HSBC UK Bank Plc · DRN-6255604

The complaint Mr M is complaining that HSBC UK Bank Plc (“HSBC”) made a mistake in transferring his Stocks & Shares ISA to a Fixed Rate ISA and he now seeks compensation for claimed financial loss What happened In early 2025, Mr M received a notification from HSBC that he was no longer eligible for HSBC’s Premier Account status and that this status would end on 9 April 2025. Following this, Mr M decided to transfer his holdings in his HSBC Stocks & Shares ISA to a Fixed Rate ISA. At the time his entire holdings in the Stock & Shares ISA were in HSBC’s World Selection Conservative Portfolio C. Mr M says he went to a HSBC branch on 1 April 2025 (Mr M contends this date following my below mentioned provisional decision) to attend an appointment to close the stocks & shares ISA which would involve selling off the holdings and transferring the resulting funds to a Fixed Rate ISA account (HSBC contended the meeting took place on 2 April 2025 but subsequent to my provisional decision has said they also think it took place on 1 April 2025 date). Unfortunately, at this appointment the transfer was initiated incorrectly, apparently due to a “subscription” Fixed Rate ISA being chosen instead of “transfer-in” Fixed Rate ISA. Mr M was assisted by HSBC personnel whilst in branch, and it is accepted by both Mr M and HSBC that the process was not completed correctly. HSBC contacted Mr M to inform him about this and arranged for a follow up branch appointment for 7 April 2025 in order to properly carry out the transfer. Mr M attended the appointment on 7 April 2025, and completed a stocks & shares ISA transfer form, which correctly initiated the transfer process. As part of the transfer, £500 was transferred to the Fixed Rate ISA on 7 April 2025 (i.e. on the day of the transfer). In addition, Mr M’s holdings in the Stocks & Shares ISA still needed to be sold on the market and the resulting funds transferred to the Fixed Rate ISA. The sale of Mr M’s holdings was executed on 11 April 2025 for £29,060.36. The transfer to the Fixed Rate ISA was formally completed on 30 April 2025 (according to HSBC’s Case Print notes). Mr M was unhappy with how the process went and raised a complaint with HSBC. This centred on the initial errant attempt at transferring the Stocks & Shares ISA to the Fixed Rate ISA which had made a subsequent appointment necessary to correct things and in the meantime the value of Mr M’s holdings had gone down potentially causing Mr M financial loss. Mr M was also unhappy about not being told about how long the transfer process would take. Additionally, Mr M was unhappy that he had to call HSBC to ensure the transfer process was progressing properly. HSBC responded in its final response letter as follows:

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• It said it could not determine how the initial error on 2 April 2025 occurred in circumstances where Mr M was being assisted by HSBC personnel with the process, but it accepted he had been inconvenienced by it. • It accepted that Mr M was not told timescales on his initial visit, but said it did inform him of a potential 70-day timescale on the second visit and Mr M had decided nevertheless to proceed with the transfer. It also mentioned that it provided an execution only service and did not provide advice. • It rejected that Mr M had suffered any financial loss, stating that the same decline in market rate would have occurred regardless of the delay and also stating that Mr M had the option to stop the process after the first errant attempt but decided to proceed. • It ultimately concluded Mr M was entitled to £100 compensation for the distress and inconvenience caused. Mr M rejected HSBC’s decision and brought a complaint to this Service. In his complaint, Mr M complained about the financial loss of £1,452 caused by the delay in initiating the transfer correctly, the additional trip he had to make to HSBC to correctly initiate the transfer and that he had not been informed of timescales and the ability to cancel the transfer. Our Investigator upheld Mr M’s complaint, holding that HSBC was responsible for the delay of 5 days from 2 April to 7 April 2025 (relying on HSBC’s initial position that the first meeting took place on 2 April 2025) and that HSBC must put him in the position he would have been in had the delay not occurred. • In essence, this meant putting the actual timeline of the sale and transfer back 5 days and compensating Mr M for any loss in value of the shares caused by the delay and for any loss interest from the delayed transfer to the Fixed Rate ISA. • This meant looking at whether there was any loss caused by the shares