Partially upheld: Account closure without notice complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr H, living in supported accommodation with his finances managed by Mr H1, complained that HSBC unfairly restricted his account access by requiring prior approval for payments. HSBC had received conflicting information about Mr H's mental capacity and referred the matter to the Office of the Public Guardian. The ombudsman found HSBC's account restriction was reasonable and proportionate given the unresolved capacity concerns and the bank's regulatory obligations to protect vulnerable customers. Although HSBC offered to process payments with supporting documentation, reducing practical impact, the ombudsman upheld the complaint in part due to poor in-branch service and awarded £100 compensation to Mr H, clarifying that compensation could only be awarded to the account holder, not to his representative.

The Ombudsman's reasoning

HSBC's decision to restrict account access was reasonable and proportionate given the unresolved concerns about Mr H's capacity and the conflicting information received. The restriction was necessary to protect Mr H and his funds, and HSBC's offer to process payments with supporting documentation reduced the practical impact. However, poor in-branch service fell below acceptable standards and warranted compensation. Compensation could only be awarded to Mr H as the account holder and customer, not to Mr H1 as the representative.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website