I am treasurer of a smallish charity, Akamba Aid Fund, which has supported impoverished communities in Kenya for the last 21 years. We’ve built wells, dams, health clinics and schools and fund health insurance for 100 families. We now face closure because HSBC has suddenly terminated our bank account. Problems started in 2020 when we were told there would need to be a safeguarding review. I spent the ensuing months providing the information required. Then I received a pro forma letter stating our account would be closed unless I provided further information.
This happened several times. I was then informed that a technical error had delayed the review and £200 was paid to our account for the inconvenience. Eventually, last December, I received a letter confirming that the review had been concluded, but within two weeks another arrived requesting a meeting for a safeguarding review. I demanded to know what was still outstanding. The bank’s response was to close our account and issue us with a cheque for our balance. Since then all applications for an account with other banks have been declined.
It would appear our connection with Kenya is the deciding factor. We’re therefore unable to cash the cheque and have had to cancel payments from sponsors. The trustees are having to pay bills out of their own money and the situation is desperate.
RL, Yeovil, Somerset
You are the second small charity with projects in Africa in two months to contact me after losing your banking facilities. In September I reported on an organisation that supports underprivileged medical students in Zimbabwe. It, too, lost its bank account when Lloyds claimed it had ignored several requests for information. As a result, people and projects in impoverished communities were left in limbo.
Anti-money laundering rules require banks to log exhaustive details about business customers, and risk punitive fines if they fail to detect criminal conduct. However, it seems automated systems and human staff often work in ignorance of each other.
HSBC says that your account was closed because you did not submit to a second safeguarding review. This is odd. The review in question was announced in a letter two weeks after you’d received confirmation your review had been concluded. Understandably, you assumed this was an error and say your repeated attempts to find out what new information was required merely triggered more generic letters.
HSBC now tells me it will reopen your account – provided you agree to a safeguarding review! Since it’s been 12 months since your last one, that’s fair enough, although it may restart the merry-go-round. HSBC admitted your experience could have been more seamless. “We conduct regular ‘know your customer’ reviews as part of our efforts to prevent financial crime,” it says. “We allow several months to ensure customers have time to respond.”
Charities or individuals who believe they have been treated unfairly by banks can appeal to the Financial Ombudsman Service which can enforce redress .
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