HSBC UK Bank Plc · DRN-5693593

The complaint The estate of D complains HSBC UK Bank Plc unfairly closed an account. The estate is represented by the late D’s father – who I will refer to as K. What happened In early February 2024 K applied for an account with HSBC for a specific purpose. K’s son (D) had sadly passed away, and he wanted an account that would receive a clinical negligence payout which he was expecting. K attended branch and HSBC set up an Appointee Account. The terms of this account state it is intended to manage Department of Work and Pension (DWP) payments. This account is very similar to an Executor account and K’s statements referred to this as an Executor account. K has provided Letters of Administration which confirm he is an executor for the late D’s estate. On 20 March 2024 K paid £820 in cash into this account. The account was then used for everyday spending. HSBC says the terms of the account specify the account should not be used for personal spending and K was informed of this. In June 2024 the account went overdrawn. HSBC contacted K regarding the overdrawn balance in June 2024, July 2024 and August 2024. As the overdrawn balance remained the account closed, with the overdrawn amount written off. K raised a formal complaint regarding the handling of the account – stating it was needed for the payout his late son was due and HSBC had failed to give him a chance to clear the overdraft. K also said he was due £25 compensation from service issues he had during COVID, and had this been paid to him the account would not be overdrawn. On 18 November 2024 HSBC wrote to K, with its final response letter. In this letter it explained the account had an overdrawn balance from 4 June 2024 and K was sent a monthly statement confirming this. The account was set for automatic closure on 4 September 2024, and K could reopen an account should he need one by attending branch. HSBC also said that it would be happy to credit K £25 compensation that had been agreed with him from a previous complaint, and asked K to confirm if he would like payment. K remained unhappy with the handling of his account and HSBC’s response. K referred his complaint to our service, explaining HSBC had failed to treat him fairly by closing the account and not giving him an opportunity to keep it open. K stated the £25 compensation due to him would’ve prevented the account from closing and HSBC failed to pay this. K said HSBC’s actions caused extreme distress and alarm and HSBC failed to provide fair customer service. In order to put things right K asked for punitive measures to be imposed to compensate the wrong. K also asked for his legal fees to be covered by HSBC. An Investigator gathered the relevant evidence to assess the complaint. In its submissions to our service HSBC said it had closed the account correctly, but that it accepts the information

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given to K was unclear. HSBC accepted it provided mixed reasons for the closure – with K being told it was due to account usage on one hand, and on the other he was told it was due to the overdraft. HSBC offered K £150 in recognition of the distress and inconvenience this poor service had. The Investigator completed their review and in summary, made the following recommendations: • It doesn’t seem the correct type of account was set up for K and his needs. An Executor account would’ve been more appropriate, as the Appointee account is for the management of DWP payments. • HSBC should’ve done more to inform K that the account would close if the overdraft was not cleared. • K says he was treated differently and discriminated against by HSBC. This was a new complaint point, and K would need to raise this as a separate complaint with HSBC. • The £150 offer made by HSBC to recognise its service failings is fair and reasonable. • As K is the executor of the estate, we can’t consider the impact of HSBC’s actions on him in a personal capacity. K responded and disagreed with the Investigator’s review. K stated HSBC owed him £25 and they gave false and misleading information in the lead up to the account closure. K said he was made to feel like a criminal when asked about how he was using the account, and the branch staff provided poor service. K stated HSBC should pay the legal fees and administration fees that had been incurred. As no agreement could be reached, the complaint was referred to an ombudsman for a decision. Whilst the complaint awaited review, further evidence was obtained from HSBC to better understand the account opening process and the type of account opened for K. I issued my provisional decision on 28 February 2025. Now the deadline has passed, I will issue my final 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. I’ve included my provisional findings below. First of all, I wish to pass my sincerest condolences to K – he has my deepest sympathy for the loss of his son. I'd like to thank K for his openness about his situation. I imagine this took considerable courage - bereavement can be very hard to speak about. So I thank him for his candour, bravery and sincerely hope he is being supported in dealing with the circumstances he has been facing, in particular his profound bereavement. He has my deepest sympathies. I appreciate the ongoing issues he has with HSBC has been an additional burden to him and added to his distress at this challenging time. K has made a number of points to this service, and I’ve considered and read everything he has said and sent us. But, in line with this service’s role as an informal body, I’ll be focusing on the crux of their complaint in deciding what’s fair and reasonable here. My review has started with the account that was opened for the estate. I can see K already had existing personal accounts with HSBC, and he attended branch to explain he required a

