Is a Muslim Name Bad for Business?
June 11, 2003 -- — It was a formal, devastatingly terse termination declaration that sent a chill down Hossam Algabri's spine.
"We regret to inform you that we have decided that it is not in our best interest to continue your banking relationship with us," said the letter, which arrived in Algabri's mailbox toward the end of November last year.
No explanations were supplied and none were solicited. Instead, the letter stated that the bank could, "at any time, for any reason, and without prior notice" terminate an account.
And with that, an otherwise trouble-free banking relationship between the 32-year-old Boston-based computer consultant and Fleet Bank came to an abrupt, inexplicable close.
For Faizah Zuberi, it was a phone call from an American Express customer service agent.
In a measured tone, the voice on the other end of the line listed a litany of documentation demands — tax returns of the past three years, employment statements, identification documents, financial statements — that the company needed within the next two weeks.
Failure to comply, she was informed, would result in her Amex credit card being canceled.
Like Algabri, Zuberi was baffled. The New Jersey doctor and her husband, Iqbal Siddiqui, had an excellent credit report. The couple had applied for an Amex card solely to shop at the local Costco store. The monthly payments were negligible, she explained, and had always been paid off on time.
She said there was something positively fishy about the inordinate documentation demands, and it wasn't long before an incensed Zuberi found herself yelling at an Amex customer service supervisor.
"I told him, 'Why are you asking for all this? How come I don't have these problems with my other credit cards?' " the Pakistan-born U.S. citizen told ABCNEWS.com. "I told him, 'You are discriminating against me because I am Muslim. How come my Chinese and Jewish friends have not been asked for all this?' "
In the long, frustrating weeks after he received the termination of service letter from Fleet, Algabri arrived at the same conclusion.
At the time of his account closure, the 32-year-old, who emigrated from Egypt to the United States with his family when he was 12, was an employee of a Boston-based software firm.
"There was nothing wrong with my account," he told ABCNEWS.com during a phone interview. "I just had paychecks coming in. All my money was spent here [in the United States], since my family is here. I had been with Fleet and its predecessor since 1992. I never had a bounced check, there were no problems with my account. It seemed very discriminatory to me."
A Quiet Wave of Complaints
Across the country, a growing number of American Muslims have been flocking to community groups and rights organizations complaining about what they charge are instances of financial discrimination.
The allegations cover a host of financial services, from terminated bank accounts and credit cards, to major money wiring businesses refusing to transfer their money within or outside the country.
"We have definitely seen a growing number of calls from concerned people calling to ask what's going on," said Dalia Hashad, a spokeswoman for the American Civil Liberties Union. "They are shocked because they're making good salaries, paying fees, abiding by the rules, but they are being prevented from conducting their daily lives."
The crackdown on terrorism following the Sept. 11, 2001, attacks have led to some serious concerns about the U.S. government's infringement of civil liberties.
Last week, a report released by the Justice Department's Office of the Inspector General found "significant problems" in the government's handling of hundreds of illegal immigrants — mostly from the Middle East and South Asia — detained after the attacks.
But while allegations of the government's civil rights infringements under the USA Patriot Act has come under some careful media and official scrutiny, a quiet wave of complaints about some private U.S. companies — apparently conducting their very own crackdown against their Muslim clientele — has received scant attention.
Pockets of Particular Concern
While experts say it's still too early to arrive at reliable nationwide estimates of such complaints, pockets of particular concern have been appearing across the country.
In the past few months, the Muslim American Society has heard of more than 15 cases of unjustified Fleet account termination letters received by Muslims in the greater Boston area, according to the group's executive director, Mahdi Bray.
The money-wiring business has been particularly hard hit from all sides. On the one hand, there have been growing complaints by American Muslims of major money-wiring services refusing to transfer money within and outside the United States.
On the other hand, there are increasing allegations of banks terminating accounts of money transmitters doing business in so-called high-risk countries, mostly in the Middle East and South Asia.
"Today, traditional money transmitters risk extinction because banks continue to unjustifiably close their bank accounts at alarming rates," said Jorge Guerro, president of the National Money Transmitters Association. "These are licensed money transmitters sending money all over the world. If continued unchecked, this could fuel the growth of informal value transfer systems such as hawalas. "
Hawalas are an informal means of money transfer by which money holders on one continent transfer funds to money holders on another continent based on a system of trust, leaving no electronic or physical trail to track.
Allegations of credit card cancellations have so far stemmed mostly from the New York-New Jersey area, although activists say there could well be unreported cases across the country.
In a recent report in City Limits, the New York-based magazine found 12 cases in which Muslims — nearly all Pakistani-Americans — with good credit, had their American Express credit cards canceled in the New York-New Jersey area.
Suffering Silently or Speaking Up
And that, civil rights lawyers say, represents just the tip of the iceberg.
"A lot of people get treated badly silently," said Hashad. "They feel they face so much discrimination, this is just one they have to tolerate because it's wrong to speak up."
It was this climate of passivity in the community that convinced Algabri to create a stink about his account termination.
"People are very reluctant to come forward and do whatI'm doing. In fact," he acknowledged, "it's just a headache, but someone has to do something."
