Firms fight back over HSBC cash crackdown

FURIOUS small business owners last night hit back at HSBC after it threatened to freeze hundreds of accounts in a crackdown on financial crime.

Britain’s biggest bank is ramping up scrutiny of clients with foreign links after it was fined £1.5bn in the US for laundering money for Mexican drug cartels.

But the Federation of Small Businesses yesterday claimed its crackdown was hampering small firms across the UK whose accounts had been frozen or threatened with closure despite bosses complying with requests for information.

It is thought to have potentially disrupted payments of millions of pounds to staff and suppliers, with those paying people abroad or with foreign exchange accounts hit the most.

Those affected include a Fair Trade handicrafts business that pays suppliers in Indonesia, as well as Irish YouTube video blogger Hazel Hayes, who is based in London.

HSBC last night apologised to businesses who had mistakenly had their accounts frozen but said a lack of response from some had forced it to do so ‘as a last resort’.

But Mike Cherry, the Federation of Small Businesses’ chairman, said some firms had complied with HSBC’s requests for information only to find out the bank had frozen their accounts anyway.

He called on HSBC to ‘immediately’ help those who had unfairly been affected.

Cherry told the Mail: ‘ Amid unprecedented uncertainty and spiralling costs, one glimmer of UK economic hope is increased overseas trade among small firms.

‘But thanks to this overbearing HSBC crackdown, we’re seeing the debilitation of innocent firms that are driving this growth.

‘They’re complying at every stage of HSBC’s investigations, supplying all the evidence requested, and then waking up to see their accounts frozen without warning.

‘Of course the bank must take a zero-tolerance approach to illegal activity – but it must also be certain of suspicions before action is taken against the exporting strivers that drive our economy forward.’

HSBC said it started contacting its business customers in March requesting details on their overseas dealings and that the process is ongoing.

The bank is tightening its rules on money transfers in a bid to crack down on financial crime.

It was fined in 2012 for ‘past mistakes’ that saw it allow rogue states and drug traffickers to move billions around the financial system and evade banking watchdogs.

An HSBC spokesman appealed to businesses who were affected by the problem to get in touch, adding: ‘We urge customers to respond to our requests as promptly and comprehensively as possible.’