HSBC UK Bank Plc · DRN-2889543

The complaint A company, which I’ll refer to as T, complains about how HSBC UK Bank Plc handled its application for a Bounce Back Loan. T’s director, Mr T, brings the complaint on its behalf. What happened In March 2020, T applied for a Coronavirus Business Interruption Loan (CBIL) – but it didn’t receive any update on the application for some time. Around seven weeks later, in May, the Bounce Back Loan Scheme was introduced. As a result of the new Scheme, HSBC said a CBIL was no longer appropriate for T. So, it now had to apply for a Bounce Back Loan – which it did on 4 May. The funds were drawn down shortly after, on 14 May. Mr T was unhappy with how HSBC had handled T’s requests for borrowing, so he complained. He said, as a result of HSBC’s delays, T had been obliged to borrow money from elsewhere at a high interest rate - costing T around £900, which Mr T wanted HSBC to cover. HSBC apologised for the delay. It said it had received unprecedented demand, which meant applications had taken longer than expected. The bank also paid T £150 compensation for the inconvenience. Mr T remained unhappy, as he thought delays on HSBC’s part were the reason T had to borrow at a high interest rate. So he referred the complaint to our service and it was considered by one of our investigators. The investigator agreed that T’s application had taken longer than it was entitled to expect. But HSBC had offered T a further £150 compensation since the complaint had been referred to our service, making a total of £300 – and he thought this was a fair way to put things right. He didn’t think HSBC should pay the cost T said it incurred because of high-interest borrowing, because it hadn’t been sufficiently evidenced. So, he didn’t ask HSBC to take any further action. Mr T disagreed with the investigator. He reiterated that, if HSBC had been more efficient, T wouldn’t have incurred costs by having to borrow from elsewhere at such a high interest rate. Further, Mr T didn’t think T had been compensated for the bank’s broken promises – or the stress and anxiety its actions had caused. As an agreement couldn’t be reached, the case has been passed to me to decide. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and

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reasonable in the circumstances of this complaint. Having done so, I agree with the conclusions reached by our investigator – and for broadly the same reasons. I’ll explain why. HSBC has accepted that – on occasion – things took longer than expected with T’s applications. And, from what I’ve seen, I’d agree that T was subject to some delays. Much was around arranging a CBIL initially, and I’m also aware there were some complications when T tried to apply online for a Bounce Back Loan. While I acknowledge the bank would’ve faced its own operational challenges, I think it’s fair to say T’s application took longer than expected. As a result of the delays, Mr T holds HSBC responsible for his business having to borrow on credit cards and take out a loan from a third-party provider – at a high interest rate – to cover its commitments. And he’s set out that, if HSBC had acted more efficiently, T wouldn’t have had to take such steps. One of the primary commitments was for an update and redesign of T’s website. Mr T has said he had to postpone the urgent changes because of HSBC’s delays. And he’s provided evidence of a discussion with a web developer who would carry out the work – which includes confirmation on 27 May that an interim payment would be made soon. T’s Bounce Back Loan was drawn down on 14 May. So, at the time of Mr T’s discussion with the web developer, it had access to those funds and could’ve used them to cover the cost. I’ve not seen anything to show T had to pay for the website using credit cards or the high- interest loan it says it obtained, or that it incurred an avoidable cost by not making payment any earlier. So, with that in mind, I’m not persuaded HSBC’s delays led to any unnecessary costs regarding T’s website. Mr T has also said his business still had to meet its commitments to suppliers – alongside its general running costs. Our investigator asked Mr T to evidence the costs T incurred at the time, showing that it had no option but to pay for them with the high-interest borrowing. But, from what I’ve seen, he hasn’t done so. It follows that I can’t safely conclude T did use other funds to meet its commitments or – if it did – at what cost. And nor can I be certain that any costs were incurred as a result of an unreasonable delay on HSBC’s part. I’ve no doubt the impact of the pandemic to Mr T and his business made for a very difficult and challenging time. And I don’t intend to give the impression that I think otherwise. But based on what I have, without supporting evidence, I can’t fairly agree that the bank should be liable for the costs T says it incurred. As I’ve set out above, HSBC has acknowledged T suffered some delay. It’s now offered a total of £300 compensation to reflect the inconvenience caused and, in the circumstances, I agree that’s fair. T clearly had to do more than should’ve been necessary to chase things up, and that would’ve put it through some inconvenience at an already difficult time. So, I think it’s right that the bank has increased its offer – and I consider it to be a fair and reasonable way of resolving this complaint. My final decision

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HSBC UK Bank Plc has now made an offer that I think is fair in all the circumstances. So, my decision is that I uphold this complaint, and I require HSBC UK Bank Plc to settle the complaint as it has offered to do. Under the rules of the Financial Ombudsman Service, I’m required to ask T to accept or reject my decision before 20 July 2021. Simon Louth Ombudsman

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