being sold on 11 April 2025 as opposed to 6 April 2025 and if there was any loss, compensating for this difference. • In addition, assuming there was a loss, Mr M should also receive any lost interest he would have been entitled to from 23 April 2025. • Further, Mr M should be entitled to reimbursement for any costs occasioned by the second trip to HSBC on 7 April 2025 (subject to Mr M providing evidence of this). Mr M rejected the Investigator’s View, arguing that financial loss should be assessed on the basis that his holdings were sold on the date of the initial meeting. Mr M also complained that the Investigator had not taken into account that he had not been told the timescale of the transfer process and had not been advised of the option to cancel the transfer and wait for the “market to recover” and that in hindsight had he been informed of this they would have cancelled the transfer and waited for the market to recover. As Mr M rejected the Investigator’s view, the complaint was referred to me for an Ombudsman’s decision. I issued my provisional decision on 5 March 2026. I’ve included an extract from it below. (This assumed the initial meeting took place on 2 April 2025, and was issued before both parties agreed it actually took place on 1 April 2025.) “Having considered the evidence, I believe that Mr M should be entitled to compensation for financial loss occasioned by adverse price movements during the 5-day delay. It seems clear that HSBC did fall short in assisting Mr M to make the correct transfer on 2 April 2025, and whilst HSBC did notify Mr M of the error, this nevertheless meant Mr M had to make a second appointment with HSBC on 7 April 2025 to correctly initiate the transfer. The holdings were sold on 11 April 2025, however, but for the delay, they likely would have been sold on 6 April 2025 and the comparison between the price of the holdings on 6 April 2025 and 11 April 2025 should be used to determine if financial loss occurred here.

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I note that Mr M has claimed that financial loss from the delayed sell down should be based on the assumption that the holdings should have been sold on the market on 2 April 2025, i.e. the date of the first attempt to effect the transfer. However, I do not agree. In practice, such transfers including any connected sell downs, are almost never done immediately and often do take time to be effected (usually weeks). In this case, it took HSBC 4 days from 7 April 2025 to effect the sell down of the holdings and I think this fits within a reasonable timeframe – and I note that Mr M has not specifically complained that there was any undue delay in the sell down after the transfer was properly initiated on 7 April 2025. As such, I think it reasonable, when assessing what would have happened but for the delay, to assume the holdings would have been sold in the same timeframe of 4 days but from 2 April 2025, which means the correct date for comparison is 6 April 2025 (and not 2 April 2025). I now turn to whether Mr M is entitled to compensation for lost interest. Given the 5-day delay in early April, it is reasonable to assume that formal completion of the transfer would have taken place on 25 April 2025 given the actual formal completion occurred on 30 April 2025. In theory Mr M may have missed out on 5 days of interest that he would have received had the transfer been completed 5 days earlier. I note that according to HSBC’s letter dated 21 October 2025, the actual transfer of the sell down funds to the Fixed Rate ISA occurred in Mr M’s case on 25 April 2025 (even though formal completion did not take place until 30 April 2025) and that interest was backdated from 17 April 2025 (i.e. the date those funds were placed in a suspense account). But for the delay, it is likely interest would have begun accruing 5 days earlier – i.e. from 12 April 2025. And so Mr M has missed out on interest over those 5 days because of the delay. Additionally, if the sell down price of the holdings would have been higher had they been sold on 6 April 2025, then Mr M would also be entitled to compensation for lost interest on the higher base amount that would have been accruing higher interest from 12 April 2025 to now. Having said that, I think it is necessary to award compensation based on the overall net effect on Mr M’s current position (assuming he still has the holdings in the Fixed Rate ISA). • If Mr M’s current position is better because of the delay then he would not be entitled to compensation based on direct financial loss. This would be the case if he actually gained from the delayed sell down, as the price would have been lower had the sale