Not upheld: Account closure without notice complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr B complained that HSBC unfairly applied a CIFAS adverse fraud marker and closed his Basic Bank Account after receiving fraud reports related to cryptocurrency transactions. Mr B claimed he was a legitimate crypto vendor and provided contemporaneous evidence of his transactions. HSBC maintained it had grounds to apply the marker based on fraud reports and closed the account in compliance with its terms and conditions. The ombudsman found that HSBC had reasonable grounds beyond mere suspicion to apply the marker, noting the unusual pattern of Mr B receiving payment for crypto assets not yet owned suggested complicity with fraudulent payments. The account closure was found to be fair and compliant with regulatory obligations. The complaint was not upheld and no compensation was awarded.

The Ombudsman's reasoning

The ombudsman found that HSBC had grounds for more than mere suspicion to apply the CIFAS marker. While the P2P site's closure prevented verification of trading conversations, the nature of the fraud reports and the unusual pattern of receiving payment for crypto assets not yet owned suggested Mr B was aware of or complicit with the fraudulent nature of the payments. The ombudsman noted that blockchain evidence alone does not demonstrate transaction legitimacy. Regarding account closure, HSBC acted within its terms and conditions and regulatory obligations in closing the account with immediate effect. The ombudsman was satisfied HSBC acted fairly despite Mr B holding a Basic Bank Account.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website