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

The Daily Telegraph - Your Money - - YOUR MONEY -

‘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.”

HSBC told Dan Strauss it was ‘no longer able to pro­vide him with bank­ing ser­vices’

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