03 August 2017 by Calan
I haven't written a post for some time as we're hard at work focusing on upcoming products. This is also not the type of post I enjoy writing but if it helps even one other business from going through what we are, then it's worth sharing the experience.
The 'Annual Review'
Back in January, I had an hour phone conversation with HSBC who were conducting an 'annual review' of our bank account in order to understand our business better. After chatting through the product itself, we discussed our supply chain, initial company funding, and our customers. They spent more time querying the countries we transact with than anything else. Lets face it, our business at this point is pretty straightforward, with the majority of our customers being based in the UK or US which is very similar to most product-based businesses I know. At the end of the call they asked me to email them our recent company accounts, and funding details, following which I received confirmation that everything had been received.
The second 'Annual Review'
Then, in March, I received a letter saying there was missing information in our review and we'd have to schedule another call. We had this conversation on 31 May, during which they asked all the same questions as were covered in the Jan call. I found this very strange as nothing seemed to be missing or wrong, and no questions seemed to suggest any problem on our account. At the end of the call I was again told they had everything they needed.
Failing the 'Annual Review'
Then, in early July, without any communication or notice, our business bank account was suspended by HSBC, completely blocking access to our money. We are a business that requires working capital to operate and the timing of this couldn't be worse. Our entire year has been leading up to a new product launch in time for the Christmas season, and by cutting off our funds, everything simply grinds to a halt. We're currently in default of all our supplier accounts, we have a container of inventory stuck in China, we can't move ahead with tooling the new product, we've missed our HMRC payment, we can't renew commercial insurance, we can't make payroll which has a knock-on effect on our personal lives, and payments for the array of online software and other regular monthly expenses have had to be paid through personal funds.
No communication, no explanation
Over the past 3 weeks I have spent around 16 hours on the phone and sent over 60 emails to everyone related to our account. Our account manager is unable to help, the SW Area Manager has been utterly useless, and the KYC, complaints and commercial teams have done nothing other than continually ask the same set of questions over and over again. Nobody has given me any indication at all of what the problem is or how to resolve it. I've opened a new account with another bank but until I have access to our funds, I can't transfer the account. I've sent 2 copies of a printed pack of documentation detailing all large transactions in our business over the last 3 years and how they correlate to shareholders, customers and suppliers, and provided a history of our business, our accounts, and future projections, to both their KYC and complaints teams.
We've opened a complaint with the Financial Ombudsman to help us resolve the problem, but in the week that has passed since opening the case, we've had no feedback with regards to what the problem is or how long it will take to resolve.
A fundamentally flawed policy
Our next step is to involve our solicitors. While I am in no doubt that withholding our funds without communication is a breach of the banking code of conduct to treat customers fairly, the cost and time of going to court is something I'm sure most small businesses would prefer to avoid. Ultimately, this is a fundamental breakdown in their remediation and review policies, and I just cannot believe it can be legal to cause this much disruption without notice or explanation.
As of this evening, I have personally emailed every one of the HSBC senior commercial management team members listed below, in the hope that someone has the decency to take responsibility for their organisation and is willing to take a few minutes to escalate the problem and help us (names, titles and contact details below for anyone with a similar problem). I challenge anyone at HSBC to provide a legitimate reason for suspending our account. If there is anything I haven't complied with it is because I haven't been asked to, and if nobody is willing to discuss the problem or do anything to help, how do you expect me to resolve it?
- Amanda Murphy - UK Head of Commercial Banking (email@example.com)
- Ian Tandy - Head of Corporate Banking (Ian.Tandy@hsbc.com)
- David Rowe-Francis - Head of Anti-Money-Laundering (David.Rowe-Francis@hsbc.com)
- Caroline Kennedy - Head of Anti-Money-Laundering Operations (Caroline.Kennedy@hsbc.com)
- Ashley Driver - UK Co-Head of Business Telephone Banking (firstname.lastname@example.org)
- Alex Heathcote - Deputy Head of Business Banking Direct (email@example.com)
- Dawn Masters - Head of Direct Business Banking (firstname.lastname@example.org)
- Chris Chambers - Area Director Business Banking (email@example.com)
- Jane Galvin - Head of Corporate Banking (firstname.lastname@example.org)
- Laura Murray - Head of Corporate Banking (email@example.com)
- Neil Treadaway - Relationship Director (NeilTreadaway@hsbc.com)
- Sha Amran - Relationship Director Corporate Banking (ShaAmran@hsbc.com)
- Rona Cole - Relationship Director (Rona.Cole@hsbc.com)
- Richard Johnson - Head of Business Review (Richard.Johnson@hsbc.com)
- Gemma Harrison - Head of Customer Experience (GemmaHarrison@hsbc.com)
- Iain Hadcroft - Head of Centre, Customer Due Diligence (IainHadcroft@hsbc.com)
- Richard Bearman - UK Director Small Businesses (RichardBearman@hsbc.com)
- Jennifer Crawley - UK Deputy Director for Small Businesses (JenniferCrawley@hsbc.com)
- Danielle Hopper - Customer Experience Manager (Danielle.Hopper@hsbc.com)
- Alastair MacDonald - Centre Head of Customer Due Diligence (Alastair.MacDonald@hsbc.com)
- Debbie Kuczara - Deputy Head of Direct Relationship Management (DebbieKuczara@hsbc.com)
Startups, tread carefully
In the meantime, if you're a UK startup or small business, think carefully about whether HSBC is a risk you can afford to take. Having read a number of similar HSBC stories online (such as here, here, here and here), our relationship with them will be over the minute I have access to transfer our account.
HSBC, if you could be bothered to read this, please send us our money and we'll happily bank elsewhere.
Update // 3 August // The power of social media
A lot happened in the 12 hours or so since publishing this post. Besides posting it to the HSBC Facebook and Twitter page, it caught on within the London Startups community, receiving over 2,500 views by 3pm this afternoon, and I've received support from over 60 people in other UK startups.
Two of the senior management team responded to my emails and I received a call from HSBC this morning offering to close my account and transfer our funds to our new bank. This was done by lunchtime and our funds have been transferred to Santander with whom we hope to have a more pleasant relationship.
The interesting part is that the only resolution I could achieve was to close the account and move our funds elsewhere. It's a good result in that our business can finally get back to normal, but how can a bank the size of HSBC not have the ability to resolve these problems in a more satisfactory manner. When your internal system flags a customer such as Loogun as a potential money-laundering risk, and this is all we can deduce given the action taken against us and lack of transparency on their part, then your policy and remediation process has clearly fundamentally broken down, and someone needs to address it beyond simply shutting down accounts of legitimate business customers.
I am committed to following our complaint through with the Financial Ombudsman who will eventually get to the bottom of why this process failed, and we should find out what it was that triggered this mess in the first place that nobody could help resolve over the last 3 weeks.
Advice for other startups
If you find yourself in a similar situation and your account has been suspended, don't wait, the situation will not resolve itself. You will be told that an authorisation team will shortly remove the inhibit, but after 3 weeks ours was still no closer to being resolved.
Pick up the phone and talk to the Financial Ombudsman who will create a case that the bank has to address. This process isn't quick so if you need your funds to operate, open a second account asap and get your account closed down and transferred. This is about the only way to get the bank to give you access to your funds as it removes their 'risk'. The irony being that if they can transfer your funds then you obviously weren't under any significant level of investigation in the first place.