HSBC has frozen all my accounts - high earner left penniless

phillw

RG2015 said:
Okay, it is speculation on something that may not happen, but what redress would anyone have if it did happen? Would HSBC have any responsibility, for example under the Direct Debit Guarantee?

They would probably argue that the OP should have made alternate arrangements for paying their bills.

I'd certainly ask for compensation, but of course it depends on how strong their case was for locking the account.

phillw

Section62 said:
E.g. even if you don't want an overdraft, when you apply for a current account with a different bank they will very likely do a credit check on you, and if there is anything adverse in the records they may decline to offer you an account.

There are bank accounts that do not check your credit file at all.

Though if the OP gets a CIFAS marker for fraud then it becomes more difficult.  

RG2015

phillw said:

RG2015 said:
Okay, it is speculation on something that may not happen, but what redress would anyone have if it did happen? Would HSBC have any responsibility, for example under the Direct Debit Guarantee?

They would probably argue that the OP should have made alternate arrangements for paying their bills.

I'd certainly ask for compensation, but of course it depends on how strong their case was for locking the account.

1. Direct debits are set to be collected on the due date. Hence they potentially could be in default before they were able to make alternative arrangements.

2. And by all accounts the bank are prohibited from disclosing this information

miller

There have been threads on this forum where customers have been awarded compensation. I can't cite examples, but a quick search should reveal them.

inspectorperez

Momanns said:

inspectorperez said:

Very interesting thread this which caught my eye the other day when I was browsing on the forum.

First of all delighted that the OP is now back in business as it were with HSBC albeit that his confidence might have been well and truly shaken with HSBC and the system generally following this short but daunting experience.

It does make me wonder about the amount of subjective judgement applied in these cases by the reporting Money Laundering Officer, in this case the person/ responsible within HSBC.

 I held this role within my own business for a number of years before retirement. It was not a banking business but to the best of my knowledge the appropriate legislation applies across the board to all businesses defined within the relevant Acts of Parliament.

One thing in particular I was always aware of was that the responsibilities were much more onerous on that person than any of his/her director or partner colleagues and could not be covered off with liability insurance. This certainly helps to concentrate one’s mind and it is not too difficult to envisage an over zealous officer reporting anything and everything where there was just the tiniest suspicion of an issue which needed to be reported. I know that I used to keep meticulous records of matters that I did not report with full reasons noted and explained just in case there was ever any comeback. In such instances it would have been much easier just to submit the report and let the regulators do their job of investigating.

Anyway, just an observation which I thought I would post for what it’s worth!

This is half the problem. HSBC file 100's of SARs daily and the MLRO responsibility to delegated to teams. QA/QC work is done on a sample but certainly the MLRO does not have much visibility. All the big banks file 100's of SARs, most of them defensive and poor in quality. There is a SAR reform coming but who knows when.

Make sure SARs stand up to scrutiny | ICAEW

By pure coincidence, here is a link to an article which ICAEW have published today. The volume of reports is frightening and I do just wonder how many of them are frivolous? It actually does make you wonder how the investigators filter the sheer volume and how many are discarded by the wayside due to lack of resource.

Section62

miller said:

There have been threads on this forum where customers have been awarded compensation. I can't cite examples, but a quick search should reveal them.

Compensation tends to be limited to cases where the FI has done something wrong because they haven't complied with one of their own policies or procedures, or where they have done something wrong in relation to a regulatory or legal requirement.

If they apply an internal policy or process (which is lawful and not contrary to regulatory requirements) then generally it isn't something that will generate 'compensation' (including a money awarded by FOS in that generic description).

They may offer 'goodwill' payments, but that is something different.

If the bank is required by law or regulatory requirement to do something then 'compensation' wouldn't be payable, unless (for example) they had made a mistake.  (e.g. freezing the wrong person's account)

phillw

RG2015 said:
1. Direct debits are set to be collected on the due date. Hence they potentially could be in default before they were able to make alternative arrangements.

2. And by all accounts the bank are prohibited from disclosing this information

I guess I am unusual as I keep on top of making sure my Direct Debits go out, so I normally know before they do that anything is wrong. I've contacted on the day and also the day after & made a payment via a debit card and manage to avoid getting any missed payments.

RG2015

phillw said:

RG2015 said:
1. Direct debits are set to be collected on the due date. Hence they potentially could be in default before they were able to make alternative arrangements.

2. And by all accounts the bank are prohibited from disclosing this information

I guess I am unusual as I keep on top of making sure my Direct Debits go out, so I normally know before they do that anything is wrong. I've contacted on the day and also the day after & made a payment via a debit card and manage to avoid getting any missed payments.

Very prudent and I do much the same although if a DD is not there on the expected day it is usually there on the next day.

Most of my banks do not give advance notice of DDs although some do. I wish they all did as this information is always available at least one day before they are deducted.

phillw

RG2015 said:
Very prudent and I do much the same although if a DD is not there on the expected day it is usually there on the next day.

Most of my banks do not give advance notice of DDs although some do. I wish they all did as this information is always available at least one day before they are deducted.

Some banks give advance notice, however I know what direct debits are coming out and by asking them to move the direct debits as close to the 1st of the month as possible & also by taking advantage of rbs/natwest/santander/barclays direct debit perks then I also easily know if they haven't gone out (rbs/natwest/barclays should each have 2 direct debits pay out for example)

In a good month they will go out on the 1st when I'm logging in to transfer money around anyway.

jimjames

ent_moot said:

Yes, too much faith in HSBC has certainly been a big mistake. 

I suppose I better get on with opening a new bank account elsewhere and changing where my salary is paid.

No idea why you think credit cards are a scam. Paying off every month gives protection as well as some weeks delay in paying the bills and a 0% card gives free money you can get interest on elsewhere. I agree it's a rip off if you pay interest on most of them though but in your situation would have been beneficial to have backup.