Shamed HSBC shut accounts of small firms for 7 weeks
SMALL firms have been left unable to pay suppliers, forced to stop new products, and seen reputations destroyed after HsBC locked them out of bank accounts for up to seven weeks.
Business owners say they have had to put orders on hold and stop development of new products after being forced to battle with the bank when it shut down their accounts in a botched crackdown on financial crime.
HsBC was forced to tighten its rules on money laundering after being fined £1.2bn by Us authorities for handling cash on behalf of Mexican drug cartels and murderers.
But its overzealous approach has hit British entrepreneurs who sell their wares overseas. Many have been asked to fill in huge forms demanding highly personal information to prove they are not crooks.
and even after complying with the bank’s requests businesses still had their accounts blocked.
Luxury e-cigarette firm Bellmonte, had its account frozen for almost seven weeks until a public outcry forced HsBC to do something.
another company, Hertfordshire building engineer MHL Consulting, was hit because boss Martin Layzell returned an innocuous- looking questionnaire just two days late.
Because he did not supply the details on time, HsBC said his account would be closed in 65 days and he had no right of appeal.
the decision was reversed only when the scandal came to light, and Layzell said he felt the lender then tried to pin the blame on his branch manager when it wasn’t her fault.
Entrepreneurs have told the Daily Mail they were left in the dark. they complain that local bank managers were scrapped, meaning they had to spend hours on hold to employees in a call centre, and that bank staff they knew well were forbidden from sharing information.
Bosses told the Mail they were also concerned about the harm a frozen account could cause to their good name. Many faced weeks of deadlock trying to get the problem solved – finding the bank only backed down after it became public.
the number of firms hit is believed to be in the low hundreds, although HsBC refused to give a figure. It also declined to say how many cases had been resolved, and how many firms were still in limbo.
MPs last night accused HsBC of bullying tactics. Conservative Chris Philp, a former member of the treasury select Committee, said: ‘HsBC’s conduct is a complete disgrace – they’ve treated their customers shockingly, and I call on them to immediately reinstitute their banking services.’
Labour MP Helen Goodman said: ‘there are big structural issues already facing small businesses. they certainly don’t need their accounts suspended without notice. It is completely unacceptable.’
to avoid a criminal prosecution over Mexico money-laundering – which saw Us senators label it a ‘financier to drug gangs’ – HsBC had to install an independent monitor to oversee antimoney laundering procedures.
HsBC said: ‘We allow several months for this process because we may need to speak to customers multiple times to acquire additional data and to clarify what they’ve told us. If we don’t receive all the information we may be forced to restrict services or, as a last resort, to close an account.’