Not upheld: fraud and account closure - fund recovery complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr S complained that HSBC failed to return all funds from his accounts when they were closed. Two cheques totalling £27,000 were deposited into his account, but HSBC received a fraud report indicating the cheques were fraudulent. After Mr S could not provide evidence of entitlement, HSBC returned the remaining £1,500 to the source bank. Mr S later claimed the funds were proceeds from selling luxury watches but provided no supporting evidence. The ombudsman found HSBC acted reasonably in declining to refund the money, as the cheques were fraudulent and Mr S's inconsistent explanations without evidence did not demonstrate entitlement to the funds.

The Ombudsman's reasoning

The ombudsman found that HSBC had extensive legal and regulatory responsibilities to protect customers from financial harm and prevent financial crime. HSBC's decision to ask Mr S about his entitlement to the funds was legitimate and in line with its obligations. The ombudsman was not satisfied that Mr S was entitled to the £1,500 because: (1) the cheques were fraudulent; (2) Mr S provided two different and inconsistent explanations for receiving the funds; (3) Mr S could not provide any evidence to support either explanation; and (4) HSBC's confidential information and rationale demonstrated it had reasonably declined to refund the money. The ombudsman was satisfied that the £1,500 represented the remaining fraudulent funds that Mr S had not spent.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website