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specific account to receive funds following the clinical negligence case he had ongoing against the NHS. The account opened by HSBC was an Appointee account. As part of my review, I have asked HSBC to clarify why this account was opened. The Appointee account checklist and terms state that it is to be used to manage DWP payments on behalf of an incapacitated individual. This individual had to be over 18 and in receipt of DWP payments. In my view, this didn’t meet the needs K had set out. HSBC provided further information and explained that the Appointee account is very similar to an Executor account. As K had explained funds were due in, this account was opened as it would allow K to manage and separate funds as needed. HSBC explained the Appointee account is what is used for Executor accounts and they operate under the same umbrella. I think it’s helpful to highlight here to K that HSBC opened this account at his request based on the information he provided – the circumstances here are unique, and based on the internal notes I’ve seen, the branch staff sough to assist K given the sensitive nature of his circumstances by opening this account. Although I am not entirely satisfied this type of account was necessary for the purposes K has explained, I find HSBC took reasonable steps to try and assist him. When the account was opened HSBC said K would’ve been provided with terms and conditions. A key issue is in this complaint is that K used the account for personal spending, and the terms of the account do not allow this. The statements do show that the £820 that was deposited into the account was used by K for what appears to be day to day spending. I can’t say for certain what conversations took place between K and HSBC branch staff about how the account ought to be used and managed when he opened it. I do think that when HSBC noted general spending on the account it ought to have explained to K clearly how the account should be utilised, to remove any confusion or uncertainty. Especially given the account was new, and K had explained in detail to branch staff why he needed it. The spending on the account resulted in the balance going overdrawn. HSBC says it informed K of this in line with its normal process when an account goes into an overdraft. As the Appointee account has the same features as a basic bank account the overdraft needed to be cleared. I understand K says he wasn’t given an opportunity to rectify this. HSBC’s notes support its position that it did reach out to K to explain the account needed to be brought back into a positive balance. I am also mindful that multiple contact attempts were made and K had from June 2024 to September 2024 to credit the account. However, I do appreciate the distress the closure caused K given the purpose of the account. A key issue for K is that he was expecting a £25 payment from HSBC, and he thought this would credit the account and clear the overdraft. K says this was due to him as compensation for issues he had with HSBC during COVID. HSBC says it has no record of this, but was willing to pay this once K highlighted it. But I can’t see that there was an agreement for this to be paid into this specific account, and K held other accounts with HSBC. So although I appreciate K was expecting this payment, I don’t think HSBC acted unfairly by not crediting the account with this amount when it went overdrawn. K says HSBC ought to pay compensation for the impact of its poor service and handling of matters. It’s not in dispute that matters should’ve been handled by HSBC with more clarity and consistency. The evidence I’ve seen shows the account opening wasn’t properly considered, and I am not satisfied K was provided with the appropriate advice on what account – if any was needed in February 2024. When the account closed HSBC provided mixed information to K about the reasons for closure, which I can see added to inconvenience and frustration he experienced. In its referral to our service HSBC offered K £150 in recognition of these service failings. HSBC has confirmed it had added to a life marker event to K’s profile, which I think ought to

