Not upheld: account closure, loan recall, unfair treatment complaint against HSBC UK Bank PLC

Decision detail

Summary

E, represented by director Mr F, complained that HSBC blocked and closed its business account, then recalled its Bounce Back Loan and used account funds to pay off the BBL and credit card debt via setoff. E sought reinstatement of the BBL, return of funds, compensation, and removal of negative credit markers. The ombudsman found HSBC acted fairly and in accordance with its terms and conditions, legal obligations, and regulatory requirements. The ombudsman reviewed confidential evidence justifying the account block, closure, and BBL recall, and determined HSBC was entitled to exercise setoff under the loan agreement. The complaint was not upheld.

The Ombudsman's reasoning

Banks are strictly regulated and must take actions to meet legal and regulatory obligations, which may include restricting accounts. HSBC acted in accordance with its terms and conditions by blocking the account, providing two months' notice of closure, and recalling the BBL. While HSBC was not obliged to disclose reasons to the customer, the ombudsman reviewed confidential evidence and was satisfied HSBC acted reasonably. The BBL terms entitled HSBC to recall the loan in certain circumstances, and the ombudsman was satisfied the recall was justified based on evidence provided. The setoff provision in the BBL agreement entitled HSBC to use account funds to offset the debt.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website