DRN-6290664

The complaint Mr G complains that because of errors on HSBC UK Bank Plc’s platform, he lost his ISA allowance. Mr G would now like HSBC to restore his ISA allowance and provide an additional benefit of their choice to make up for the inconvenience that he’s suffered. What happened On 14 June 2025 at 11:55am, Mr G transferred £19,544.80 from his savings account with HSBC to the uninvested cash account (UCA) in his ISA. The UCA already held £455.20 and Mr G wished to bring his balance up to £20,000. When Mr G attempted to start investing a portion of the funds, a message appeared stating that his ISA allowance was £455.30 rather than the expected £20,000. Mr G rang HSBC the same day to query this, but the helpline operative wasn’t able to assist him as the investment team weren’t available at the weekend. So, he decided to move the £20,000 to his savings account moments later (at 12:08pm), to see if that resolved the issue. However, as he had withdrawn the funds from the ISA, he was unable to put them back in. On 16 June 2025, Mr G telephoned HSBC’s helpline. During that conversation, he explained that when he went to place a trade after transferring the £19,544.80 to the UCA, the system told him that he only had about £500 to make a trade within the ISA. As Mr G had withdrawn the funds from his ISA, he discovered that he had lost his ISA allowance for the tax year. Shortly afterwards, Mr G decided to formally complain to HSBC. In summary, he said that he was unhappy that he’s lost his ISA allowance as a consequence of a problem with their platform. After reviewing Mr G’s complaint, HSBC concluded they were satisfied they’d done nothing wrong. They also said, in summary: • By removing the money from the UCA, Mr G lost the tax benefits of holding that amount within the ISA. • When a withdrawal is undertaken, a warning sign does pop up on their online platform alerting customers to this before completing the transaction. • As £19,544.80 of the year’s ISA allowance had been used, it had left Mr G with a remaining subscription of £455.20. • Had Mr G selected the UCA to make the trade from, it would’ve advised him that he had the full £20,000 to invest as that amount was already in the UCA and part of the subscription allowance. By opting for a bank account to use for the trade, this meant that he would’ve been informed he could only use £455.20 as that was the remaining

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allowance. • As the money had been removed from the UCA prior to Mr G telephoning HSBC, they were unable to look at their system to see what he was seeing and to guide him through how to proceed. Mr G was unhappy with HSBC’s response, so he referred his complaint to this service. Mr G explained that despite what HSBC had said, he never received a pop-up warning about losing his ISA allowance if he withdrew his monies. Mr G explained that he had been using HSBC’s portal for over six years and well understood the process of how to fund his ISA. The complaint was then considered by one of our Investigators. After speaking to HSBC, they said: • The statement made in their final resolution letter about a pop-warning alerting customers when they withdraw from their ISA UCA was incorrect, as there currently are no warnings presented. • However, HSBC stated that there is wording added to every quarterly statement that informs customers that: “if you withdraw the cash from your ISA, you will lose the tax efficient status of those funds. You would not then be able to reinvest the proceeds without affecting your ISA allowance for the current tax year”. • HSBC stated that warning was also present in other parts of their public website. After considering matters, our Investigator concluded that HSBC hadn’t treated Mr G fairly. She went on to say that HSBC should have done more to inform Mr G of the consequences of moving his money before the transfer out of the UCA took place. She also felt that had he seen a clear message, he wouldn’t have moved his funds. Our Investigator felt that HSBC should pay Mr G £100 to apologise for the inconvenience caused. HSBC, however, disagreed with our Investigator’s findings. In summary, they said: • They cannot agree that an error has been made within the processing of the transactions or the way in which the system functions. • The view implies there is an obligation to provide a pop-up warning to the customer, and while they acknowledged this might be desirable, they do not believe there is any requirement to do so. Furthermore, they have received other decisions from this service on similar cases which indicate the warnings provided in quarterly statements, the KFD and the public website are sufficient to inform customers and therefore otherwise reject the merits. • This notwithstanding, they were prepared to offer the £100 in respect of the service and incorrect information provided within the final response letter. In addition, Mr G also disagreed with our Investigator’s findings. In summary, he explained that: • It was also HSBC’s responsibility to include a clear warning regarding such an important and irreversible consequence. He would never have proceeded with the transfer had he known the implications. Given HSBC’s size and reputation, he would expect their digital platform to have adequate safeguards and warnings in place, and their customer service to handle such situations with greater care. • The impact of this error has been severe and ongoing for many months. As someone

