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Help my friend not get screwed over by lawyer in recovering bank account
March 10, 2014 9:07 AM   Subscribe

Please help my friend not get screwed over by his own lawyer in recovering dormant bank acct funds.
Here was my last ask metafilter question. For my friend who had his Mexican HSBC bank account closed, and Someone me-mailed me and recommend he find a lawyer on the US Embassy site which he did. It seems HSBC closed the account because it was dormant (something similar to this situation maybe?). The lawyer said he thinks this was illegal, and that the lawyer has contacted top executives at the bank and that the lawyer can recover the funds if my friend can give 30% of said recovered funds to the lawyer as a fee (this fee seems exorbitant). Half to be paid now, and half to be paid upon obtaining the funds in the dormant account. This seems like a huge fee, for which the funds that are probably legally available to my friend by some other simpler means. My friend can't go to mexico for at least several months, and when he calls HSBC in Mexico they say they can't give him any more specific information about his account unless he comes to a branch in person, in Mexico. Any advice on how can pursue this without getting hosed for 30% of his own money?
posted by lijiaxiaoniu to Law & Government (34 answers total) 3 users marked this as a favorite
 
What happened to the idea to give his mother Power of Attorney so she could resolve the issue with HSBC? It seems like that should cost nothing.
posted by dcjd at 9:20 AM on March 10 [1 favorite]


I have no knowledge of the specifics of this situation, but "lawyer acts on a contingent basis and takes 30% of what's recovered" is pretty common, right down to the percentages.
posted by KathrynT at 9:22 AM on March 10 [5 favorites]


Seconding that Power of Attorney from the original question is a great idea. I would recommend exhausting a few different ways (in person, in person speaking with someone else, in person at a different branch) before shelling out that kind of money. (And there's always social media.)
posted by mochapickle at 9:30 AM on March 10


This does not sound like an appropriate case for a contingent fee, especially if the lawyer has already stated that he can recover the fees. Contingent fees are common in litigations, where the outcome can be uncertain. But this is not a litigation. And when contingent fees are in place, there is generally no upfront payment. I would inquire whether this lawyer has an hourly rate, and if not, you should find a different lawyer.
posted by lmindful at 9:31 AM on March 10 [2 favorites]


Is the work the attorney doing straightforward? Is there a lot of money in the account? If so, your friend should ask the attorney to accept a smaller fee. If the attorney won't agree to lower the fee, talk to other attorneys and try to find one who will accept a smaller fee. If your friend can't find an attorney who will do the job for less, then that's the going rate and your friend will have to pay or wait until s/he can go to Mexico and deal with the bank directly.
posted by alms at 9:32 AM on March 10


Is there an equivalent to a state office of unclaimed funds in Mexico? Perhaps he can call HSBC again and find out where, in general, funds are turned over to when an account is closed (a governmental agency, a general HSBC fund, etc). He could also call the governmental body for the state in which the account was located and see if there is a procedure for unclaimed funds.
posted by melissasaurus at 9:32 AM on March 10 [1 favorite]


Definitely agree with pursuing the Power of Attorney idea first. Also, is there really no way that your friend could make a quick trip to Mexico to try to resolve this? He could book an appointment with the main branch (or maybe book one appointment with one branch in the morning and one in the afternoon, just in case) and try to sort it out in person. It certainly would be cheaper than spending 1/3 of $40,000 to do so.
posted by ClaireBear at 9:32 AM on March 10


His mom lost her ID and is getting a new one in mexico now but it will take weeks, and by then she will be back in USA. The work for the lawyer seems straight forward and there is about $40,000 USD in the account.
posted by lijiaxiaoniu at 9:37 AM on March 10


If the account was just closed, the money doesn't just go to HSBC, generally, it's owed to the account holder, the account holder just doesn't get to use the account anymore. I don't know how unclaimed funds work in Mexico, but I would be shocked if this was handled particularly differently. Has he asked specifically about the unclaimed funds policy and procedure? Not "why was the account closed" but "hey, my account got closed for inactivity, where do I find the forms to get my check". It sounds like you've both construed this as "they closed the account and decided they could just keep the money", but I don't think that's very likely.

