Weeks after reports surfaced that some small business accounts at HSBC had been frozen, a result of the FI revamping anti-money laundering (AML) crackdowns, HSBC has said it is compensating some of the businesses affected.
Published by Reuters on Thursday (Sept. 7), reports noted HSBC has offered to pay some of the U.K. small businesses, according to unnamed sources. The same sources told reporters there have been hundreds of small- and medium-sized businesses (SMBs) affected by the issue.
The alleged payouts follow outcries by the SMB community. One small business owner, Richard Davey, recounted his challenge with HSBC to get his bank account un-frozen in a statement published on Medium. Davey said his a video game development firm was about to lose water, internet and phone services because of the mishap, and one of its employees quit because he couldn’t make payroll.
Amanda Murphy, head of commercial banking for HSBC U.K., told Reuters the bank has indeed offered payouts to affected small businesses, but did not reveal how much compensation the FI was offering.
“If HSBC has disadvantaged a customer in any way, we’ll always seek to make it right,” Murphy said.
Sources told the publication two of the 15 small businesses which saw their accounts unfrozen have received offers for compensation from the FI. According to Reuters, reports noted business advocacy groups and lawmakers are now addressing the issue.
Freezing SMB bank accounts is a result of HSBC’s efforts to tighten AML efforts after being hit with a $1.9 billion fine in 2012. In the wake of that fine, HSBC began to survey its small business customers, with reports noting the account freezes were a result of responses to questionnaires sent in 2015.
“Inhibiting an account is always a last resort, so to get to that stage we will have done everything we can to contact the customer and get the information we need,” Murphy told the publication last month.