HSBC has rushed to head off complaints from small businesses that found the bank had frozen or closed down their accounts as part of a crackdown on financial crime.

Hundreds of small firms are thought to be affected, whose businesses range from an avocado importer to marketing and design companies.

Britain’s biggest bank, which has faced accusations of reacting slowly to the debacle, said that after becoming aware of problems in the past week, it was putting extra staff on its helpline and speeding up the process for dealing with complaints. It said staff were reducing the amount of time to unfreeze an account once a review had been completed.

It stressed that business customers were sent several letters asking for information on their dealings with overseas suppliers over a three-month period, asking customers to make an appointment via the telephone or in a branch. A spokesman said problems occurred when customers failed to respond, responded late or provided partial information.



A number of small firms claimed their accounts were suspended without prior notification.

Calan Horsman, whose company Loogun makes a hand-held water gun for toilet cleaning, said he was left with stock stuck in China, in default to suppliers and was unable to pay staff after the business account was frozen. He said he sent 60 emails to various people at HSBC and spent 18 hours on the phone. He eventually managed to close the account and transferred the funds to another bank.

Horsman said the company lost a month in its production schedule as a result – which means a new product that was due to launch before Christmas has been delayed into the new year. “It means we’ve missed the entire festive period.”

He was told by HSBC that he had provided incomplete information and the bank “apparently left a voice message but because I didn’t respond, they suspended our account 24 hours later”. He believes that the issue was a shareholder deposit the firm had received as part of a funding round that was judged to be unconnected with his business.

HSBC said: “As part of our efforts to stop financial crime, we are conducting detailed ‘KYC’ reviews in which we ask customers to provide information about themselves and their businesses. 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.

“We apologise for the inconvenience this causes, but urge customers to respond to our requests as promptly and comprehensively as possible. If we don’t receive all the information we need we may be forced to restrict services or, as a last resort, to close an account. We want to work with customers to ensure we don’t have to do this.”

Kelly Molson, co-founder of design agency Rubber Cheese, tweeted in August: “14.5 years as a @HSBC_UK business customer, I’m utterly disgusted at the way we’ve been treated. No notification of account suspension.” and “No timeframe for lifting suspension. I can’t make payments, card payments are being blocked. You’ve effectively shut down my business.”

HSBC has about 1 million business customers in the UK.



One small business owner said one of the problems was that many firms did not have bank managers they could talk to, but had to go through inexperienced call centre staff in Nottingham.