Not upheld: account closure and default recording complaint against HSBC UK Bank Plc

Decision detail

Summary

Miss I complained that HSBC unfairly closed her student account and recorded a default against her after she entered an unarranged overdraft in October 2024. Miss I claimed she did not receive HSBC's letters and was unable to manage her account due to serious health issues. HSBC demonstrated it sent multiple communications to Miss I's recorded address and attempted contact via text, phone, and email between December 2024 and January 2025, with no response. The ombudsman found HSBC acted fairly in issuing a default notice on 14 January 2025 and a final demand on 11 February 2025, and in closing the account after prolonged non-payment. The ombudsman noted that while Miss I's health situation was challenging, HSBC was unaware of it and had followed regulatory duties and account terms. The complaint was not upheld.

The Ombudsman's reasoning

HSBC followed its regulatory duties and account terms in managing the unarranged overdraft. The bank made significant efforts to contact Miss I through multiple channels over several months, providing ample opportunity for her to respond. While Miss I's health issues were challenging, HSBC was not aware of them at the time and cannot be held responsible for not accommodating circumstances it did not know about. The default recording was mandatory under FCA guidelines and not discretionary based on the amount owed. The account closure was a fair exercise of the bank's right to manage accounts in prolonged unarranged overdraft.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website