The Daily Telegraph - Saturday - Money
Did HSBC dump me for buying Swiss francs?
This reader had banked with the firm for 20 years when, without being given a reason, he was ‘sacked’. By Tara Evans
‘There is nothing wrong with buying Swiss francs. It’s completely legal’
When Dan Strauss received a letter from HSBC stating that it would be closing his accounts after he’d been a customer for more than 20 years, he thought there had been some kind of mistake.
Mr Strauss, a 53-year- old voiceover artist who lives in Cambridge, holds several accounts with the bank, including his main current and two savings accounts.
A few weeks ago he received a letter from the bank that read: “At HSBC we carry out regular reviews of the accounts, products and services we offer our customers.
“We recently reviewed your accounts and I am sorry to tell you that we are no longer able to provide you with banking products and services.”
He was granted two months to make alternative banking arrangements but given no reason for the termination of his longstanding relationship with the bank.
Mr Strauss said: “At first I thought it was an admin error because there was no explanation. I’ve never done anything that would warrant this. I’ve never put anything unusual through my account.
“The only thing I can think of is that I bought a substantial amount of foreign currency – Swiss francs – before Brexit through a mainstream foreign exchange firm. There is nothing wrong with that. It’s completely legal. There is no history of me doing anything untoward.”
Many investors, including professionals, made similar purchases in the expectation that a Brexit vote would cause other currencies to gain in value against the pound.
Mr Strauss contacted the bank and was informed, first over the phone and then in a branch, that the letter was legitimate and accurate. Once again, no explanation was given.
When Telegraph Money approached HSBC, a spokesman said: “A decision to close a customer’s account is never taken lightly, and this difficult decision would only be made following a detailed review of the account.”
We asked the bank to explain the scenarios in which an account might be closed, in the hope of warning readers how they could avoid getting into this situation themselves, but HSBC would not go into specifics.
It also said it did not force a large number of account closures, although it wouldn’t disclose numbers.
Under banking rules, institutions have no obligation to keep accounts open and, frustratingly, they do not have to give a reason if they decide to close them.
Customers who take umbrage with an account closure have little comeback.
If they take the complaint to the Financial Ombudsman Service it is unlikely to overturn the bank’s decision but will look to see if the account’s terms and conditions had been followed correctly.
Unfortunately, the majority of lenders stipulate in their terms and conditions that they may close an account at any time as long as reasonable notice is given, and need not explain why.
The ombudsman told Telegraph Money that a bank might decide to close an account because it suspected fraudulent activity or that it might simply be down to a wider policy decision about the type of customers it wants.
Banks will usually give customers notice of an account closing. But, if deemed necessary, they can choose to sever ties with a customer with immediate effect.
A spokesman for the Financial Ombudsman Service said: “The most frustrating thing for people in this situation is that the bank does
not have to give you a reason for closing the account – and most provide little information as to why this is the case.
“There are practical reasons for this; for example, the law requires a bank to report any suspicion of illegal activity, but discussing it with their customer could involve them committing a criminal offence.
“So it’s likely a bank will apply a blanket approach of not explaining the reason for an account closure regardless of the reasons.”