Not upheld: unfair account application decline complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr S complained that HSBC unfairly declined his applications for both a student account and a basic bank account without providing reasons. The key issue was the basic bank account decline under the Payment Accounts Regulations 2015. At the time of application, Mr S held an existing payment account with another bank and had a CIFAS loading against his name. The ombudsman found HSBC's decision was fair because Mr S was ineligible under regulation 23 (holding an existing account) and HSBC had legitimate grounds to refuse under regulation 25 (CIFAS concerns). The ombudsman noted that Mr S's existing account was due to close but this information was not available to HSBC at the time of review. The complaint was not upheld, and no remedy was ordered.

The Ombudsman's reasoning

Under regulation 23 of the Payment Accounts Regulations 2015, Mr S was ineligible for a basic bank account because he held a payment account with another institution at the time of application. Under regulation 25, HSBC could refuse the application based on the CIFAS loading and other confidential factors related to fraud and money laundering concerns. HSBC reviewed the application fairly based on circumstances at the time, and the decision to decline was appropriate. The fact that Mr S's existing account was due to close was not available to HSBC at the time of review, so HSBC cannot be held responsible for not considering it. Mr S's ability to open an account elsewhere mitigated the impact of the decline.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website