Not upheld: account blocking and closure; regulatory compliance complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr A complained that HSBC unfairly blocked and then closed his account following a scam claim regarding a £600 phone purchase. Mr A, who was a minor at the time, stated he received no clear information and experienced distress. HSBC explained it took these actions to comply with regulatory obligations requiring ongoing monitoring and due diligence. The ombudsman found HSBC's decisions were fair and reasonable, made in compliance with legal and regulatory requirements and account terms. While HSBC could have expedited the review and provided clearer communication about timescales, the ombudsman did not uphold the complaint, though acknowledged a £50 payment for the service failing was appropriate.

The Ombudsman's reasoning

HSBC is strictly regulated and required to carry out ongoing monitoring of account relationships, including due diligence checks. The bank's decision to block and close the account was made in compliance with these regulatory and legal obligations and in accordance with the account terms and conditions. While HSBC could have expedited the review and provided clearer communication about timescales, the underlying decisions to block and close were fair and reasonable. Banks are entitled to set their own risk criteria and policies, and as long as decisions are made fairly, comply with law and regulations, and align with account terms, the ombudsman will not intervene.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website