After seven years, my bank suddenly closed my checking account and didn't return my money. Here's what I learned and you can, too.
Editor’s note: We asked the writer to let HSBC know she was writing about her experience. The company responded that it was committed to “clients who conduct cross-border business,” and that “for privacy reasons we do not comment on individual customer matters.”
My groceries were rung up and bagged. A line of people waited behind me. The cashier leaned over and whispered, “Ma’am, your card was declined. Do you have another card you could try?”
We’ve all been there. Most of the time, it’s just a simple security hiccup. You turn a little red at the cash register, walk out, call the bank, and they turn your card back on. I figured the story would end there. But it didn’t.
When I called HSBC, I found out my account – an online checking and savings I’d had for seven years – had been canceled with no warning.
Why? I still don’t really know. The offshore customer service center wasn’t helpful. They couldn’t tell me why they closed my checking account, or what I should do next. But after doing my own research, I got an idea of what happened – and found out I wasn’t alone.
“HSBC has been scaling back some operations in the U.S., including selling 195 retail branches in 2012,” The Wall Street Journal reported last September. “The bank also said in 2011 it was selling its U.S. credit-card business to Capital One Financial Corp. for $2.6 billion.”
So HSBC began closing U.S.-based business accounts. And in Canada, the Financial Post reported that HSBC was also closing Canadian business accounts. Brett King blogged about having his account closed — which was reopened only after he wrote about it on The Huffington Post.
I wasn’t as lucky as King. I’m still trying to sort out my banking nightmare. But along the way, I’ve learned a thing or two about managing problems with online banks. Here’s what you need to know if it ever happens to you…
1. Start with customer service
In my case, HSBC’s policy is not to give out information about account closures over the phone. After speaking to six different customer service reps and two supervisors across four departments, I was simply told a letter explaining why would arrive in the mail in 10 business days. They wouldn’t reopen the account, and I could not have access to my funds.
If you can, visit a branch and talk with someone in person. They may not be able to cut you a check right there, but you’ll get better information than talking to customer service over the phone. If you bank online, you’ll have to call customer service. Either way, keep a record of who you spoke to, what time you visited or called, and what was said. Trust me, it’ll come in handy.
2. Safeguard written documents
When I finally received a notice from HSBC 14 days after my phone call, it wasn’t what I had hoped. The letter simply said my account was reviewed as part of a routine evaluation of all accounts, and the bank had decided to close mine. Not exactly helpful, but keep any letters you receive from the bank.
3. Get your money back
After the letter I received didn’t include a check or any mention of one, I contacted customer service again. This time, I was told that a check for the final balance of all of my accounts would be mailed to the address on file within seven to 10 business days.
If you have funds in your account, get a customer service rep or personal banker to tell you how and when you’ll receive those funds. Make sure the bank has your current mailing address and phone number. Write down anything said and the time of the conversation.
4. Order your ChexSystems report
While I was waiting for my check to come, I applied for a checking account at a small local bank. When I explained how my old account was closed, I was told the bank would be hesitant to approve me without proof that my previous account wasn’t closed for fraud or an outstanding debt.
To make matters worse, some banks review customer ChexSystems records periodically, and if a negative entry appeared, I could have my account closed – putting me in the same mess all over again.
Never heard of ChexSystems? You may not realize it, but banks have been keeping a record of you. Similar to a credit report, ChexSystems monitors and records your banking history. Anything reported stays on your file for five years – and can seriously hurt your chances of getting another account.
I ordered my ChexSystems report online for free. There was nothing on it, which is actually good news. Order your copy and make sure your former bank hasn’t reported you incorrectly.
5. More money, more problems
Two more weeks went by, and I still hadn’t received a check. So I called customer service again. This time, I tried to step things up a notch and asked to speak to a supervisor. After some arguing with the customer service rep — they don’t like handing you over to their boss — I got a supervisor on the phone who promised to reissue the check.
Except it didn’t happen.
Another 14 days passed, and I still didn’t have a check for my rather sizable balance. Finally, having had enough, I started calling daily, asking to speak to supervisors and keeping a record of every conversation.
I think the professional term for this is “making a big stink,” and it’s what you obviously need to do. Every time a letter or check doesn’t arrive, call the first day it’s late, ask to speak to a supervisor, and demand a resolution. If you can’t get one, ask to speak to their supervisor.
6. File a complaint
By law, your former bank cannot hold your money or refuse to deal with you. If you aren’t receiving notifications, if you’re getting the runaround, or if you’re having trouble getting your funds returned, you can file a complaint with the Federal Reserve.
Complaints can be filed online and an investigation will be opened to handle disputes. According to the Federal Reserve, investigations take 30 to 60 days. The agency will also review your case and notify you if they can’t investigate and you should seek an attorney’s help instead.
As of now, I still haven’t received a check for my balance, and I’m still working on opening new accounts. But I’ve filed a complaint with the Federal Reserve. If my former bank isn’t interested in talking to me, maybe they’ll be interested in what the government has to say.