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working in the banking sector, losing his ISA allowance has caused considerable distress, frustration and embarrassment. He had planned to invest his full £20,000 allowance for the year, and being deprived of that opportunity through no fault of his own has been deeply disappointing. • He was misinformed about the existence of warning messages that, in reality, do not exist. This was particularly upsetting, as it gave the impression HSBC were attempting to dismiss his complaint rather than take responsibility. Our Investigator was not persuaded to change her view as she didn’t believe either party had presented any new arguments she’d not already considered or responded to. Unhappy with that outcome, Mr G then asked the Investigator to pass the case to an Ombudsman for a decision. After carefully considering matters, I wrote to both parties explaining that I was minded to reach a different conclusion to that of our Investigator and not uphold Mr G’s complaint. This window aimed to give both parties the opportunity to consider what I had to say and provide any comments before I reached my final decision. What I said in my provisional decision: I have summarised this complaint in less detail than Mr G has done and I’ve done so using my own words. The purpose of my decision isn’t to address every single point raised by all of the parties involved. If there’s something I’ve not mentioned, it isn’t because I’ve ignored it - I haven’t. I’m satisfied that I don’t need to comment on every individual argument to be able to reach what I think is the right outcome. No discourtesy is intended by this; our rules allow me to do this and it simply reflects the informal nature of our service as a free alternative to the courts. My role is to consider the evidence presented by Mr G and HSBC in order to reach what I think is an independent, fair and reasonable decision based on the facts of the case. In deciding what’s fair and reasonable, I must consider the relevant law, regulation and best industry practice. Where there’s conflicting information about what happened and gaps in what we know, my role is to weigh up the evidence we do have, but it is for me to decide, based on the available information that I've been given, what's more likely than not to have happened. And, having done so, I’m not planning on upholding Mr G’s complaint - I’ll explain why below. I very much appreciate Mr G’s frustration at not being able to undertake the transaction he wanted when he signed into HSBC’s portal on 14 June 2025. However, whilst I accept that he contacted HSBC’s telephone helpline and was informed that the investments team weren’t available until Monday 16 June 2025, having listened to that call, at no point was he advised to transfer his monies out of the ISA and back to his bank account. So, the withdrawal was initiated by Mr G in response to the system message he observed, rather than on the instruction or suggestion of HSBC. I also accept that HSBC’s portal didn’t forewarn Mr G that by removing the funds from the ISA, he wouldn’t be able to put them back into his investment within the same tax year, but I am satisfied that the risks of doing so are adequately set out elsewhere. Having seen HSBC’s statements that were issued to Mr G, I’m of the view that the risks of removing monies from an ISA are clearly articulated, as it also is on HSBC’s website. And, having also looked at the Key Features Document that sets out the mechanics of how Mr G’s plan works that he would’ve been provided with at the outset of setting the ISA up, it states: “Any money withdrawn from the ISA Account cannot be reinstated later without impacting your annual

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ISA subscription limit”. So, it seems clear to me that HSBC have signposted the impact of taking monies out of the ISA and not being able to re-add those funds within the same year. Having considered industry practice and regulatory expectations, I am not aware of any requirement for firms to provide real-time digital warnings before an ISA withdrawal. While such warnings may be desirable, the FCA rules require that consumers are given clear and comprehensible information about the nature and consequences of their product. In my view, the information HSBC provided in the Key Features Document, their quarterly statements, and the publicly available material on their website meet this requirement by setting out, in plain terms, that ISA withdrawals cannot be reinstated without using new allowance. I have also considered what Mr G has told this service about his occupation; he’s explained that he works within a banking role. Whilst I’m not privy to specifically what that entails, I don’t think it would be unreasonable for someone who is working within a retail banking position to know the impact of extracting funds from an ISA within the tax year. And, even if I set aside the fact that Mr G works in financial services, I do appreciate that knowledge and experience will vary among consumers. But where a firm has already provided clear documentation describing a key product feature, I consider it reasonable to expect the customer to take that information into account when deciding how to operate their ISA. I don’t believe this places an unfair burden on customers; rather, it reflects that financial products rely on both proper disclosure by the firm and responsible decision-making by the consumer. Within HSBC’s complaint resolution letter, they stated that their portal should have generated a warning message to Mr G about the impact of withdrawing money from his ISA. HSBC later confirmed that to be inaccurate but importantly, it didn’t influence his original decision or alter the outcome. Whilst I think it’s unfortunate that Mr G was given misleading information within that letter, given it was done so after the withdrawal had already been undertaken, I’m not persuaded that it’s made a material difference to the outcome here and as such, I’m not minded to instruct HSBC to pay him any compensation. Responses to my provisional decision After considering what I had to say, HSBC replied stating that they had nothing further to add. Mr G didn’t provide any further comment. 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. As neither party have provided any new information that’s made me change my mind, it therefore follows that I have reached the same conclusion and for the same reasons that I set out in my provisional decision above. My final decision I’m not upholding Mr G’s complaint about HSBC UK Bank Plc and therefore I won’t be requiring them to take any further action on the matter.

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Under the rules of the Financial Ombudsman Service, I’m required to ask Mr G to accept or reject my decision before 13 May 2026. Simon Fox Ombudsman

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