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have made it aware that accounts associated with K needed to be handled with extra care. K says this amount is inadequate and HSBC ought to cover legal costs and pay further compensation. I’ve weighed up K’s submissions in light of the timeline of events, and I am not persuaded further compensation is appropriate. This does not diminish the experience I know K had with the account and HSBC. Rather I find the £150 accurately reflects the impact of the inconsistent information provided. Reaching an award for distress and inconvenience is seldom straightforward. The issues involved are subjective by their very nature and the impact on the consumer can be difficult to determine. Taking the overall circumstances of the complaint into consideration I find this amount to be fair. I am also mindful that HSBC has offered to open another account for K if he requires one. I would encourage K to liaise with his legal representatives about whether a specific separate account is needed in anticipation of the payout the estate is due to receive. K says punitive measures should be taken given HSBC’s actions. Our awards are not intended to be punitive for businesses, and their fundamental aim is to recognise the impact on a consumer where there have been shortcomings. K has asked for legal costs to be covered, but I can’t see evidence of costs incurred in relation to this specific complaint has been provided. So it wouldn’t be appropriate for me to direct HSBC to reimburse the estate for these. I am also mindful that K has raised discrimination concerns. The Investigator explained K would need to raise this as a separate complaint with HSBC as it wasn’t included in his initial complaint. I would encourage K to contact HSBC directly about this issue, and he is free to refer the complaint to our service should he remain unhappy with its review. I’m sorry this isn’t the outcome K hoped for. I do hope my provisional decision provides some assurance that his concerns have been properly considered and sets out why I won’t be asking HSBC to take further steps than those outlined below. Putting things rights I am currently minded to direct HSBC UK Bank Plc to take the following steps to put things right: • Pay the £25 it agreed to pay K in its final response letter. • Pay an additional £150 in recognition of its service failings. • Assist K with a new account application should he require one. Responses to my provisional decision HSBC accepted my provisional decision. K contacted our service by phone and email to make additional, detailed submissions. I want to assure K that I have read his submissions carefully and listened to the calls he has had with members of staff. I will summarise the key points raised by K below. If I don’t refer to a specific point, this doesn’t mean I haven’t considered it. Given the extent of K’s submissions, I consider these to be the main issues that are connected to this complaint with HSBC. • K asked for an Executor account. HSBC’s decision to open an Appointee account was wrong, and it has misled him and acted fraudulently by opening the incorrect account.

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• HSBC has tried to prevent the receipt of the NHS settlement that was due to the estate. • DWP were not an agreed third party to the account. • K has reported the HSBC branch managed to the police and UK government for setting up an account without the permission of the account holder. • HSBC should compensate the estate of D for the costs incurred. HSBC has been aware of the estate costs and fees from inception. This is £405 per hour and £75 for each administration act carried out by K on behalf of the estate. • HSBC had a duty of care to a vulnerable customer and failed to explain the terms of the account. • There was no deliberate misuse of the account by K of the account – all expenses related to the management of the estate. HSBC has tried to defame K by suggesting he misused the account. • HSBC has put beneficiaries under extreme pressure, financial loss, extreme material distress, psychological harm and emotional harm, without reason. • K referenced general issues within the financial services industry, and the need to ensure fairness for those in a vulnerable position. I’m very aware that I’ve summarised the points K has made in his response, and in far less detail than K has, and I’ve done so using my own words. No discourtesy is intended by me in taking this approach. Instead, I’ve focussed on what I think are the key issues here. Our rules allow me to do this. This simply reflects the informal nature of our service as a free alternative to the courts. If there’s something I’ve not mentioned, it isn’t because I’ve ignored it. I’m satisfied I don’t need to comment on every individual argument to be able to reach what I think is the right outcome. I do stress however that I’ve considered everything K and HSBC have said before reaching my decision. There is very limited information in this case about what was discussed when K attended branch and asked for an account. I think all parties to the complaint can agree that the circumstances presented to the staff and the requirements were quite unique. K required an account so that funds could be paid in following a clinical negligence claim that was on- going. Based on the information presented an Appointee account was opened – this allowed K to transact on the account. K says the opening of this type of account amounts to fraud – he explicitly stated when he went to branch that he needed an Executor account, and probate documents were provided at the time to support this requirement. I understand K’s strength of feeling regarding HSBC’s actions – he believes its actions were deliberate and an attempt to prevent the payout from being issued correctly. As I acknowledged in my provisional decision, I do think greater clarity at the outset about K’s circumstances would’ve been helpful. However, I can’t see that the opening of this Appointee account caused issues at time K needed it. Once the account opened, funds were paid in and I can see K was able to utilise it to meet his needs and those of the estate. So although matters should’ve been dealt with differently, I can’t see that there was any malicious intention on HSBC’s part. This doesn’t mean its dealings with K were perfect, but I can’t see the staff acted in a way to deliberately cause harm. In his recent submissions K has explained he has taken further action against specific HSBC staff members with different authorities. I must highlight that our service looks at complaints against regulated businesses, and we are not here to comment on the role of individual employees. This means I won’t be commenting on the points K has raised about individuals or making any findings on the steps he has taken with other organisations. K feels strongly about the conduct of HSBC, and I can see that during calls to our service he feels passionate about how large organisations treat individuals, and the care they should

