Not upheld: account restriction and closure procedure; clarity of information requests during Safeguard review complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr E complained on behalf of E, a limited company, about HSBC's conduct during a Safeguard review that resulted in account restrictions. Mr E argued that HSBC's information requests were unclear and inconsistent, its internal processes were poor, and the decision to restrict the account was disproportionate, causing business disruption. HSBC explained it was complying with regulatory obligations to understand the business's ownership structure and that it provided 63 days' notice before applying restrictions. The ombudsman found that HSBC was entitled to conduct the review, that the information requests were reasonable given the change in ownership involving executors, and that the account restriction was a fair and proportionate step to prompt engagement. The complaint was not upheld.

The Ombudsman's reasoning

HSBC was entitled and required to conduct the Safeguard review to meet legal and regulatory obligations. The information requested was fairly standard for this type of review, particularly given the change in ownership structure involving executors. HSBC made reasonable and proportionate efforts over an extended period including emails, telephone calls, and written correspondence. The closure letter was sent in line with HSBC's usual processes to the correct address, and HSBC was not required to provide proof of postage or delivery. The account restriction was a fair and proportionate step to prompt engagement and protect HSBC while the review remained incomplete. Once information was provided, HSBC promptly completed the review and lifted restrictions.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website