HSBC has frozen all my accounts - high earner left penniless

ent_moot

People have circumstances where they need short term credit  

These are exactly the sort of people (struggling to get by) who are at high risk of making their situation worse by using credit cards. 

>>your personal crisis scenario is an edge case.

It could be, but I guarantee that the general case of people not being able to carefully manage their finances is extremely common.

Sea_Shell

Needing access to short term credit can sometimes be a pure temporary cash flow issue.

Might be waiting for a fixed term product to mature, or waiting for shares to be sold, but you don't have immediately available "debit" card cash, for a sudden purchase.

born_again

ent_moot said:

grumbler said:

I think it's time for our beloved regulator to oblige banks to give a warning to all people applying for an account.  Something like
Beware, we can freeze you account whenever we want to and without any warning. And we can keep it frozen for a as long as we want to. So, we advise you to open another account(s) with at least one other bank and keep a significant amount there for such emergencies.

Amen. The banks actively encourage you to bank with only one bank, offering free "switch" services, and even paying incentives, provided you close your old bank account.

It's covered in the T/C
https://www.hsbc.co.uk/current-accounts/products/bank-account/
Section 6.

dealyboy

@ent_moot ...

We could debate the benefits and downsides of credit cards; the security, anti-fraud and anti-money laundering measures required of our retail banks and the better or worse high street banks in implementation of policies, but I am more concerned about you and the effect of the sudden freezing of your assets ...

This has quite clearly been a shock to the system and by implication to your family, whatever the cause, as would be the case if it happened to me. I am sorry this has happened and hope things are resolved speedily.

It is fortunate that you have the Monzo backup, not everybody has secondary resources, but even so this will have caused you to do some considerable reorganization and a likely distraction from your important job.

Best wishes. db.

sheramber

ent_moot said:

>it would have been a more then worthy upgrade (again, why remaining on a standard account when you can have a better one for free?). 

Agreed. There's no reason not to upgrade. I'm pretty sure when I last looked (many years ago) there was a monthly fee, and so I deemed it not worth it. 

I'm not likely to stick with HSBC after this. 

dealyboy said:

... I was a consultant software engineer for many years in Computing (now retired).

I am sorry that you and your family are suffering as a consequence of this unforeseen event. When it is resolved you will understand the importance of following the first principles of SE ... to provide error detection and handling to prevent catastrophic failure. This applies to ERTS (embedded realtime systems) e.g. in aircraft and banking active/standby systems, as well as backup and recovery systems applicable to our own lives.

Time and again MSE'ers advise the precautionary approach, keep an emergency fund, invest according to your circumstances and risk tolerance.

With such a high income and high dependencies I hope you have learned the lessons of your specialism.

Remember risk = probability x impact.

Your points are largely irrelevant to this case. As I said, I'm not left penniless; but I could have been due to the fault of the bank. Yes, I embellished the title a little.

>>Time and again MSE'ers advise the precautionary approach, keep an emergency fund, invest according to your circumstances and risk tolerance.

Again, irrelevant. What you're talking about is strategic investments, and keeping an emergency fund. Both of which I do. The point is that this is an operational failing. Yes, I've embellished the impact a little; however, it is true that I feel violated, that it has caused significant unnecessary disruption, and a large amount of stress, especially as there are articles out there that say these things can take months to resolve and the bank point-blank refuses to give a timeline. 

>>With such a high income and high dependencies I hope you have learned the lessons of your specialism.

The main lesson I've learned is that HSBC is less competent than I gave them credit. It's not surprising that the UK loses >2 billion annually in fraud if HSBCs fraud detection is a general reflection of the industry. 

I suppose I should have been able to guess this, given the general trend for top Software Engineer to avoid banks because of their reputation for bureaucracy and unwieldy legacy systems.

Good luck finding a bank that doesnot freeze accounts when required.

A quick search would reveal many similar posts with most , if not all, banks.

ent_moot

 I am sorry this has happened and hope things are resolved speedily.

Thank you.

Good luck finding a bank that doesnot freeze accounts when required.

I think the "when required" is key.

Marchitiello

ent_moot said:

Good luck finding a bank that doesnot freeze accounts when required.

I think the "when required" is key.

Sorry to insist, but I invite you to make a quick search for the keywords including “bank frozen my account” or similar and you will see by yourself that all banks have supposedly frozen accounts without apparent reasons, so albeit it is unfortunate this has happened to you, whatever has caused it would have most probably mean that most bank in the same situation would have done exactly the same.

an Example: you could have, for whatever reason, reported  to your bank that the kitten seller had committed fraud and the £1000 you transferred was part of the fraud. Your bank would have started an investigation and contacted the receiver bank, which in turn would have probably frozen the kitten seller account as well start a proper investigation.. no real evidence, just a report from a third party customer to a third party bank… 

km1500

Just to re-iterate: never faster payment / transfer money to /from a stranger's bank account.

MrFrugalFever

ent_moot said:

CC, when used well, are a great tool for managing cash flow, large transactions spending (offer S75 cover), and even perks/rewards, as well as in cases like this, offers an alternative method of expenditure for up to approximately two months. Have been using them for about 24 years, only paying minimal interest/fees when suited me, without affecting my debt condition.

This is all true; however, credit cards are fundamentally build upon exploiting those who are, for whatever reason, unable to manage their finances carefully. 

Let's suppose you have a mental breakdown or some type of personal crisis, and neglects to carefully manage your credit cards because, quite frankly, you've got bigger problems. All the money you've made/saved by using CC could be wiped out in a few months because of the exploitatively high interest rates. At your lowest point, you're doubly penalised. 

On principle, I think they're a dirty business that is made successful through the exploitation of common psychological blind spots. I've heard the argument of "well, if people can't manage them, then they should not use them"; however, I think this is like saying "problem gamblers should just not gamble if they can't do it responsibly".

The world would be a better place without credit cards. 

I totally disagree, if used correctly, you can benefit quite handsomely such as free flights to other countries or physical cash back in your bank account.

I think the issue firmly lies with the education of usage and money management. 

Your comparison of using a CC and a gambler is no different to that of a prolific speeding motorist, at some point if the frivolous activity continues their fingers will get burnt.

Anyway, I digress, no amount of complaining will alter the regulatory requirements HSBC will undertake, all you can do is wait and hope it gets resolved quickly. Post investigation, it may be wise to check your credit reports with all 3 agencies and even submit a DSAR to CIFA’s just in case to understand if there has been any ramifications.

Opening another account will indeed provide you with a bit more flexibility and perhaps carry a month or two of expenditure in your Monzo account for backup.

Best of luck,

prowla

Whilst I can see where the bank has to do due diligence and provide appropriate protection, I don't think it justifies blocking well-established Direct Debit and Standing Orders on the account.