Upheld: service failure in payment processing and delayed refund complaint against HSBC UK Bank Plc

Decision detail

Summary

X mistakenly transferred £2,000 into her HSBC account and requested cancellation. HSBC processed two refund requests for the same payment, returning £2,000 twice despite only one payment being received, leaving X £2,000 short for nearly four months. Despite X's repeated calls and chasing, HSBC failed to promptly correct the error, causing X to incur overdraft fees and financial hardship. The ombudsman upheld X's complaint, finding HSBC should have identified the duplicate refund request and that its service was poor, but determined the offered £350 compensation plus 8% interest on the missing funds for HSBC-attributable delays was fair and reasonable.

The Ombudsman's reasoning

Although X's initial error caused the problem, HSBC should have identified that the same authority was being used twice and prevented the duplicate payment. HSBC's service was poor with delays in correcting the situation and X being passed between teams without clear answers. However, HSBC is not solely responsible for all delays as some were attributable to waiting for authority from the sending bank. The £350 compensation is fair given that X has now received the missing funds, overdraft charges have been refunded, and 8% interest will be paid for periods where HSBC caused delays.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website