Upheld: account blocking and notification failure complaint against HSBC UK Bank Plc
Financial Ombudsman decision DRN-6270761 of 2026-06-08T00:00:00+00:00. account blocking and notification failure complaint against HSBC UK Bank Plc. Outcome: Upheld.
Decision detail
| Reference | DRN-6270761 |
|---|---|
| Decision date | 2026-06-08T00:00:00+00:00 |
| Firm | HSBC UK Bank Plc |
| Product | Current account |
| Claim type | account blocking and notification failure |
| Outcome | Upheld |
| Remedy | HSBC UK Bank Plc to pay £150 compensation for distress and inconvenience caused by failure to send text message notification of account block. |
Summary
Mrs and Mr W complained that HSBC blocked their joint account without proper notification after mail addressed to Mrs W was returned undeliverable in January 2026, leaving them unable to access funds or use their cards for several days. HSBC explained the block was necessary to comply with regulatory Know Your Customer obligations and was standard procedure, though it could not evidence sending the promised text notification. The ombudsman upheld the complaint in part, finding the account blocking was fair and reasonable given regulatory requirements, but acknowledging that the failure to send the text notification caused distress and inconvenience. The ombudsman accepted HSBC's offer of £150 compensation as appropriate recognition of the distress caused by the lack of notification, while rejecting the customers' arguments that HSBC should have prompted the second account holder separately or acted faster.
The Ombudsman's reasoning
The ombudsman found that HSBC's decision to block the account was necessary and reasonable given its regulatory obligations under FCA KYC/CDD requirements to maintain current addresses. The blocking procedure was standard practice and the delay in applying the block (several days after receiving returned mail in January) was not unreasonable. However, the ombudsman acknowledged that the failure to send the promised text notification caused distress and inconvenience, as it prevented the customers from taking earlier action. The ombudsman rejected the customers' argument that HSBC should have prompted the second account holder to update their address separately, noting that addresses are personal to individuals, not accounts, and that it is not the ombudsman's role to review business policies. The £150 compensation was deemed appropriate to recognise the distress caused by the lack of notification.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| HSBC UK Bank Plc, all decisions | 7,532 | 23% |
| Current account, all decisions | 45,590 | 19% |
Source
Read the original decision on the Financial Ombudsman Service website