International travel, globalization, proliferation of the Internet and global entrepreneurial innovation are all hallmarks of the age we currently live in. In my early childhood I always had the perception of America as being the place of milk and honey where the roads were paved in gold. I think I had gained a much more realistic perception by the time I set off on my first International travels at the age of 22. Having lived in and out of Florida working on super yachts during this time and having spent a few months at Harvard University in Boston as well as having visited the US a number of times since, I have grown fond of the real US and, although I love my home country of South Africa, I even see it as a strong potential candidate to live and start a business in the future.
This blog is meant to be a platform to share our travel experiences with the world. While this post does not exactly fit within that mantra, it is the best forum I have to vent my frustration with the US banking system. And it kind of does fit in with world travel and some of the problems encountered with trying to live too much of a “global” lifestyle, so a warning: stop reading now if you do not want to hear me whining about my poor experience with Chase Bank.
Having encountered a number of problems in the past due to not having a US credit card when trying to do various things / research online, I was delighted at the apparent ease of opening a US bank account with Chase Bank when I was in New York last year September (I was attending an Internet conference hosted by a large US based hedge fund that is the largest shareholder in three South African Internet businesses I am invested in). All I needed to open the account was my passport and proof of my residential address in South Africa, which I happily provided. I deposited a few hundred dollars cash (from my South African travel allowance). Together with my account, I opted for a Visa debit card, which promptly arrived at my South African address a few weeks later. I eagerly set up my US PayPal, itunes and Skype accounts. I subsequently paid for some services in the US using PayPal and I bought a domain using Escrow.com amongst a few other things, all of which was not possible without my US bank account and debit card. Yay! At last, my US banking problems were over.
Earlier this year, when I sold some shares in one of the businesses I am invested, I thought how lucky I was to have a US bank account (there were a number of purchasing shareholders all scattered around the world and the sale price was in USD so I could consolidate all the payments and then send one bulk payment to South Africa getting the best possible exchange rate). This is where my problems started, as it turns out there is supposedly a wire transfer limit for individuals set by federal law in the US, so that meant I would have to make up to 35 individual transfers to get the money to South Africa (and only one transfer is permitted per business day with bank charges of $40 per transfer). Of course, calling the Chase help line was no use. However after making contact with the very friendly lady at the branch from Chase Bank who helped me open my bank account, she helped me upgrade (for an additional monthly fee) so at least I could transfer the funds in 9 transactions (this apparently was the absolute limit). I still find this bizarre. I live in a country that has a highly regulated banking system and I haven’t come across this before. So much for the land of the free?
While, due to South African Reserve Bank regulations, I had to bring the funds from the sale of the shares into South Africa, at the same time I needed to take money out of South Africa to make an offshore investment. Fortunately, if you are traveling outside of South Africa you have a travel allowance of R1 million per year, which upon legal advice I found could be used to make this investment as I was traveling to the US. Having previously inadvertently fallen foul of the strict South African Exchange Control regulations, I was determined to do this 100% legally (although it seemed such a waste to bring money into South Africa and then almost immediately take it back out again – only making money for the banks on the exchange rate spread and bank charges).
So I jump through quite a few hoops to get the funds legally out of South Africa and the funds have since been sitting in my Chase bank account for the past few months (much to my annoyance as the Rand has just got stronger and stronger and I earn 0.01% interest – yes, that is point zero one of a percent). You can therefore understand my anxiety when I received an email last week from Chase saying that my account was overdrawn by almost $10 million (i.e. a negative balance, which I never knew was possible – I had no overdraft facility as far as I was aware). I believe I have a good eye for picking out phishing emails and this definitely looked like the real deal. With my heart skipping a few beats, I tried to log into my online banking with Chase. But it would not let me in (I was flawed by the security on my new computer). Over the next hour or so wondering what on earth could have happened (actually I was wondering where my details got compromised – traveling for the past few months I have been accessing the Internet from some potentially dodgy places although I have been extra careful). Yikes, R10 million dollars!!! The worst possible scenarios started flashing before me. Eventually, I managed to get through to the Chase help line (thanks Skype) and they told me that there is a Miscellaneous Debit for $9,999,999.99 … and this is normally done to freeze an account but I would need to call another number to find out what is happening. Upon calling this number all they would tell me is “Chase has chosen to end the relationship with you”. Trust me no matter how I tried, I could not get a reason out of them as to why they have closed my account. The reason is “Chase has chosen to end the relationship”.
