Not upheld: account closure without adequate notice and poor customer service complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr S complained that HSBC closed his credit card account without proper notice after it remained unused since January 2023. HSBC sent a dormant card reactivation notice by email on 25 September 2024 and closed the account on 5 December 2024. Mr S claimed he did not receive the email and that it should have been sent by post given his stated communication preferences. Additionally, Mr S and his wife experienced poor service when attempting to resolve the closure, with HSBC agents failing to recognise the third-party mandate and providing inaccurate information, leading to an unnecessary branch visit where Mr S lost earnings. The ombudsman found HSBC properly sent the notice email to the correct address and was entitled to close the dormant account per the terms and conditions. While acknowledging poor service to Mr S's wife, the ombudsman could only award compensation to Mr S as the eligible complainant and found he had not mitigated his losses by attending branch when alternatives existed.

The Ombudsman's reasoning

The ombudsman found that HSBC properly sent a dormant card reactivation notice email on 25 September 2024 with correct contact details, and the account closure on 5 December 2024 complied with the two-month notice requirement in the account terms. While Mr S's communication preference was set to post, HSBC was entitled to use email for service-related communications as this was registered on the account and Mr S had been receiving important emails (such as fraud alerts) via email without previously objecting. Although HSBC provided poor service to Mr S's wife regarding third-party mandate recognition and information provision, the ombudsman could only award compensation to Mr S as the eligible complainant. Since Mr S's wife dealt with most of the poor service and Mr S was not told he needed to attend branch, the ombudsman found Mr S had not mitigated his losses and could not hold HSBC responsible for his lost earnings.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website