My Bank Closed My Checking Account Without Telling Me

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.^[1] “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.^[2] Brett King blogged about having his account closed – which was reopened only after he wrote about it on The Huffington Post.

Managing problems with online banks

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 it happened, 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 to 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 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.

I finally beat the bank that took all my money!

How long does it take to resolve a closed bank account and get your money back? Five months, if you bank with HSBC.

Along the way, I’ve learned a lot about customer service and online-only bank accounts, businesses, and branches of government that protect consumers – and how far up the chain you need to go to get results.

Here’s how I finally won…

Step 1: Aim high up the ladder

In my experience, businesses are usually willing to resolve a customer’s complaint or issue if you keep escalating it until you reach a supervisor or manager willing to help you.

Unfortunately, of the 27 times I called HSBC’s customer service online, I spoke to three supervisors – none who were willing or able to help beyond reading a script and hanging up when I started asking questions.

Finally, I located an email address for HSBC’s press and communications department. I emailed the department to let them know that I had uncovered several customers with similar issues, and I was having an issue myself.

In response, I was asked:

You raise some serious issues and I wonder if you could provide the names and addresses of the HSBC customers you’ve been in contact with so that we can investigate and respond appropriately.

When I refused, I received a second response:

HSBC is committed to serving the needs of commercial customers consistent with our global strategy. In the U.S. as elsewhere, that means focusing on clients who conduct cross-border business or who intend to do so in the near future.

As is standard practice across the banking industry, HSBC does reserve the right to exit banking relationships according to the “Rules for Deposit Accounts” which form part of the account opening process.     

For privacy reasons, we do not comment on individual customer matters.

Unfortunately, communication ended there, and I wasn’t able to get an answer for myself or anyone else with a similar problem. But I wasn’t at a loss.

Step 2: The Better Business Bureau

My next step was to contact the BBB. While the BBB only acts as the middleman, you can file a complaint online, and it’s a good place to start. Filing a complaint was quick and painless, but getting a response was not. It wasn’t the BBB’s fault, it was HSBC’s.

This is how the complaint process went:

• March 11: Filed a complaint online.
• March 12: Received confirmation of my complaint.
• March 13: Received a letter in the mail from an HSBC customer relations officer, who wrote, “Once we have completed a thorough review of the issues raised, we will respond to you immediately. If a resolution is not forthcoming within 10 business days, we will update you accordingly.”
• March 19: HSBC notified the BBB they would look into my complaint within 30 business days.
• April 10: The BBB followed up to see if HSBC had responded to me personally. I hadn’t received anything else from the bank.
• April 11: The BBB closed my complaint, stating, “Your BBB has tried to present your complaint to HSBC Bank USA, N.A. in an attempt to resolve this matter to your mutual satisfaction.  Unfortunately, despite our efforts, we have received no response to your complaint. We attempted to contact HSBC Bank USA, N.A. through written correspondence twice on your behalf, but we must now close this matter in our files. This does not minimize the importance of your concerns, nor is it any reflection on the validity of your dispute.”

In the end, I filed two complaints with the BBB – one with my local office and one with the office where HSBC is located. The BBB wasn’t able to resolve my issue, but it was a start.

Step 3: The Consumer Financial Protection Bureau

For banking matters, you can file a claim with the Federal Reserve. Claims are investigated by the Consumer Financial Protection Bureau. You can file free online.

In my experience, the CFPB was helpful, but in a roundabout way. When I filed my claim, I received an immediate response confirming the submission. The next day, I received a response from the CFPB with a claim number and this statement:

We received your submission from the Federal Reserve and will review it as soon as possible to determine if it involves a Federal consumer financial law within our authority.

Depending on what we find, we will:

• Send your complaint to the company for a response; or
• Send your complaint to the appropriate regulator or help you get in touch with your state and local consumer protection office if your complaint is not within our authority; or
• Let you know if we need more information to continue our work.

I didn’t hear from the CFPB again while I was resolving my banking nightmare, but I still say it’s a step worth doing. If nothing else, it showed the bank I was serious.

Step 4: Dealing with the company

Finally, I received a second letter from HSBC. It said the bank would look into my claim and follow up within 30 days. This letter also had a phone number on it.

I called for three days without a response. On the third day, I left a message and immediately got a callback. Margaret, the customer relations officer working my claim, told me she hadn’t been able to determine why my account was shut down in the first place. It looked like some sort of clerical error. She apologized profusely and agreed to overnight me a check for the full balance.

The check arrived the next morning.

After five months of work, I finally had my money back and an apology from the bank. I deposited the check and won’t be looking back, but I did learn a few things.

For one, I shouldn’t have waited so long to seek help.

For another, while the BBB and the CFPB weren’t able to help me directly, they got the attention of HSBC, which led to a resolution.

So if this ever happens to you, know that you can also beat the bank. Act quickly and use the free tools at your disposal to get a resolution. File complaints and keep at it. Someday soon, an extremely frazzled employee will call you with a big apology.