Being on the east coast of Australia at the time, the time difference could not have been worse but I stayed up until after midnight to contact the friendly lady from the New York Chase branch, where I opened my account, but all she would say is “Chase has chosen to end the relationship” and that I would get sent a check (cheque) for my outstanding balance in the mail 10 business days after my account is finally closed. Now, I can’t tell you what a hassle it is receiving a USD check for a fairly large amount. To convert it back to Rands again I am going to be losing out to the banks … again. Besides, I need that money to invest in that overseas business and I already jumped through all those hoops to get it out of the South Africa legally! Chase Bank, if you are adamant in ending our relationship (I still wish I really knew why you want to do that any way), please can’t you at least let me do a wire transfer to get my funds out? Checks are so antiquated (realistically, it is probably going to take me at least a month to get those funds).
In fact I was so curious trying to find a reason why Chase would choose to end their relationship with me, I even paid one of those sites with paid-for-answers to give me a reason (and that is saying a lot if I went that far). The best they could come up with is something to do with the Patriot Act where the banks are obliged to close your account without reason if they suspect terrorist activity. I am not sure if that is the reason they closed my account, but if it is surely they could give me a chance to prove that I am a good, upstanding, law abiding citizen of this world? I wonder whether I really have the late Bin Laden and his cronies to thank for this? One thing is for sure, Chase is going to lose out on a lot of bank charges (and potentially other business) from me in the future.
Oh well, what can do? I think I have tried pretty much everything I can. Some times you just have to accept things for what they are, I suppose. Although I must say this experience, together with a few others on my current world tour, have resulted in the US loosing some of it’s glitter in my mind. South Africa is not that bad after all. I am sure I would not be treated this way by any bank in South Africa. Viva South Africa!
What a flippin pain in the ass! Not the kind of crap you want to have to deal with on your holiday!
From my experiences, banks in the US suck, big time! They are antiquated, badly interlinked and the only reason credit cards are used for everything is that the banking system itself is dysfunctional.
I wish you a speedy receipt of your cheque and an easy time cashing it!
Yeah, I think that is also why PayPal has done so well in the US. We take for granted how easy it is to do an EFT from one person to another in SA (even between different banks). It is so much more of a mission (and costly) to do so in the US.
Sorry to hear about your problems Andy. My dealings with Chase have been very limited, but I’ll keep this in mind.
Interesting read Andy ! All the best … keep us posted on any changes !
Ouch – suspect terrorist?
As an American, I fully agree that much of our system is indeed a pain in the ass and getting worse! Actually, I’m surprised you were not redirected to a call center in India, Korea or Palau – perhaps if Chase did have a call center in Palau you maybe able to resolve this issue with absolute certainty. All the best – thinking good thoughts:)
Geez! I can’t believe it…actually…… I can ’cause I have been extremely frustrated with some of the banking rules here.
Hi there.
I found your site because I am looking for accurate information on how a South African can open a US bank account online, e.g. not having to be physically in the US.
Why, you might ask? Well, it seems it isn’t only the US banks that are inflexible and complacent, but also some of the most well known companies like Apple and Amazon – with whom I have had some very frustrating mail exchanges in the past. Banging your head repeatedly against a brick wall is less painful than trying to work around some or other makes-no-sense company policy, which you will inevitably run into…
From my experiences it seems South African businesses are a lot more accommodating and hungry for new business. Not that I am a bank fan in general, but I feel our banks would demolish the American banks if the playing field was level and they were ever in direct competition.
Let’s take Amazon as an example. When it comes to most foreigners countries, the only payment option, when you sell anything, is getting mailed a cheque… Yeah, right. As if our postal service can be trusted with a cheque. The worst thing is they do not ship via the postal service because they know very well how unreliable it is, yet they insist that no other options are available to foreign sellers. Try and engage them on the subject and all you get is a canned response where they basically recommend that you open a US bank account… If only they allowed payments to Paypal, but of course that’s a direct competitor in the payment service space so I doubt it would ever happen.
In case you don’t know, First National Bank now offer a Paypal account which you can use to transfer money in and out of your Paypal account with a very low service fee. Also, I don’t think there is a limit at all.
Good luck and have a great day.
– Emile
PS. If you do have any info on how I might be able to open a US bank account, then please email me.