Marie and Shaun Langley are just an ordinary Sheffield couple – she’s a childminder, he’s an IT worker.
Yet, in an extraordinary tale, their bank, HSBC, has turned them into financial pariahs, banning them from having an account, closing their deposit and Isa accounts, and leaving them unable to pay for food, petrol or life’s other essentials. And every time they try to get sense out of the bank they are met with a point-blank refusal to even discuss the matter.
The couple are not in financial difficulties, and have done nothing they can think of that could explain why their accounts have been terminated so inexplicably. But HSBC is the bank fined £1.2bn by US authorities for laundering billions for drug cartels, terrorists and rogue states, and the Langleys fear they have somehow been swept up in the draconian approach the bank has taken to some accounts ever since.
In a process known as de-risking, customers deemed a potential threat are dumped to avoid punitive fines from the US authorities. The trouble is, the computer systems used to flag up such threats can produce strange anomalies.
Shaun Langley is hardly a threat to the bank or the global financial system. He is actually a former employee of HSBC, and has held an account there for 20 years. He is self-employed, but his clients are hardly the stuff of drugs or terrorism. Past customers include M&S and Lloyds bank – and he is currently working for South Yorkshire Police.
HSBC won’t tell the Langleys why they have been frozen out; nor would they say anything when the Guardian intervened. To be fair to HSBC, it is in an invidious position, because if it explains why it has frozen an account it may fall foul of “tipping off” rules designed to prevent criminals and terrorists from knowing someone is on their tail.
The Langley’s nightmare began in Sainsbury’s, when Marie’s debit card was declined as she tried to pay. She went to a cash machine, only to find that transaction was also refused. Stranded with her shopping unpaid for, she called her husband. Worried that their account may have been hit by fraud, he immediately tried to log on to HSBC online. He then discovered that their joint account was inaccessible.
He called HSBC, and only after lengthy badgering of call centre staff did the bank admit the account had been frozen. “Apparently a letter, which I never received, had been sent out two months previously warning me that the account was to be closed, but no one would tell me the reason,” says Shaun.
Desperate for some cash, he convinced HSBC to unfreeze the account – it agreed for one day only – to allow the couple to withdraw enough cash to buy food and petrol. He headed straight to his local HSBC branch to withdraw cash to tide them over, while his wife went to Asda. But en route his wife called – she was standing at the checkout with a full trolley, and her card had been declined.
When Shaun reached the bank, he was told the block on the account had been put back on, and this time there wouldn’t be any temporary reprieve. “In fact, I was told that the block shouldn’t have been removed in the first place. The assistant read me out a short statement, printed on a piece of paper, which offered no explanation as to why I was forbidden access to any of my funds.”
The Langleys now have no means to buy food or pay bills, and Shaun fears he is driving illegally as he is unable to renew his car insurance. When he went to a branch of Nationwide, it said it had no problems accepting him as a customer. But while the couple thought that might be the end of their problems, it wasn’t: HSBC refused to transfer his direct debits and standing orders under the seven-day switching agreement. “I can’t even give my daughter her school dinner money,” says Shaun.
The Langleys remain bewildered by their experience. Shaun has no overseas links, and all he can think of is that as a self-employed worker he frequently has money transferring in and out of his account. “I don’t transfer on any set day so the bank cannot see a regular wage going in, just irregular payments. If I’m honest, I can see that this might not meet its risk profile, although there is nothing untoward, of course.”
According to the Financial Ombudsman Service, although banks are generally obliged to provide a reason – and notice – for closing an account, they can on rare occasions do so without either: such as if they suspect illegal activity.
In a statement, HSBC said: “We never take the decision to close a customer’s account lightly. We do appreciate this closure has not taken place as smoothly as it should have, and in recognition of this we have apologised to Mr Langley and given him £300 in compensation.”
Langley, who has still not been repaid the £512 balance stuck in his defunct account, considers this gesture derisory, and is considering taking his case to the ombudsman. “How can a respected financial organisation treat a customer of 20 years in this way? I feel like a criminal.”
Guardian Money has reported extensively about sudden and unexplained account closures, many by HSBC. NatWest has also been accused of dumping customers, including an economics professor with an MBE writes Anna Tims.
This week we heard from John Proctor, a British educationalist in Pakistan, who is sure his work with schools in his adopted country is the reason his HSBC account of 47 years has suddenly been closed. “I assist in the improvement of education in developing countries,” he says. “But they make it seem I’m a criminal for working in Pakistan.”
A British migraine charity, the International Headache Society, is another baffled victim of “derisking”. NatWest has closed its long-standing accounts worth £500,000 without explanation. Its treasurer, Wendy Thomas, reckons her crime was to request a series of large cash withdrawals to fund the living costs of student neurologists at the International Headache Congress in Spain.
The Financial Action Task Force has criticised banks for using security regulations as a fig-leaf to drop unprofitable clients, and the Financial Conduct Authority has warned that whole categories of customers, including charities and Britons with families in countries deemed high risk, could be left in limbo.
“We expect banks to recognise that the risk associated with different individual business relationships within a single broad category varies, and to manage that risk appropriately,” its website says. “While the decision to accept or maintain a business relationship is ultimately a commercial one for the bank, we think there should be relatively few cases where it is necessary to decline relationships solely because of anti-money laundering requirements.”
Currently, it is up to banks to decide who they do or do not want as customers, although the Financial Services Ombudsman can rule whether rejected customers have been treated fairly. A new EU directive will change this, giving citizens a right to a basic account – but this won’t apply in the UK for another year.
This article was written by Anna Tims and Patrick Collinson, for theguardian.com on Saturday 3rd October 2015 07.01 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010