Bank’s ban is far from a safeguard

P.H. writes: I am the signatory to an account with HSBC, established decades ago to cover expenses in the maintenance of four flats in the property where I live. I received a letter from HSBC saying it needed to confirm some of our ‘business details’ in a procedure called ‘Safeguard’. I submitted the details online and was thanked, but then received a further letter which appeared to duplicate the first one. Nonetheless, I completed the details again but the bank then told me our account would be closed because, HSBC said, I had failed to give the information it required.

HSBC claims its Safeguarding review is intended to protect customers from fraud, but time after time, readers have told me that no matter how hard they try to cooperate with the long list of questions asked and evidence demanded, HSBC ends up dumping them and shutting their account. Small accounts belonging to clubs and community groups seem particularly vulnerable, with customers claiming HSBC simply doesn’t want their business.

The results can be unfortunate. You told me that you rang HSBC in a bid to keep your account open, and were told you would be sent a six-digit code by post, but nothing arrived. You then paid two bills by cheque, one to a contractor for £94 and the other to the building’s insurer for £1,440. Both bounced, because HSBC had closed the account. This left you and other flat owners uninsured, and caused some embarrassment to you personally as you are a local solicitor.

You opened a new account with NatWest, but HSBC refused to transfer the £5,000-plus left frozen in the closed account. Armed with your signed authority, I asked HSBC to comment, to confirm the details of your call asking to keep the account, and to let me have a copy of the Safeguarding record so I could see whatever it was you failed to answer.

That was in May. That’s right – May last year. Since then, there has been a virtual wrestling match between me and HSBC. A minor victory was that HSBC released the account balance and even offered £200 ‘by way of saying sorry’. It claimed to have sent you the code to keep the account, but HSBC refused point blank to let me see the Safeguarding questions, for ‘security reasons’. However, the bank did reveal there had been a problem involving a company at your address.

I had to threaten HSBC with legal action to obtain its records about you, before it finally sent a copy of its Safeguarding questionnaire directly to you but not to me. You then passed the 11-page document to me and I scanned it to find out why the bank rejected your answers. And there it wasn’t: a big space headed ‘HSBC Reason for rejection’ – completely blank.

This left the mystery of the company based at your address. What was this company? And did HSBC mean your home address or the address of your law firm? HSBC told me that ‘a separate non-related company was found to have a similar address’. But what did this have to do with your flat owners’ account?

While I was bashing on with questions to HSBC, the Financial Ombudsman Service was also investigating and has told HSBC to increase its apology payment to £300, which it has done. But I have to look at what you told me almost a year ago: ‘I have the impression HSBC’s sole focus was to close the account.’ It is hard to disagree.