Financial Ombudsman to reject claims HSBC were too slow freezing small business accounts

Home » Business » Financial Ombudsman to reject claims HSBC were too slow freezing small business accounts

Financial Ombudsman to reject claims HSBC were too slow freezing small business accounts

⏱Last update

Author Ben Leonard

Hundreds of small businesses who were affected by a freeze on their business accounts could see their appeals to the Financial Ombudsman rejected.

Crackdown

The Financial Ombudsman Service was called to step in after HSBC incorrectly blocked hundreds of accounts of small businesses, including those of charities and churches. The move came after the bank tried to crack down on money laundering.

HSBC has increased the levels of scrutiny they are applying to their customers as a result of the money laundering probes.

It was estimated that hundreds of small firms were affected by the freeze. Many firms even complained that the freeze on their bank accounts had put the future of their businesses under threat after they were unable to pay staff and suppliers.

Reacting slowly

Many small business owners have therefore taken their complaints to the Financial Ombudsman, saying that the bank reacted too slowly to the debacle.

HSBC, Britain’s biggest bank, became aware of the problems towards the end of August but were slow to help out the small businesses affected. HSBC rejected the complaints, saying that they placed additional staff on the helpline and sped up the process to deal with complaints.

HSBC was also quick to stress that they had sent letters to small business owners, asking them to provide further information about their dealings with overseas businesses. These letters were sent over a three-month period. According to an HSBC spokesman, many small businesses either failed to respond, responded late or only gave partial information.

However, this did not stop small businesses contacting the UK’s financial arbiter, which can force financial services companies to pay out compensation to those affected, to the tune of up to £150,000. A small number of businesses also said that their accounts were suspended without prior notification.

Interestingly, despite this, HSBC only comes 5th in the top 5 banks that are most complained about to the financial ombudsman.

the Financial Ombudsman

Adequate notice was provided

However, much to the dismay of the small businesses, it looks like the Financial Ombudsman will side with HSBC, and reject claims that the bank acted too slowly.

The Financial Ombudsman already sided with HSBC in an earlier case, dismissing the case that referred to it.

Calan Horsman, the founder of the toilet cleaning firm Loogun, said that he already had his complained rejected by the Financial Ombudsman. According to the Financial Ombudsman, “adequate notice had been provided” for HSBC to freeze the company’s accounts.

The Financial Ombudsman concluded that “Based on what I’ve seen, I don’t think HSBC were wrong to carry out the review or had carried out unreasonable checks in line with it.”

“I also can’t fairly say that it had caused delay resulting in the inhibit being placed on your account, as it had made attempts to get in touch. Following the suspension, it would need to obtain all relevant information to complete the review before reactivating the account.

“Because of this, I’m not going to ask it to do anything different.”

By | 2018-05-30T10:07:28+00:00 September 11th, 2017|Business|0 Comments

About the Author:

mm
Ben is a Journalist with an extensive track record within most media, including TV, radio, press and direct marketing. Specialising in finance and business writing, Ben draws upon his extensive experience to craft compelling articles that provide valuable information to CLNews readers in a format that is easy to understand.

Leave A Comment