed to fill out a 16 page form on paper about what our business does that we had to wait up 48 hours to regain access to our money. We are in the midst of this process. We were on the phone all day yesterday and were told there is no way to expedite this process and that we would just have to wait until they got around to validating the information in the form.

I wanted mention this here as a warning to all TransferWise users and to hopefully draw attention to this nefarious practice such that banks stop the nonsense immediately.

Happy to answer any questions.

sarcasmatwork 2 months ago

Take all of your money out of BoA (Bend Over America) and open an account at the local credit union. You'll be happier in the long run.

foobarbazetc 2 months ago

We use Chase and use USForex for our FX payments. No issues to report.

A bank can’t lock you into their shitty FX product. I would look at a way to have TransferWise “pull” via ACH instead of you pushing the money (if they support that). Banks usually don’t care about pulls.

  • dkobran 2 months ago

    This is good advice but we actually do pull from BofA. The mere act of using TransferWise is what triggered the freeze. Or at least that's what I was told.

    • raincom 2 months ago

      I think, AML vendors that sell their software to banks are adding ACHs/wires to international transfers (transferwise, xoom, ria, etc).

rafiki6 2 months ago

My bet is this is related to AML (anti-money laundering) more than BAML being vindictive. Especially since you were using it to pay people remotely. Not forgiving them for poor customer service, but that's what it seems like to me.

  • chungleong 2 months ago

    Mine too. Frequent transfers of amounts below the $10000 reporting cap will definitely trigger an alarm at the bank.

raincom 2 months ago

Are you wiring from your BofA account to TransferWise's Wellsfargo account in NY? Or are you doing ACH for amounts < $10K?

There is another explanation for BofA behavior: their AML software triggered your account.

codegeek 2 months ago

Your TL;DR should be: Don't use Bank of America. Most major banks these days are not a good idea. Instead, look for relatively stable but smaller banks or even credit unions locally. They will not only treat you better but won't do crazy shit like that. Only disadvantage is that they may have some outdates processes/systems but in terms of them not screwing you over with stupid so called "policies", you are better off.

  • dkobran 2 months ago

    We've definitely considered this and the only reason we haven't is that BofA offers a relatively nice mobile app, web interface, support (24/7), and permission management (roles) for our team. I agree in principle but it's a tool that we actually spend a non-trivial amount of time in so the experience of interacting with the service is something we, unfortunately, can't fully discount.

    • Nextgrid 2 months ago

      Consider switching fully to TransferWise by using their "Borderless" account.

rvnx 2 months ago

Well, TransferWise has fees and "fake exchange rate" as well. Forex is not a centralised market ;)

They are doing the same as any bank or forex broker in that regard.

duiker101 2 months ago

I too think it might be some AML warning but at the same time, use it as a reason to drop BofA.