Upheld: Unauthorized fund recall and transfer; breach of customer instructions complaint against HSBC UK Bank Plc
Financial Ombudsman decision DRN-6032043 of 2026-04-21T00:00:00+00:00. Unauthorized fund recall and transfer; breach of customer instructions complaint against HSBC UK Bank Plc. Outcome: Upheld.
Decision detail
| Reference | DRN-6032043 |
|---|---|
| Decision date | 2026-04-21T00:00:00+00:00 |
| Firm | HSBC UK Bank Plc |
| Product | Savings / ISA |
| Claim type | Unauthorized fund recall and transfer; breach of customer instructions |
| Outcome | Upheld |
| Remedy | HSBC must pay the difference in interest Miss P would have earned from the new provider's ISA (4.10% AER) from 10 June 2025 to 24 April 2026, compared to the HSBC ISA rate (2.3% AER), plus £100 compensation for distress and inconvenience. HSBC must also work with HMRC if Miss P has any tax issues regarding the interest payment. |
Summary
Miss P instructed HSBC to transfer her ISA savings to another provider offering a higher interest rate (4.10% AER). Although HSBC initially made an error by transferring funds early (subject of a separate resolved complaint), it subsequently recalled the funds on 10 June 2025 without Miss P's knowledge or consent and deposited them into a lower-interest HSBC ISA (2.3% AER). The recall occurred after the 30-day deposit window at Miss P's chosen provider had closed, preventing her from transferring the funds back and causing her to lose the benefit of the higher interest rate. The ombudsman upheld the complaint and ordered HSBC to pay the interest differential from the recall date to maturity, plus £100 compensation for distress and inconvenience.
The Ombudsman's reasoning
HSBC recalled Miss P's funds without her knowledge or consent and deposited them into a lower-interest account after the deposit window at her chosen provider had closed. This prevented her from accessing the higher-interest rate she had selected and caused direct financial loss. HSBC provided no explanation for the recall decision. The ombudsman found this action was to Miss P's financial detriment and required HSBC to compensate her for the interest differential and distress caused.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| HSBC UK Bank Plc, all decisions | 7,503 | 23% |
| Savings / ISA, all decisions | 7,604 | 22% |
Source
Read the original decision on the Financial Ombudsman Service website