Help sought with HSBC bank closure complaint

Milarky

In a nutshell the FOS (adjudicator) has struck out my complaint on a tecnicality - that HSBC's failure to given notice when it closed my accounts this year cannot be considered because the decision to close was "a legimitimate commercial judgement" and the FOS don't look at complaints about "legitminate commercial judgements" by firms.

My feeling is that this is fatal - that it's a 'killer argument' obviously suggested by the bank to keep the FOS out and save them paying a fee and shifting the FOS man is next to impossible.

My challenge to this argument is that I complained on a specific aspect - that no notice was given - which is (somehow?) a separate issue from the closure decision - which I have never challenged. That once the accounts were determined to be closed by the 'reviews' the question of notice - or giving reasons for not giving notice - had to be a separate consideration - a separate process - and therefore one that comes under the Banking Code???

Otherwise, we are in a very strange situation -where banks can close your accounts and not give you notice - because the banks have decided to close your accounts - which is somehow a 'private' matter for them.

Is this at all hopeful - trying to tease the notice question away from the account closure question?

(Any thoughts gratefully received)

Scousebird_2

What type of account was it?

Extant

Banking code just says "normal circumstances." If there's anything remotely abnormal, we're entitled to do it straight away.

Examples of abnormal include abusive behaviour to staff, fraud, cheque kiting, not repaying an overdraft when demanded, your failure to keep to the terms and conditions of your account, asking for too many coin bags.

akashi

BarclaysManager wrote: »

Banking code just says "normal circumstances." If there's anything remotely abnormal, we're entitled to do it straight away.

Examples of abnormal include abusive behaviour to staff, fraud, cheque kiting, not repaying an overdraft when demanded, your failure to keep to the terms and conditions of your account, asking for too many coin bags.

How many is too many?

SparciaM

You need to give more examples as to how or what has occurred to help you out.
What did HSBC do to close your account, what complaints procedures did you do to allow this closure/not allow it, etc

Also, the banking code is a voluntary "bible" written by the banks, adhered by the banks who subscribe to it. It isn't law and everything in it is by assumption only and banks and customers alike, can adhere or not adhere to it - no legal action needed.
I do think within the current climate that the government and the FSA and the FOS will write a new guide which banks have to adhere to , as clearly banks don't adhere to the current code. A prime example is: section 14 - it clearly states at the bank must help you out if you have any financial difficulty and will do all they can do help out. I've worked with numerous banks and numerous debt centres of banks (namely and shamly Barclays and the Co-op) to know that banks don't adhere to section 14, as when I worked for Barclays for eg. they wouldn't discuss anything until you were over you authorised limit (which isn't what you have, but what the bank allow you to have ie. you have a £1000 limit, but you're deemed a good customer so you will not be contacted by consumer debt finance until you were over the pre-approved £2000 limit - in essence, the bank allowed you to spend £1000 over your limit incl charges and interest before they would even speak to you). Plus, if you spoke to your Barclays branch about this, you would not be able to be put on a reduction or help status until you reached you bank authorised limit. Ultimately, they don't or didn't care if you had difficulty.

I would take the banking code as a pinch of salt, not as gospel or otherwise as many UK banks don't adhere to it's entirety.

Scousebird_2

If you were paying money in and then sending it out to various savings and other external accounts and then money was coming back in again, sounds like ''crossfiring'' was suspected.

Below is an example of cross firing on uncleared funds-but it is just an explanation, it can be applied to cleared effects/real time funds also e.g-Cash/BACS wages.

“Crossfiring” or “kite-flying,” which involves multiple accounts, account users, “no value” cheques and internet transactions. “A cheque is written, deposited, and an account provisionally credited, with a virtual amount created. At the same time, the account user opens internet banking facilities, and on several occasions on the same day, that virtual amount will be transferred back to the account from which the original cheque was issued. When the money is sent out of the account, it goes out as real money, and lands back in the original account as real money.”

Hope this provides some kind of explanation of one of the things it may be-however for an explanation of your circumstances, only the bank could provide this I'm afraid.

Scousebird_2

just_ask wrote: »

I really cannot get my head around what cross-firing is, why it would upset a bank or how it would benefit a customer.

From what I understand it is part of AML and POCA regulations and one of the methods of Layering in Money Laundering is cross-firing methods like the one I mentioned. This subject so broad and also covers fraud and all boils down to financial crime/deception/fraud.

If a bank deems an account to contravene any of the above, then they will close an account and not provide a reason because this is classed as ''Tipping Off'' if they have suspected anything and that is a criminal offence that carries a maximim prison sentence of 5 yrs.

If the reasoning is less serious and a bank suspects that a person is using their account for handling money other then their own to evade declaration or even running a business, then they have the right to close an account in adherance with their own terms and conditions that should of been provided on account opening under the Banking Code.

Like I say-this is such a broad area and different banks use different levels of discretion and some are less harsh than others, but the simple fact is, if a bank suspects anything that is not subject to the reporting proceadures of the POCA or AML regulations, then they usually ask to speak to you, to establish the usage of the account or give you prior notification that they no longer wish to do business with you-which is their right to do.

Bearing in mind that should a bank ever close someone's account that is not debt related-this does not mean you are excluded from ever other bank-it just excludes you from that bank, just so long as you didn't commit a criminal offence which sanctions have been placed on you to stop you from holding an account in future eg-financial sanctions list or Bankruptcy are to name a few.

Hope this makes sense!

ShelfStacker_3

just_ask wrote: »

I really cannot get my head around what cross-firing is, why it would upset a bank or how it would benefit a customer.

It turns fake money from a cheque into untraceable real money at the bank's expense. Could also be used as a form of money laundering.

ShelfStacker_3

Before the bank clears the cheque for sure, some of them allow access to the funds. These funds are withdrawn, the cheque eventually bounces, the funds withdrawn are now available for use.

ShelfStacker_3

Actually, that description's a little bit wrong: try http://en.wikipedia.org/wiki/Check_kiting#Circular_kiting

Basically, it's spending money with no actual money being used.

masonic

This does rather sound like the banking equivalent of 'wrongful arrest', but presumably there is something in your T&Cs allowing HSBC to waive notice for closing your accounts if there is evidence of fraud/serious misuse of the account, whether or not it turned out to be justified? That could be why the FOS won't get involved.