HSBC UK Bank Plc · DRN-3174399

The complaint A company, which I’ll refer to as “B”, complains that HSBC UK Bank Plc closed its bank account without explanation and declined its application for a Coronavirus Business Interruption Loan. Mr C is the company’s director and brings the complaint on its behalf. What happened B held a business current account with HSBC. It applied to the bank for a loan under the Coronavirus Business Interruption Loan (“CBIL”) Scheme in late March 2020. The bank wrote to B on 15 April 2020 to say that following a review of the account, it had decided to withdraw its services and would be closing B’s account on 15 June 2020. On 15 June 2020, B’s relationship manager advised Mr C that the CBIL application had been approved. But the following day, Mr C discovered that he was unable to access B’s online account. After querying this with his relationship manager, he was told that the account was closed and the bank wouldn’t be able to proceed with the CBIL application. Mr C complained, but HSBC maintained its decision on both the account and the CBIL – so he referred his concerns to us. He said that the bank hadn’t given B notice of the account closure or explained what was happening and that it was now “virtually impossible” to obtain an alternative bank account, given the disruption caused by the coronavirus pandemic. So the bank’s actions would leave B unable to access the financial support it needed through the CBIL scheme – with significant consequences for the company. One of our investigators looked into things but didn’t think HSBC had done anything wrong. She said, in summary, that HSBC had been entitled to close C’s account and had provided the company with two months’ notice of the closure in line with the applicable terms and conditions. And although it was disappointing that HSBC had led Mr C to hope that B’s CBIL application would be successful, it had failed the bank’s checks and had therefore been declined correctly. Mr C didn’t accept our investigator’s view and asked that an ombudsman review the complaint – so it was passed to me to decide. My provisional decision I wrote to both parties with my provisional decision earlier this month, setting out why I thought B’s complaint should be upheld in part. This represented a change from our investigator’s view, so I gave HSBC and B the opportunity to respond with any additional comments or evidence they wanted me to take into account before I made a final decision.

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In summary, I said:  HSBC had been entitled to withdraw its services from B. The bank had done so in accordance with the terms and conditions of the account, by giving two months’ notice. And while Mr C had said that he’d been unaware of HSBC’s decision to close B’s account until 16 June 2020, I could see that the bank had written to the company at its registered address with the requisite notice – so if the letter had gone astray, that wasn’t due to an error on the bank’s part.  Although I appreciated that the pandemic meant that B was likely to have faced additional challenges in opening an account elsewhere, I still thought two months was a reasonable period of time in which to make alternative arrangements.  With regard to the CBIL application, the bank had to conduct a number of checks before lending. As B’s application had failed those checks, it was declined. Having reviewed the information on which HSBC’s decision was based, I thought it was reasonable. I couldn’t see that the incorrect information Mr C had been given about the approval – which was corrected a day later – had impacted the company.  HSBC had, though, made mistakes in how it handled the CBIL application. It had decided to close B’s account while the application was pending and its reasons for doing so meant that it was never going to agree the CBIL. So the bank ought to have known by 15 April 2020, at the latest, that the CBIL would not be approved – and cancelled B’s application accordingly. But it didn’t do this. It had proceeded to liaise with B about the application, and in doing so had put the company so some avoidable inconvenience. For this, I thought HSBC should pay B compensation of £150. HSBC accepted my provisional decision. B didn’t respond. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Having done so, and with neither party having provided any further information for me to take into account, I’ve not reached a different conclusion from that set out in my provisional decision. So this decision confirms my provisional findings, as set out above. My final decision I uphold this complaint in part and require HSBC UK Bank Plc to pay B compensation of £150. Under the rules of the Financial Ombudsman Service, I’m required to ask B to accept or reject my decision before 20 December 2021. Ben Jennings Ombudsman

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