Not upheld: account blocking and failure to provide supporting letter complaint against HSBC UK Bank Plc

Decision detail

Summary

Miss R complained that HSBC unfairly blocked her current account in May 2025, which led to the cancellation of a direct debit payment to a debt collector and subsequent enforcement action with additional costs. HSBC had blocked the account following a fraud report about a payment Miss R received and took approximately one month to complete its review. Although HSBC failed to promptly send a letter confirming the block, the ombudsman found that HSBC acted lawfully in blocking the account for fraud investigation purposes and that Miss R had alternative means to make payments, as she successfully transferred most of her account balance to another account during the block period. The ombudsman upheld HSBC's £100 compensation as reasonable and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that HSBC had important legal and regulatory obligations to prevent financial crime and that blocking the account was a reasonable and common practice in retail banking. Although the block caused the direct debit cancellation, HSBC did not act wrongly. The ombudsman was not persuaded that Miss R lacked the means to make an alternative payment to the debt collector, given that she successfully transferred most of her account balance to another account on 19 May 2025, shortly after the partial block was implemented. The ombudsman concluded that even if HSBC had sent the letter earlier, it would not have materially changed the outcome, as Miss R had access to funds through alternative means.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website