An HSBC client spoke of his three-month ordeal for the release of his bank account after the creditor closed it without warning, leaving him unable to pay his staff.
Agustin Larocca, 37, opened an account with HSBC in 2015 to manage his small business by selling vaping products.
However, in July 2017, he claims to have woken up to find out that his corporate debit card had stopped working.
In panic, Larocca says he went to his local branch, where he was told that his account had been “frozen”.
He says the staff told him they were unable to provide a reason for their decision – along with any advice on how to free his funds.
“This left me in trouble and in limbo,” explained Larocca in a letter viewed by Mirror Money and addressed to HSBC, the Financial Ombudsman and several MPs.
“I didn’t have access to my cash flow to run my business.”
After several other visits to his branch, Larocca was informed that he would have to contact HSBC’s commercial banking division to arrange a meeting to discuss the reasons for their decision.
Larocca claims to have tried it, however on every occasion he hit a wall.
The bank later claimed to have written to him several times and to called him in January 2017 to discuss his account.
Has your bank account been blocked without warning? Get in touch: [email protected]
Larocca claims to have never received these letters to date.
“At the time I had around £ 76,000 in my account,” explained Larocca.
“It was frozen on July 13 and released in mid-September.
“After spending a great deal of time and effort with HSBC’s customer service and safeguard department and not getting a solution, I made the decision to contact the HSBC CEO. It actually helped me further solve the problem. . “
Mirror Money got in touch with HSBC – which, after three years, has now agreed to pay Agustin £ 1,000 in compensation.
“As part of our efforts to stop financial crime, we are conducting detailed” KYC “reviews in which we ask customers to provide information about themselves and their businesses,” said a HSBC note.
“We allow several months for this process because we may have to speak to customers several times to acquire additional data and clarify what they have told us.
“We apologize for the inconvenience, but urge customers to respond to our requests as quickly and completely as possible.
“If we don’t get all the information we need, we may be forced to limit or suspend certain services such as foreign currency payments or, as a last resort, close their account. We want to work with customers to make sure we don’t have to do it. . “
But the case of Agustin is not unique.
“Hundreds of frozen bank account cases”
Mirror Money has heard from dozens of customers and companies who have also frozen their bank accounts without warning, some for months, others for years, without explanation.
Lawyer John Binns specializes in anti-money laundering cases at the BCL law firm – and claims to have seen a spike in clients who have been accused of this in recent years.
Binns claims that it currently has a number of customers who are subject to freezing of accounts and who are struggling to cope with the harsh measures that banks are taking more and more.
“We haven’t kept track, but we can safely say that we’ve had hundreds of questions about this in the past two years, from companies and individuals,” he said.
If a customer makes an unusually large transfer or acts abnormally, for example, it may appear as a red flag on the bank’s database.
And banks are, by law, obliged to forward their suspicions to the National Crime Agency (NCA).
Once addressed, they are under no obligation to explain the reason for the anti-money laundering law.
” The main reason for these blockades are the statutory obligations of the Proceeds of Crime Act (POCA), “explains John.
“This makes it a crime for banks to deal with funds they suspect.
“Unfortunately, once reported to the ANC, there are real limits to what you as a customer can do. The bank often doesn’t tell you anything for fear of committing” killing “offenses, so you may be completely in the dark as to why they became suspicious.
“Even if you can try to interact with them, it may not help and you have to assume with caution that everything you give them will be shared with the ANC, the police, the HMRC or any other state agency that may be interested. “
John says it is possible to send an Interested Access Report (DSAR), but this will take a month to process and the bank could hold onto the data if they believe it could harm an investigation.
“You can also file a complaint with the Financial Ombudsman, although it is unlikely to produce rapid results,” he says.
“If the bank asked the ANC for consent, then a statutory period intervenes – the first seven working days, then another 31 calendar days if they refuse. After that period, the bank is legally authorized to do what it was requested to do. consent to do.
“If the authorities want to freeze your funds after that, they will need a court order. We are used to dealing with orders like that and any other fall, like a criminal investigation.”
However John says he is seeing more and more cases where banks are not asking for consent.
“Instead they are simply sitting on funds indefinitely. This is a very different type of problem.”
What to do if your account is blocked without warning
The first thing to do is to recognize that the bank has its obligations and does not act maliciously towards you.
“If you can figure out what their problem is and give them a clear, safe and simple answer, then this can do the trick – but keep in mind that it is rarely easy to dispel suspicions once the bank has trained them,” says John. .
“It may be worth filing a DSAR and / or a complaint and, if you can allow it, to train lawyers. As financial crime experts, we can help you see things from a bank perspective and prepare you for what may come next , which could include court orders or criminal investigations. Often a blocked account is the first sign that something more sinister is in the pipeline. ”
However, be prepared for a long wait.
“Unfortunately, unless the bank has asked for the ANC’s consent, there is no particular timetable or easy path to getting your money back: you can threaten to sue, but following this could be an expensive process,” explains John .
“Even where they have asked for consent, the time required by law – seven working days plus 31 calendar days – is rather long from the customer’s point of view.
“If you haven’t already done so, it may be worthwhile to formally instruct a transfer to another account: they won’t do it immediately, but it may require the bank to request consent if they aren’t already.”
If the bank cannot be persuaded and the statutory deadlines have passed, you may be able to report them, but even this will have no guaranteed results, says John.
“Courts have tended to sympathize with banks’ position in having to comply with POCA, and you may have to make some effort to prove that your funds are legitimate. It’s a very unfortunate and very unfair side effect of a system that is designed to stop criminal activity, but he threw his net too broadly. “