Bank account closed without notice ... help !

jtb2412

A friend of mine has had her HSBC bank account closed without notice ! She has had some money problems in the past (not her fault, an ex) so this account was just a basic account (e.g. no cheque guarantee card or overdraft).

She went into her branch today to pay a cheque in and was promptly told that her account had been closed. The staff member was very nasty and made my friend feel about an inch tall. There was over £1000 in the account at the time so, obviously wondering why the hell they were closing the account, she asked. The reply was that because her account had some refused direct debits (amounting to 3 in the last 18 months) she had breached the account terms and conditions so they were closing it. She has had no prior warning of this (although they said they did write to her, but she's never had a letter !) The staff member even gave her hassle over withdrawing the £1000 that was in there ! Not sure what the hell she expected her to do, just leave it in there for them I suppose ! :mad:

Any advice as to what she can do or where she stands with this, would be much appreciated. She's not reclaiming any charges either so it's not because of that.

She wasn't notified at the time of opening the account about the '3 strikes and you're out' terms either (although it's probably in the small print somewhere !)

Also appreciate some advice as to where she can open a new account that will allow direct debits (probably for someone with a fairly low credit rating). She has sent off for her credit report, just to make sure that the bank haven't placed a default against her (can they do this and are they likely to?)

Sorry it's a bit of a long post ! Thanks for reading

jonesMUFCforever

If its in the terms and conditions of the account that you get 3 strikes and your out then that is what they will do.
There will be no default by the bank as she has left no debt but the people who were expecting to be paid by D/D will probably have marked her down as a late payer.

Most banks offer a basic account.

Meltdown_2

My reading of the HSBC Terms & Conditions is that (in general) they have to give you 30 days written notice if they wish to close your account.
Their T&Cs strike me as a mess (so I could have misread) but that seems a likely way for them to proceed.
This seems to tally with what was said to the OP's friend.
Personally, at that stage I would have asked to see the copy of the letter that they had on their file/database. (Doing it then would have denied them the chance to "invent" one. Yes, I know I'm cynical. )
From other recent posts, it seems that banks are cancelling overdrafts, but closing an account in credit seems a bit extreme. The OP's friend deserves (at the very least) a clear explanation of why HSBC are taking the action they are in her case - and not in the (presumably) many other similar cases.

jtb2412

Thanks guys/gals ....... nice to get a bit of feedback. She did ask to see the letter and they did pull one off the system, but my friend never received it (she's not a liar and I know if she had received it, she would have queried it then and not gone in 4 weeks later and tried to pay a cheque in !)

HSBC definitely said that the closure was due to the fact that she had 3 direct debits refused over the last 18 months and it breached their terms and conditions. She's on a good wage £32K a year and it's paid straight into the bank. No overdraft or c/cards on the account either. Seems rather odd that they closed it and didn't sent her a cheque for the balance (or don't they do that?)

I will have to find out the details of the refused DDs and post here although I don't think it will make a difference to what they do. I have told her to go into the branch and ask to speak to the manager, especially after the way she was made to feel 'inferior' by the staff member who spoke to her !

cifpower

I thought a bank could only close your account without notice for fraud? Otherwise written notification and 30 days warning were needed.

mum2one

I would also report the matter to the financial obsbunman, again agree with the other poster, about asking for a copy of the letter, and a copy of the terms and conditions that your friend signed.

1st thing to do is contact all the companies that have direct debits, and see if anyone can write a cheque four your friend in exchange for cash, this will keep the flow of payments open.

Most banks do a basic account, where direct debits can be set up on, try the post office, co-op bank, or barclays, thats off the top of my head.

Any payments that your friend has going in, they need to arrange alternative arrangements until a new account is up and running. x

Meltdown_2

I suppose I should have included these in my earlier post ...
They are (I think) the relevant parts of the T&Cs. (my emboldening)

7. Borrowing from us
7.2 You must not borrow on any of our savings accounts, Basic Bank Account or Amanah Bank Account. If there is at any time a debit balance on any such account, then we will be entitled to charge interest (except on an Amanah Bank Account), in accordance with clause 7.6, to charge fees in accordance with clause 6 and to close your account upon 30 days' written notice.

12. Closing your account
12.4 If we wish to close your account, we will give you at least 30 days’ notice in writing unless there are circumstances which justify us in closing the account on earlier notice. We will repay any credit balance to you. You should also return any cards we have issued to you on the account having cut them into at least six pieces and any unused cheques.

Edit: Oh, and I couldn't find any references to "refused direct debits" being mentioned as a reason for closing an account. I can only assume that the DDs were "refused" because there was insufficient funds in the account. But if they were refused, then wouldn't the account have stayed in credit, meaning HSBC don't have a valid reason for closure under their T&Cs?

karlitos_way

juss wondering about the dd's, they would not have been returned if there were sufficent funds which obviously wast the case from what u said, so thats odd aswell.....

jtb2412

I'll ask about the direct debits later (am going to ring her to relay all your kind comments) ..... I do think that there were unsufficient funds in the account but they are not huge DDs (no mortgage etc). She knows she should have had the money in there for them (I've done it myself before as have many of us !) but never expected to have her account closed because of it !

Only conclusion I can come to at the moment is that the refused DDs would have put her account in the red due to charges but I need to confirm that too.

She's more upset that if she'd have received a letter, she would have gone down there and sorted it. She doesn't have money problems now (quite the opposite !) and would not have buried her head in the sand over this.