Financial Ombudsman sides with HSBC as firms mull frozen account appeals

 
Oliver Gill
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HSBC said wrote to a number of its small business customers requesting additional information (Source: Getty)

Hundreds of small businesses hit after HSBC froze their accounts as part of a money laundering crackdown could see appeals to the Financial Ombudsman rejected.

The UK's financial arbiter has already sided with HSBC and dismissed one case referred to it.

Earlier this month HSBC attracted fierce criticism from businesses that had their accounts frozen as part of tightening up on account due diligence.

Firms said their future had been put under threat after being unable to pay staff and suppliers. Many have either lodged or are mulling plans to take their case to the ombudsman to recoup losses.

Rejected

Calan Horsman, the founder of toilet cleaning firm Loogun had his complaint rejected by the Financial Ombudsman. The response to Horsman's complaint, seen by City A.M., concludes "adequate notice had been provided" for HSBC to freeze the company's accounts.

The FInancial Ombudsman wrote in the letter to Horsman:

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.

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"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."

A spokesperson for the Financial Ombudsman Service said it saw a "small number of complaints each year" over frozen accounts.

"Like any complaint, we’ll look into the individual circumstances to see if the bank has acted reasonably. If someone thinks their bank has acted unfairly they have the right to make a complaint and if they remain unhappy with the bank’s response they can ask the Financial Ombudsman Service to look into things.”

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