The banking world can often feel like a maze of red tape and unreasonable policies — especially during a recession.

Back in the 70s, one man found a creative loophole that would loosen the system’s rigidity and leave the bank scrambling!

Read on for the full story.

Bank selectively enforces rules, loses business and money

In the 1970s, with the UK suffering a recession and work hard to come by, my (then childless) Dad had an opportunity to move to Dubai to work.

My Mum was able to go with him.

They’d have accommodation provided, a good income (higher than the UK equivalent would have been), and were able to fly over and check everything out before committing.

All in all, a great opportunity.

But they still had some financial assets tied up back in the UK.

They took the plunge and decided, as they had no accommodation costs in Dubai, they would keep paying the mortgage on their UK house so it would be available to them if/when they returned.

My parents had a UK current account with one bank (let’s call them Goodish), but their mortgage and savings account with a different bank (let’s call them Muppets).

This was quite a headache to navigate each month.

Every month, Dad’s salary was paid into his current account with Goodish, and he’d then phone them to ask them to move money into his savings account with Muppets (as this is the account his mortgage payment came from).

He never had any problems.

One day, Mum writes a cheque from the Goodish account, then later realizes the account will not have sufficient funds to cover it.

“No problem,” thought Dad. I’ll give Muppets a call and ask them to move some back out of the savings.

Little did he know, this would prove to be a lot harder than he initially thought.

Unfortunately, Muppets didn’t want to transfer money out of their account and so informed Dad that the only way he can remove money from that account is in branch, in person, using his “savings book.”

Now, Muppets didn’t have a Dubai branch in the 70s.

The only way he could comply would be to travel 3,500 miles home.

Frustrated at their repeated refusal to help, Dad resolves the immediate cheque issue another way and looks at when he’ll next be in the UK.

So he returns to the UK with a plan.

Fast forward a couple of months and Dad is back in the UK.

Armed with his little “savings book,” he strolls into his local branch of Muppets and asks for confirmation of his savings balance and mortgage balance.

Then he does something the bank is really going to hate.

He then hands over the mandatory savings book and requests to withdraw the full savings account balance in cash.

Dad then pays off the outstanding mortgage in full and asks for an envelope for the excess.

Dad then closes the savings account, walks to Goodish, and deposits the remaining savings.

When the manager tries to intervene, he lets the manager have it.

The bank manager tried to stop this happening, but once Dad pointed out that he technically isn’t able to transfer money INTO his savings account without using the savings book, he’d have no way to pay the mortgage.

The mortgage itself had no restriction on early repayment, and thus he could do what he liked with his own money.

The bank’s stubbornness cost them more than just a transfer fee.

What did Reddit think?

Many banks seem to count on you not paying.

Banks are not your friends, people!

It’s all quite backwards.

Banks can be plain predatory sometimes, but this hardworking dad sure showed them.

Sometimes you just have to look out for your own interests, because the bank certainly isn’t!

Ultimately, he didn’t just settle his mortgage — he outsmarted the system

If you liked that post, check out this story about a customer who insists that their credit card works, and finds out that isn’t the case.