I am a doctor who runs a busy medical practice with the NHS and privately.
Our private clinic account was suspended when one of our patients made an erroneous payment.
We have submitted all the documents twice to HSBC now showing this, including once in branch and online.
Our account is still suspended and we are unable to pay our nurses and staff, or obtain essential medications/treatments for our patients, some of whom are very ill. What can we do?
A doctors surgery was unable to pay staff or get treatment for patients due to a frozen account
Grace Gausden, This is Money, replies: Anyone having their bank account frozen would be frustrated but it is particularly worrying when it means that patients aren’t able to receive their vital medical treatment as a result.
The reason your clinic’s account was frozen was due to one of your patients making a payment of £590 to it in error after selecting the wrong recipient when trying to pay for another bill.
She immediately contacted you to let you know and also emailed HSBC to advise of the mistake.
However, despite the patient and clinic sending the banking giant proof of the erroneous transfer, the account was left locked for three weeks before I stepped in.
This meant that the clinic could not withdraw any money, if needed, and all standing orders and direct debits were paused.
As a result, none of the nurses and staff have been paid their salary for last month and you add that the clinic could also not get the treatments needed for patients.
Clearly, it is essential that was rectified so patients are not without medication.
You went to the local HSBC branch and have called the bank consistently but say you have not received any help at all – nor any indication when the account will no longer be suspended.
This is Money contacted HSBC to find out why there had been such a delay in freeing the account, especially when proof had been provided to show exactly how the error was made.
In response, the bank admitted it had taken too long to restore the account but said it has now released it.
An HSBC UK spokesperson replies: ‘We’re sorry for the inconvenience which this has caused, we strive to provide a high level of service for our customers and regrettably on this occasion fell short of what we would expect.
‘We’ve been in touch with [the reader] to apologise and full access to the account has been restored.’
It said the account was frozen correctly in line with its fraud prevention procedures but when the case was reviewed there was a delay in reopening the account.
It added when any charges are incurred as a result of restrictions being in place it would review these on a case by case basis.
Delay: HSBC have apologised for the long wait after the bank froze a business account
Why are customer accounts frozen?
There have been reports of a large number of customers having their bank accounts frozen which, understandably, can cause major issues.
However, after questions were raised with the Financial Conduct Authority about the large amount of accounts being frozen, it said it is not aware of a ‘substantive cross-sector issue of banks freezing accounts for no reason’.
It added while it is difficult to say why a bank has frozen a customer’s account, banks are required to have appropriate systems and controls that counter the risk that customer accounts are misused for the purposes of financial crime.
Banks must also have policies and procedures in place to identify and report suspicions of money laundering or terrorist financing.
Essentially, there are a number of reasons accounts could be frozen but it is normally down to what the bank considers to be suspicious activity.
This could be because a large number of payments have been made or even a one off payment that is much higher than usual incomings.
However, frustratingly, banks are not allowed to tell customers when they’re being investigated and thus, cannot explain why.
We are also often met by ‘cannot tell you for security reasons’ when we take bank account closure cases to them.
These regulations are in place to ensure bank account owners are not ‘tipped off’, which could, in some circumstances, lead to more criminal activity.
What can customers do if their account is frozen?
The FCA says any investigations into customer accounts should be made in a ‘reasonable’ timeframe and people should not be denied access to their funds unnecessarily.
It added it expects banks to communicate with customers and in cases where it chooses to shut an account indefinitely, where possible, explain clearly why this is.
However, ultimately, there is little customers can do when their account is frozen – and little chance of getting any compensation for financial troubles during the time of the account being inactive.
One step customers who believe that their account is shut down or frozen without warrant can take is complain to the Financial Ombudsman who will review the case and make a judgment.
It may also be worth getting legal advice if you feel you have been treated unfairly.
If your account is closed, it can make it incredibly difficult to then open a new one.
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