Not upheld: account closure, account restrictions, payment rejection, removal of overdraft facility complaint against HSBC UK Bank Plc

Decision detail

Summary

Miss S complained that HSBC incorrectly returned a £5,000 payment, removed her overdraft facility, and restricted and closed her account. The issues stemmed from a 'gone away/address unknown' marker placed on her file in 2022 based on returned post, despite Miss S still living at that address. When HSBC attempted to contact her in July 2025 and subsequently restricted her account in October 2025, Miss S did not receive notifications and only discovered the restrictions when her payment was declined. Although HSBC acknowledged service failings and paid £500 compensation, the ombudsman found this amount fair and reasonable, noting that Miss S was able to resolve her credit card payment through other means and discovered the account closure in time to make alternative banking arrangements.

The Ombudsman's reasoning

The ombudsman found that while HSBC should have investigated the reason for returned post sooner, the bank's decision to use secure messaging and telephone contact was understandable given the 'gone away' marker. The ombudsman acknowledged that the payment being returned and the account restrictions caused Miss S distress and inconvenience, but found that she was able to pay her credit card bill by other means and discovered the account closure in time to make alternative banking arrangements. The ombudsman concluded that the £500 compensation was fair and in line with published guidelines for comparable situations.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website