But yeah, $12k for this seems kind of crazy high, but at the same time like an amount of money where someone with real international banking experience would normally have clients who wouldn't blink at it. Not an unreasonable fee, but just more firepower than filing for unclaimed funds should really require.
posted by Sequence at 9:38 AM on March 10 [5 favorites]


You know, Sequence has a great point. Something very similar happened to me when Wells Fargo shut off my access to an account due to dormancy. They money was there, it still existed and I was able to see it for myself at my banker's terminal, but it just wasn't tied to the account I COULD access. A family member was actually even able to deposit money into the account I couldn't access, which is why I had to go to the bank and talk to two different bankers to sort it all out. These things... happen.

So, yeah, also voting to see if there's some sort of misunderstanding like Sequence says.
posted by mochapickle at 9:47 AM on March 10


I would easily spend $1,000 to fly down to Mexico and get everything resolved in person for $40,000.
posted by Jacob G at 9:48 AM on March 10 [12 favorites]


Here is a contract for HSBC Mexico accounts (this may or may not apply to your friend's account). The relevant portion on inactivity is as follows:
Inactividad de la cuenta. Si la cuenta abierta al amparo del presente Contrato, en el transcurso de 3 (tres) años no ha tenido movimiento, las Partes aceptan se aplique lo previsto por el artículo 61 de la Ley de Instituciones de Crédito, el cual establece que el principal y los intereses de captación que no tengan fecha de vencimiento o que se renueven automáticamente, las transferencias y las inversiones vencidas y no reclamadas que en el término de 3 (tres) años no hayan tenido movimientos por depósitos o retiros, deberán ser abonados en una cuenta global que llevará a cabo cada institución y posteriormente se transferirán a la beneficencia pública; En consecuencia, el Cliente autoriza expresamente al Banco a convertir las divisas depositadas en la cuenta a Moneda Nacional antes de su abono a la cuenta global, para tales efectos el Banco aplicará el tipo de cambio considerado para operaciones de compraventa de divisas.

Which basically says that if they close the account due to inactivity, in accordance with Article 61 of the Credit Institutions Act, the funds are placed in an HSBC global fund and later transferred to the state.

Looking up the Credit Institutions Act brings you to this government page, which details what exactly needs to happen to the funds.

I'd bet the funds are in the HSBC global account for unclaimed funds. Call HSBC Mexico and find out how one, in general, would claim funds that were placed into the global account upon closure due to inactivity. You may be able to claim the funds via an HSBC in your current country -- I would at least call the HSBC in the current country to find out if this is possible.

No soy abogada Mexicana.
posted by melissasaurus at 9:51 AM on March 10 [3 favorites]


(And honestly, it took the banker three clicks and 15 seconds to xfer the funds into an account that I did have open.)
posted by mochapickle at 9:51 AM on March 10


Thank you so much guys for the great posts.
He would also easily pay 1000 dollars to fly to mexico to get this resolved but he just had surgery and can't go for several months, and you misconstrue, paying 1000 dollars doesn't get it resolved anywhere near 100% of the time, so it's not that straight forward.
posted by lijiaxiaoniu at 9:57 AM on March 10


If the lawyer's work is straightforward as you say you should be able to find an attorney to do it for a lot less than the $13k this attorney is asking. If you can't then maybe it's not straightforward.
posted by alms at 10:03 AM on March 10 [4 favorites]


I realize this isn't Mexico, but I've had a bank account closed in the past due to inactivity (I'd totally forgotten about it). One phone call to customer service and there was a cheque in my hands four days later.

I'm kind of confused as to why you'd need a $13K lawyer to handle this. Has your friend actually called HSBC and asked what to do?

Contingency fees (IANAL) are for civil litigation only. This kind of work should be straight up hourly legal work, if any legal work is even necessary.

