DRN-6225561

The complaint Mr A complains on behalf of D (“D”) a limited company about the service received from HSBC UK Bank Plc (“HSBC”) in relation to its Safeguard review during which D’s bank account was restricted. What happened HSBC identified it needed some updated information from D and initiated a Safeguard review on 21 July 2025. HSBC’s systems log shows it contacted D on 22 July 2025 by email via SmartServe - a secure digital platform HSBC uses accessible through online banking - asking D to get in touch. Further notifications through SmartServe were sent to D on 19 and 23 August and 1 September. HSBC attempted to phone D on 28 and 29 October using two different numbers it had recorded for D but the calls went unanswered. HSBC sent a further request via SmartServe on 31 October, but as HSBC hadn’t received any response from D it issued a notice of closure letter via post to the address it had recorded on its system for D on 19 November. The letter informed D its account would be closed from 22 January 2026 as HSBC hadn’t received the information it required. Within the letter it provided a number to call urgently. As HSBC didn’t hear from D it placed restrictions on D’s business account. Following this when Mr A realised restrictions had been placed on D’s account he got in touch with HSBC on 26 January and raised a complaint that he wasn’t informed about the review and the suspension of D’s account had significantly impacted D’s business. After speaking to Mr A, HSBC completed its review of D and the restrictions were removed from the account on 30 January 2026. HSBC apologised for the inconvenience but didn’t uphold D’s complaint as it hadn’t made an error. HSBC explained that it was complying with its regulatory obligations which required it to gather additional information about D and its account usage to ensure its records were accurate and up-to-date and as part of its policies it conducts Safeguard reviews periodically and failure to meet deadlines may result in account restrictions. Mr A was dissatisfied with this and so brought D’s complaint to this service. Mr A says he was unaware of HSBC’s information requests for D and hadn’t seen its attempts to contact it. Mr A says as a result of D’s account restrictions payments to contractors were bounced, he couldn’t access online banking and had to spend time resolving the issue and arranging

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alternative payment methods. Mr A believes the actions HSBC took weren’t proportionate and believes compensation should be paid for the disruption caused to D’s business. One of our investigator’s looked into the concerns raised by Mr A but thought that HSBC were entitled to conduct its review in-line with the terms and conditions of account and regulatory obligations. They thought the restrictions placed on the account were an appropriate method to prompt engagement from D when other contact attempts had been unsuccessful. They thought HSBC’s contact attempt methods to D via notification, phone and letter were reasonable and as it hadn’t received a response that HSBC’s actions in placing restrictions on D’s account were appropriate and in-line with expectations and the terms of D’s account which it had consented to. Mr A disagreed and doesn’t believe the contact attempts were reasonable before HSBC suspended D’s account because: • when phoning D HSBC didn’t leave a message and one of the numbers used he didn’t recognise; • The letter was addressed to “The Secretary” rather than to Mr A as the named director of D and so could be mistaken for generic corporate correspondence; • The letter was sent by standard post and as such HSBC had no confirmation the letter was received before proceeding to restrict D’s account; and • SmartServe messages are not visible without logging into online banking. Mr A believes at a minimum that a voicemail should’ve been left and an email sent to his registered address and that a tracked postal delivery would’ve ensured the message reached him and has asked for an ombudsman’s decision. 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. The crux of this complaint is whether HSBC acted reasonably when it attempted to contact D as part of its Safeguard review and whether it treated D fairly when it went on to restrict D’s account after it didn’t receive a response. It might help if I explain here, as we are not the regulator, I don’t have the power to tell HSBC how it needs to run its business and I can’t make HSBC change its systems or processes – such as when it requires it to conduct due diligence checks or how they are carried out or what information will satisfy these requirements. This is simply not something I can get involved with. Nor can I say what procedures HSBC needs to have in place to meet its regulatory obligations. We offer an informal dispute resolution service, and we have no regulatory or disciplinary role. That said I don’t think it is unreasonable for it to carry out diligence checks from time to time on customers in order to ensure it meets regulatory requirements - this is needed not only to protect the banks against criminal activity, but also their customers. And so I’m satisfied HSBC was entitled to carry out a Safeguard review on D’s account and I consider it reasonable that HSBC warned D that a failure to engage with the review process could result in restrictions being placed on the account. As this is to ensure its customer information was up to date to meet its regulatory requirements which is also set out in the

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terms and conditions of D’s account which D agreed to when opening it. I’ve carefully considered the contact attempts HSBC made before it restricted D’s account. As outlined in the background HSBC used multiple channels to contact D on numerous occasions. Taken together, I think these attempts amount to a reasonable and proportionate effort to contact D over an extended period of time. I understand Mr A’s position that he wasn’t aware of these contact attempts. But I don’t think that, of itself, means HSBC didn’t make them or that they were unreasonable. Banks are entitled to rely on the contact details its customer has provided, and I haven’t seen evidence that HSBC used incorrect contact information or failed to follow its usual processes here. Mr A has raised several specific concerns about how HSBC tried to contact D. I accept SmartServe messages require the customer to log into online banking to view them. However, SmartServe is a platform HSBC uses for secure communications, and I don’t consider its use for important account related messages to be unreasonable or unexpected. I also don’t think it was unreasonable for it to attempt to reach D by telephone using the numbers it held on file and don’t think HSBC was required to ensure that those calls resulted in contact before taking further steps, particularly given the number of other contact attempts made through different channels. I appreciate Mr A’s concern that addressing the letter to “The Secretary of ‘D’” may have appeared to be generic correspondence. However, the letter was sent to D at its registered address and related specifically to D’s account. I don’t think addressing it in this way made the letter unreasonable or ineffective. Furthermore, I don’t think HSBC was required to send the letter by tracked or recorded delivery. Sending an important notice by standard post to the address it held for D I think a reasonable method of contact, particularly when it was one of several methods used. So overall, I’m not persuaded HSBC needed to take additional steps, such as emailing Mr A directly or leaving voicemail messages, before moving forward with restrictions. The question for me isn’t whether HSBC could have done more, but whether what it did was fair and reasonable. In this case, I think it was. Nor do I think HSBC acted unfairly when it didn’t receive a response from D despite repeated attempts over several months, it restricted D’s account. Restricting the account was a proportionate step to prompt engagement and protect the bank while it still lacked the information it needed to complete its review. And once Mr A did get in touch on 26 January 2026, HSBC completed the review promptly and removed the restrictions on 30 January 2026 within what I think was a reasonable amount of time. I appreciate Mr A has explained that the restrictions caused disruption to D’s business, including bounced payments and loss of access to online banking. However, as I haven’t found HSBC made an error in how it carried out the review, contacted D, or applied the restrictions, I can’t fairly hold it responsible for those consequences. As this complaint has been brought on behalf of D, a limited company, I can also only consider direct financial loss caused by any failing on HSBC’s part and I’m not persuaded any such loss resulted from an error by HSBC.

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And so it follows as I don’t think HSBC have acted unreasonably or unfairly in its attempts to contact D in the way it did and the restrictions it applied to D’s account when it didn’t receive a response, I do not uphold this complaint. My final decision For the reasons I’ve explained, I do not uphold Mr A’s complaint brought on behalf of D against HSBC UK Bank Plc. Under the rules of the Financial Ombudsman Service, I’m required to ask D to accept or reject my decision before 14 May 2026. Caroline Davies Ombudsman

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