CRANE ON THE CASE: My vulnerable in-laws got ‘debanked’ by HSBC

My elderly parents in-law had their joint bank account closed by HSBC in December. We don’t really understand why but HSBC said it was because of ‘safeguarding issues’.

It sent them a cheque with the balance – around £35,000 – but they have no other account to pay it into. Before they told my husband and I in January, they had been living on food they had in the freezer and a small amount of cash borrowed from another relative.

I would describe them as being sheltered and vulnerable. They live in a remote part of the country and have no access to the internet. Between them they have various physical and mental health issues.

Without a bank account they can’t access their pensions. They also have no vehicle as they are unable to tax, insure or MOT their car. We are helping them pay for food and bills, but won’t be able to afford to much longer.

‘De-banked’: Our reader’s ‘vulnerable’ parents in-law had their HSBC current account closed – leaving them without access to money as they struggled to open a new one (stock image)

My mother-in-law has been into her nearest branch – still miles away from her home – eight times to try and sort it out. Most times she was told to go online or make a call. But when she made a phone call with my help, we were told to go to the branch.

My father-in-law struggles to walk so it is hard for him to go with her. Sometimes they say a signature from him will be enough to open the account, but other times not.

My mother in-law had no ID, so I also had to get her a provisional driving licence. HSBC is one of the few banks that will accept this, so we can’t simply go elsewhere.

They eventually did manage to apply for a ‘basic’ bank account in April, but this was declined due to a credit card issue. My parents in-law say they don’t have a credit card, but again could be confused.

Essentially, HSBC is saying that they were given warning about the account closure and should have addressed it earlier. 

I know my they may not have done what was required, but do you think you could get HSBC to reconsider? We are running out of options. Anon, North Wales

Helen Crane of This is Money replies: ‘Debanking’ – when a financial institution closes someone’s bank account against their will – is all over the news at the moment due to Nigel Farage’s complaint against Natwest-owned Coutts.

That story revolves around an exclusive private bank where customers must have serious sums of money at their disposal.

Your parents in law’s story, which I was saddened to hear, shows that being ‘debanked’ can have much graver consequences for those at the other end of the income scale.

It is almost impossible to live your life without a bank. 

They lost their sole current account, which they had held for many years and relied upon for all of their income and outgoings. 

This included paying in both their pensions, meaning they were left with a cheque for £35,000, but no money at all that they could actually access.

We don’t know why HSBC closed the account. 

But short of your parents in-law committing a massive fraud, which doesn’t seem feasible, I think the bank had a moral obligation to help them find a suitable alternative.

You told me you made it clear to HSBC they couldn’t afford life’s basic essentials without the money on that cheque.

The bank should have immediately flagged them as being extremely vulnerable, and quickly set them up with a basic account. 

Basic accounts are current accounts with no overdraft facility, often used by people who have bad credit or might not qualify for a standard account for another reason.

If your mother and father in-law didn’t have your help, I dread to think what might have happened to them in the seven months they have been unable to access their cash.

It appears your parents in-law may have been given some warning that this was going to happen – but given their age and vulnerability, the message might have been missed or not fully understood.

But even if they did get a heads-up, they may not have been able to do much about it – as the bank’s decision is usually final.

Their case highlights another big problem with today’s banking system, which is that it increasingly excludes older people.

Having never travelled abroad or driven a car, your mother-in-law did not have any valid identification to open a new account.

Driven around the bend: Our reader was forced to get a provisional licence for her elderly mother, so that she could open a basic bank account 

You were forced to go through the ridiculous rigmarole of getting her a learner driver’s licence. It is not the first time I have heard of a bank doing this, and I would urge a bit of common sense here. Surely there is something else that would suffice?

I imagine the account opening process would also have been much easier if she had an internet connection.

I spoke to HSBC to explain my concerns and ask if it could open a new account for them as a priority. 

It put you in touch with someone from its specialist ‘financial inclusion’ team who helped to explain exactly what they needed to do. 

There was still some back and forth, especially at the branch where you told me your mother in law was told to bring in one kind of proof of ID, only to be told when she returned that it wasn’t acceptable and she needed to bring something different. 

Eventually HSBC recommended that your mother-in-law signed up for an account in just her name for now, as this would be quicker. 

She applied for a basic bank account and it was approved, but unfortunately this did still take some time. 

You said it took a long time to get forms and the debit card posted out, and that branch staff didn’t always email when they said they would. 

In fact, it took so long that the cheque nearly expired.  

I first made contact in early May, and the account was opened and the £35,000 cheque cleared into it by mid-July. 

There is also more than £6,000 of backdated pension money that will now be paid into the account. 

An HSBC spokesman said: ‘Our focus is on helping people build financial health, including those in vulnerable circumstances. 

‘We’re glad that we were able to help [these customers] access the banking services they need.’

I am pleased that your mother and father-in law once again have access to the vital service that is a bank account – but it really shouldn’t have taken seven months to get there. 

And why the account was closed remains a mystery – as is often the way in reader cases where accounts are shut, getting an answer is almost impossible.  

This post first appeared on Dailymail.co.uk