Upheld: Account closure without notice complaint against HSBC UK Bank plc

Decision detail

Summary

Mr W complained about HSBC's handling of his current account closure after switching to another provider. A £2.98 debit interest charge was applied on the switch date, which Mr W attempted to pay the following day using his usual payment method. HSBC failed to inform Mr W about the charge or payment restrictions, and subsequently claimed no record of his payment or his attempt to contact them. Although HSBC eventually credited the amount and paid £50 compensation, the ombudsman found this insufficient given the firm's failures to communicate clearly and investigate Mr W's concerns. The ombudsman upheld the complaint and ordered £100 compensation for the avoidable worry and inconvenience caused.

The Ombudsman's reasoning

The ombudsman found that HSBC failed to adequately inform Mr W about debit interest charges and payment method restrictions before the account switch. Mr W reasonably attempted to settle the debt promptly using payment details that had worked previously. HSBC should have clarified payment requirements before, not after, Mr W made the payment. The firm also missed opportunities to investigate the missing payment and clarify the phone call issue. The brief credit file notation, while concerning, was unlikely to cause significant financial harm. The combination of avoidable worry, inconvenience, and lost confidence in HSBC justified a £100 compensation award.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website