The computer consultant is in the process of filing a complaint against FleetBoston Financial Corp. and is currently in discussions with bank officials.
While declining to comment on details of specific cases, Fleet spokesman James Mahoney said the bank had not engaged in discriminatory practices. "We have not closed accounts based on ethnicity, race, religion or country of origin," he said. "We cooperate with law enforcement agencies and we monitor accounts for suspicious activities and we occasionally close accounts."
For its part, American Express also denied any allegations of discrimination. "We do not know the religious or ethnic background of customers, it is not part of our application process," said Judy Tenzer, spokeswoman for American Express. "We routinely monitor all our card accounts, and as a part of that we may ask additional information of our card members to get a fuller picture of the risks and their credit information."
Overzealous Warriors in the War on Terror
Under Title II of the 1964 Civil Rights Act, businesses are barred from discriminating on the basis of race, color, religion or national origin. But some experts say a post-9/11 phenomenon of various "lists" of alleged terrorism supporters have given private companies the leeway to be overzealous partners in the government's war on financial terrorism.
"They [banks and financial institutions] can't discriminate on the basis of ethnicity, race or religion," acknowledged Jim Dempsey, executive director of the Washington-based Center for Democracy and Technology. "But all they have to say is, we thought he was on a list. Then a lawsuit would have to establish that the business has been so careless as to amount to racial or ethnic discrimination — legally, it's not an easy thing."
Concerns over the proliferation of alleged terrorism supporter "lists" — as well as how accurate and up-to-date they may be — are growing in some activist and government circles after the Sept. 11, 2001, attacks.
Experts say most of the lists contain individual names without critical additional information such as dates of birth, countries of origin, passport or social security numbers. What's worse, they have been freely making the rounds in the private sector.
The Treasury Department's Office of Foreign AssetsControl maintains a list of approximately 5,000 Specially Designated Nationals and Blocked Persons list, also known as the SDN list.
Banks and other financial institutions are expected to frequently compare their account holder bases against the list and if a "hit" is found, the accounts must be blocked or frozen and the holder reported to OFAC. Failure to comply could result in stiff penalties including fines of up to $1 million and 12 years in prison.
But the SDN list, running to approximately 80 pages, has been frequently updated since the attacks and there have been cases of businesses — particularly in the money wiring service — being taken off the list because there were no proven links of terrorism.
The SDN list, however, is just one of many. After the attacks on America, the FBI released a list of people it was seeking for questioning. Called the Project Lookout list, it was widely circulated among private corporations. Although many of the persons listed were later cleared, the organization soon lost control of the list and several bootleg versions of the list are currently in circulation.
‘Erring on the Side of Caution’
One of the troubles with the lists, according to Dempsey, is that, "a number of names on the lists are common names or have elements of common names."
The fact that many Muslims share names such as Mohamad and Abdul — which are often spelled in a variety of ways in English — has significantly exacerbated the problem, experts say.
"I think this system is broken," said Dempsey. "It's broken because, under the system, it's binding on the individual to prove he or she is not the same person on the list and all the incentives on the bank weigh in favor of erring on the side of caution."
It's a corporate response W. Michael Hoffman, executive director of the Center for Business Ethics at Bentley College, calls cases of "pseudo patriotism," when companies become overzealous in order to be "known as the right kind of company."
A Familiar Pattern
Examples of U.S. companies resorting to what he calls "ethical fanaticism" have periodically cropped up in American history, according to Hoffman.
"During the McCarthy era [in the 1950s] everyone began to be motivated by fear," said Hoffman. "There was a fear that if they didn't cooperate with the government, they would be seen as either slow to ferret out the potential communist threat or they would be labeled as conspirators."
These fears, according to Hoffman, saw several Hollywood studios companies cooperate in what history has since deemed the red-baiting unleashed by the House Un-American Activities Committee under the vision of then-Sen. Joseph McCarthy.
Certainly American Muslims are not the first community to raise discrimination concerns over services offered — or lack thereof — by banks and other financial institutions. A 1998 Survey of Small Business Finances by the Federal Reserve Board found African-American firms more likely to be turned down for credit than their white-owned counterparts.
Past records show that Fleet has not always had a very clean track record with minority accounts. In 1996, the bank paid more than $100 million in Georgia to settle class-action lawsuits over discrimination in home lending. And in 1995, Fleet was investigated by the Justice Department for allegedly charging minority home loan borrowers higher fees.
Algabri knows that many ethnic groups have suffered throughout American history. "I know it's not as bad as it was for the Japanese-Americans [who were interned in camps during World War II], but why does it have to come to that for people to learn?"
Despite his rough experience with the bank, Algabri, who often finds himself defending the United States during his occasional visits to Egypt, says he has not lost faith in the American system."I care about this country, I care about U.S. security like anyone else," he said. "And I also trust this country. I trust the system here is fair and we will get over this."
But meanwhile, he's committed to a fight for his rights. "There is a suggestion of 'So, what's the problem, it's like restaurants — you can choose other banks,'" he said. "The problem is, it's like walking into a restaurant and they say, 'We don't serve blacks.' It's discrimination and discrimination is painful."