Seriously, what has HSBC said directly to your friend about this?
posted by feckless fecal fear mongering at 10:58 AM on March 10 [1 favorite]


Also it seems like "Pay me $6.5K right now for something I've decided is illega (ps: do you have any independent confirmation that what's happened is illegal?), and then I'll start the work" is just reeking of corruption and scam to me. This is not a dig at Mexico or pandering to stereotypes, it just sounds totally weird to me for a lawyer to do this; they'll bill you for expenses after (or periodically while you are retaining their services), not demand half up front. Reputable ones, anyway. Seems like a situation rife for "Oh well I need another $2K for whatever, and this'll cost $3K, but we're getting closer..."
posted by feckless fecal fear mongering at 11:10 AM on March 10


Like others have mentioned, I've had a bank account closed due to inactivity and just went to the bank and they cut me a check. The details you've given sound a bit fishy. Your friend forgot about having 40 grand in Mexico for so long that they closed his account but now can't wait a few months to retrieve it himself? His mom is actually IN Mexico but doesn't have an ID and can't be bothered to extend her stay to get the money? Lawyers behaving like stereotypical shady lawyers out of a comic book? It sounds like they are building up a long-con to eventually hoodwink you. After hearing those details, if I wasn't going to see at least half of this money myself, I would stop trying to help.
posted by BabeTheBlueOX at 11:17 AM on March 10 [4 favorites]


His mom lost her ID and is getting a new one in mexico now but it will take weeks, and by then she will be back in USA.

Wait, hold on. How is she getting into the USA without ID?
posted by feckless fecal fear mongering at 11:39 AM on March 10 [1 favorite]


Hey guys, thanks for all the answers.

BabeTheBlueOX, I am 100% sure that they are not trying to hoodwink me, they are long time friends of mine, and I can confirm the story is true. He didn't forget about the bank account, he just hadn't used it for long and it's true his mom lost her ID. I am close to her and spend time with her often and she did lose her ID. I do appreciate the concern but that's not the case.

Hi feckless fecal fear mongering, His mom leaves as soon as she gets her ID. I'm picking her up at the airport as I dropped her off there. and HSBC told him that the account was closed and they wouldn't give a reason and said he would have to come in person to a branch in mexico to get more details.
posted by lijiaxiaoniu at 12:00 PM on March 10


She can't make a stop by the bank once her ID arrives?

I dunno man, something about this just seems really off somewhere. I find it especially bizarre that a bank would require an in-person meeting in another country. Did he get this information from that specific branch or from HSBC global/HQ/CS?

Is there a possibility his account was frozen for legal reasons--involvement in drugs, I dunno--and he is being asked to go to the bank directly so he can be arrested? I used to work for a guy whose bank accounts were frozen for a while after 9/11 because of a mistaken identity & anti-terrorism-funding laws = really unpleasant time for a couple of months. Could something like that even have happened here?

In any case, longtime friend seems to me like it should make him even less likely to demand such a huge fee, and half of it up front.

Personally I would just start working my way up the chain at HSBC until I found someone who would give me a straight answer. If no such person were produced, I'd probably try to get some news outlet interested in exploring why HSBC is stealing peoples' money from them.
posted by feckless fecal fear mongering at 12:10 PM on March 10


lijiaxiaoniu, does your friend's mom have a passport? She can use it as her ID, or if she's Mexican, she can get a new one in a day.

Did they contact the CONDUSEF? They should be able to get free counsel there.
posted by clearlydemon at 12:18 PM on March 10


feckless fecal fear mongering brings up a good point -- HSBC Mexico has been in the news somewhat recently for money laundering issues. If his account was (rightly or wrongly) seized/flagged due to that, this will be significantly more complicated than if it was closed for inactivity. If the friend is a US citizen/resident, it's possible that he didn't meet some new KYC or FATCA requirement and the account was closed due to that (which may also make it harder to get the funds).

I agree with others that something does not sound right here. Either this is truly a series of unfortunate events or you're not getting the whole story.
posted by melissasaurus at 12:22 PM on March 10


...and now that I've finally read your previous question...

Call HSBC customer service. Work your way through however many levels of management are required until you get an answer.

Here is the global contact list for HSBC. Try working your way up through the USA structure first, then to HQ in the UK.
posted by feckless fecal fear mongering at 12:28 PM on March 10


Oh and if you scroll down to the bottom and click on Leadership, you'll find the Board of Directors and so forth. Useful names if you're trying to find out why a bank took $40K of your money and won't explain why unless you show up at that branch, in another country, in person.
posted by feckless fecal fear mongering at 12:35 PM on March 10


Also, just to make your life easier. From Clearlydemon's CONDUSEF link (also given to you previously; did your friend contact them?):
By phone or in person at our offices:

01 800 999 80 80, toll free from any location inside Mexico.

