LONDON (Reuters) - HSBC HSBA.L has offered compensation to at least two of the small British businesses caught up unintentionally in a crackdown on illicit money, seeking to limit the damage from an operation that has been criticized by lawmakers and industry.

A branch of HSBC Bank is pictured in Cairo, Egypt July 30, 2017. REUTERS/Mohamed Abd El Ghany

Reuters reported on Aug. 24 that HSBC had closed or frozen the accounts of dozens of apparently innocent small businesses in the crackdown. Sources with knowledge of the matter have since told Reuters the number of companies affected is in the hundreds.

Video game developer Richard Davey drew widespread attention on social media this week with an article detailing his woes after HSBC froze the account of his company, Photon Storm Ltd.

In the article, published on Monday on the website Medium, Davey said his business was set to lose water, telephone and internet services as a result of the account block, and that one staff member quit after failing to receive his salary.

The bank unfroze his account on Tuesday and rang him with an offer of compensation, Davey told Reuters.

Amanda Murphy, head of commercial banking for HSBC UK, confirmed the bank had offered compensation to some clients but declined to say how many or what amounts had been paid out.

“If HSBC has disadvantaged a customer in any way we’ll always seek to make it right,” she told Reuters on Thursday.

HSBC has unblocked more than 15 small business accounts whose cases were brought to the bank’s attention by Reuters, sources at the companies affected said.

So far, two of those said they had been offered compensation.

While such payouts are unlikely to have a significant impact on HSBC’s bottom line, the bank faces reputational damage among customers, lawmakers and business associations over how it handled the closures, which happened in July and August, and the subsequent complaints.

HSBC has been trying to tighten its checks on business customers after it received a $1.9 billion fine in 2012 for allowing itself to be used to launder drug money from Mexico.

HSBC’s Murphy said the bank has in recent weeks begun hiring staff and transferring them from other departments to better manage the system.

“For every complaint we have received, myself or a member of my team has been allocated to one of those individuals to call the customer and we are actively resolving their cases,” she said.

The bank previously told Reuters that it tries to contact customers before blocking their accounts. But more than 20 companies whose funds were frozen told Reuters that they had complied with all requests for information and been told they had answered to HSBC’s satisfaction.

Davey said he has been in limbo for nearly a month after his accounts were frozen without warning on Aug. 10, with HSBC staff unable to provide any information on why it happened or when his case would be resolved.

“We need to hear fully and openly from HSBC on this,” said Godfrey John Bewicke-Copley, co-chair of the all-party parliamentary group for fair business banking.

“If these accusations are true, it is another damning revelation about poor practice from the institutions that millions of people and businesses should be able to trust,” he said.

Companies who have contacted Reuters in recent days to talk about their experiences include a Kent-based tea shop, a music talent agency, a maker of virtual reality headsets and a luxury travel boutique.

The companies are all in the small business sector which the government wants to encourage to thrive after Britain leaves the European Union.

“One glimmer of UK economic hope is increased overseas trade among small firms. Thanks to this overbearing HSBC crackdown we’re seeing the debilitation of innocent businesses that are driving this growth,” said Mike Cherry, National Chairman of the Federation of Small Businesses.