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exercise when dealing with sensitive situations. I fully appreciate K’s openness with our service about what motivates him and given his personal experiences I can see his pursuit of fairness and equity are important factors in his complaint. But I think it’s important to highlight that it is the role of the Financial Ombudsman Service to resolve individual complaints and to award redress where appropriate. We do not perform the role of the industry regulator, and it is not our role to comment on how businesses conduct their operations and the principles which they should follow. That’s the role of the regulator, the Financial Conduct Authority (FCA). So I’ve thought about K’s comments carefully, but I can’t comment on HSBC’s conduct in the manner he would like. K says the reference to the account being used for personal purposes amounts to defamation. K says all the usage in the account related to the management of the estate and were necessary expenses. I understand K would’ve found this matter upsetting, as he believes he was using the account appropriately. I do agree HSBC should’ve taken steps to clarify and reiterate with K how the account ought to operate – I can’t see that pro-active steps were taken here. HSBC has cited the use of the account as one of the reasons for its closure. But it also says the account was overdrawn which prompted the closure process to begin. The reason for closure wasn’t properly explained to K – and I do accept this added to his concern at what was already an upsetting time. However, I can also see that K was given an opportunity to bring the account back into a positive balance. Overall, matters should’ve been handled with greater care and clarity. Given the impact of the account closure, I consider the direction to HSBC to offer its assistance to K in opening a new account to be a fair resolution to this aspect of the complaint. A key issue for K is the costs incurred by the estate. He says HSBC was aware from the outset of the costs of the estate, which include legal fees and administrative fees. K says he has been acting on behalf of the estate – so these costs ought to be covered due to the time and administration taken up by the issue. As we are an informal service, complainants don’t need any specialist knowledge or representation to bring a complaint to us. I wouldn’t usually consider it fair to require a respondent, in this case HSBC to pay for costs incurred in referring a complaint to us. I can require a respondent to pay reasonable costs if I consider the circumstances make it fair and reasonable to do so. The complaint has taken up K’s time and resources – and I don’t underestimate the effort he has gone to in putting forward his concerns. But this doesn’t mean HSBC ought to cover costs to the extent he has outlined – and I can’t see there was an explicit agreement from HSBC that it would do this. I must also highlight that any costs K wishes to charge ought to be directed to the estate directly, as this is the entity K is acting on behalf of. I am also mindful of the fact that all submissions to HSBC and our service have come from K directly. I can’t see that he has appointed legal representation to assist directly in his dealings with HSBC or our service. For these reasons I don’t think it would be fair or reasonable for me to direct HSBC to compensate the estate of D in the manner in which K has requested. In response to my provisional decision K has reiterated the emotional and psychological harm caused to him by HSBC’s actions. He finds the redress I’ve suggested to be inadequate. I’ve weighed up K’s submissions, and I still find the £150 accurately reflects the impact of the inconsistent information provided. As explained our awards are not intended to punish HSBC, and as K is representing the estate I can’t consider the direct impact HSBC’s actions had on him. Rather I must consider the impact this had on the estate. Maters should’ve been handled with greater care and transparency by HSBC. But HSBC has agreed to assist K in the opening of a new account should the estate still require one. Based on K’s submissions, I consider this to be a key step in ensuring any funds to the estate can be appropriately handled.

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I fully sympathise with the position K is in – he is clearly managing various challenging issues following the sad passing of D. K says he wants to honour his son’s legacy and ensure matters are dealt with properly. I’ve thought about all of these points carefully and I am sorry his dealings with HSBC have added to his overall distress. But for the reasons I’ve explained above, I don’t think it would be fair to hold HSBC responsible to the extent he has requested. I know K will be disappointed with the decision I’ve reached, but I hope it provides some him with the assurance that an impartial service has carefully considered his complaint and concerns. Putting things right I direct HSBC UK Bank Plc to take the following steps to put things right: • Pay the £25 it agreed to pay K in its final response letter. • Pay an additional £150 in recognition of its service failings. • Assist K with a new account application should the estate require one. My final decision My final decision is that I uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask the estate of D to accept or reject my decision before 16 April 2026. Chandni Green Ombudsman

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