53 400 999, calling from Mexico City and its surrounding areas.

Internet:

Please visit our web site: asesoria@condusef.gob.mx
Visit us in person at:

Our central offices: Insurgentes Sur 762, Colonia Del Valle, Delegación Benito Juárez, Mexico City.

Throughout the Mexican territory: we have at least one office in each state.
link
posted by feckless fecal fear mongering at 12:44 PM on March 10


Thanks for all the answers,
Yes, feckless fecal fear mongering and clearlydemon, he found the CONDUSEF link very helpful. Thank you very much.
posted by lijiaxiaoniu at 12:51 PM on March 10


In that case I am now perplexed.
posted by feckless fecal fear mongering at 12:56 PM on March 10


Feckless fecal fear mongering, he found it useful and he is contacting them right now. Thank you!
posted by lijiaxiaoniu at 12:59 PM on March 10


According to melissasaurus's link, the funds from an inactive account should only be transferred to the bank's unclaimed funds account if it had been inactive (i.e., without withdrawls or deposits) for 3 years, so that seems unlikely if it had really been inactive for just a single year (or less, if the account was showing zero in May 2013?). Account contracts from HSBC Mexico that I found online confirm this. If it was somehow closed for inactivity then that same link says that presenting yourself at the bank with proof of your account and your credentials would be sufficient to reclaim the funds, and presumably somebody doing the same with a proper carta de poder would be fine, too. I wouldn't think the account being incorrectly closed for inactivity should have any bearing on that process. A 30% commission certainly seems to be too much for something like that, but I suspect that it's something more complicated.

Hopefully CONDUSEF will offer a few other triggers for closure that might inform your friend's decisions. I would think it'll be difficult to get any information specific to the account over the phone or via email due to privacy/confidentiality concerns, so I imagine that it will take someone with a Carta de Poder (be they a lawyer or otherwise) to clear this up. Did your friend actually give anything to the current lawyer that they could use to prove that they were a legal representative of the account bearer? If not, the lawyer may not even know anything with great certainty.

In this situation, if CONDUSEF is unable to provide much guidance without your friend showing in person, I'd probably just try and contact another lawyer that would be happy to work by the hour. Your friend's mother might be able to help facilitate this. I think that the lawyer that's been contacted so far is simply being opportunistic.
posted by bunyip at 2:08 PM on March 10


The account hadn't been used for more than 5 years. My friend was told over the phone that it had a zero balance and was closed in May of 2013 (probably had zero balance because the money was moved to the office of unclaimed funds or whatever), but he had been logging in online every few months to see his funds. My friend provided bank statements, and copy of his ID to the lawyer, and my friend agrees the lawyer is just being opportunistic. Can't blame the lawyer, if someone just calls you out of the blue because their dormant (for five years!) bank account was closed, the lawyer might assume that my friend is rich and lazy, and go for a high fee, for just filling out the paperwork to receive a check from HSBC for the full funds by using a carta de poder power of attorney.
posted by lijiaxiaoniu at 2:37 PM on March 10


This really does sound weird. $40,000 sitting in an account and your friend's mom can't find the time to stop by the bank before she returns? The ID will arrive literally minutes before she has to leave? How can that be certain? And she has no passport, which you need to travel to and from Mexico, because if she had a passport it could be used as ID at the bank?
posted by Justinian at 2:43 PM on March 10 [2 favorites]


He and his mom are trying to arrange for her to go inquire at the bank the day after she gets her lost ID card, but her flight leaves the next day, so there's no guarantee it will be enough time to get anything done, and she must leave to come back to work.. if she can't get it done, he will go himself in a couple months after he is recovered from his surgery
posted by lijiaxiaoniu at 2:52 PM on March 10


I would be fascinated to know the continuing outcome of this story.
posted by feckless fecal fear mongering at 3:23 PM on April 4 [1 favorite]


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