occurred on 6 April. If this gain, combined with the resultant higher interest payments he accrued because of the higher base amount, exceeds the 5 days of missed interest, then he would not be entitled to compensation for financial loss as overall he benefitted from the delay. • Alternatively, if Mr M’s current position is worse off because of the delay then he obviously would be entitled to compensation for the financial loss caused. For example, this would be the case where the sell down price of the holdings would have been higher had the holdings been sold on 6 April 2025 (meaning he suffered a loss on the delayed sell down), which would mean he also suffered additional loss from lower interest payments (on the unfairly lower base amount) in addition to the 5 days of missed interest payment. Either way, this would be fair and reasonable as it would reflect the overall monetary effect of the delay in terms of whether and the extent to which there has been financial loss flowing directly from the transfer delay. As mentioned, Mr M has also complained that the Investigator did not address Mr M’s position that he was not (a) informed initially that the transfer could take up to 70 days to complete and (b) advised of the ability to cancel the transfer and to wait out the market, and that if he had been advised of this, he would have cancelled the transfer to wait the market out. I don’t find these points persuasive and I’ll explain why.

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With respect to HSBC advising Mr M to cancel the transfer and wait out the market, as HSBC mention in their final response letter, as this was an execution-only service, HSBC was not under any duty or obligation to provide investment advice to Mr M. Therefore, to the extent that is Mr M’s contention, it is unfortunately misconceived. In relation to not being told about the right to cancel, I think it should have been clear to Mr M that he had the option to not proceed with the transfer if he so wished. In particular, Mr M had to start the transfer process again on 7 April 2025 (with the erroneous Fixed Rate ISA cancelled and with none of his holdings having been sold) and had to complete a fresh transfer form. At this point I think it ought to have been reasonably clear to Mr M that he could simply decide not to proceed with the transfer. He nevertheless chose to proceed with it. I also note that there is no evidence that HSBC said anything to mislead Mr M in any way on this matter. Similarly, with respect to timeframes for the transfer, as HSBC has pointed out, Mr M was informed of the potential 70-day timeframe during the 7 April 2025 meeting and Mr M did nevertheless proceed with the transfer. Moreover, when HSBC asked Mr M’s wife, Mrs M - who had herself lodged a near identical complaint with HSBC for the same 5 day delay regarding the transfer of her Stock & Shares ISA (and who had attended the same HSBC branch meetings as Mr M) - in online correspondence dated 8 May 2025 whether knowing of the timescale from the outset would have changed Mr and Mrs M’s decision to proceed with the transfer, she did not say they would have cancelled the transfer (but rather that both she and Mr M would have considered matters and made enquiries). Overall, I think the evidence suggests it is more likely than not that Mr M would have proceeded with the transfer even if he knew of the timescales from the outset. Thus, in the circumstances, I don’t think Mr M’s arguments about the right to cancel or the 70-day timeframe are material to the determination of the loss for which he claims and I do not think they provide a valid basis for compensation. I agree with HSBC that Mr M has suffered distress and inconvenience because of the delay. I also think that it could have been clearer about timeframes from the outset (although, as I say, I don’t think the latter occasioned financial loss). I therefore think that in addition to the £100 Mr M has already received, an additional £40 should also be given to Mr M for the distress and inconvenience he has suffered (and the costs of the second trip to the HSBC branch). Putting things right Consistent with the above, I’m minded to conclude HSBC should assess whether overall Mr M has suffered financial loss by considering (a) whether he gained or suffered loss from the delayed sale of the holdings (comparing the sell down price on 11 April 2025 with what it would have been on 6 April 2025) (b) the loss of 5 days of interest due to the delayed completion of transfer, and (c) any lost interest from 12 April 2025 to the date of settlement in the event Mr M suffered loss from the delayed sale of the holdings. If Mr M has suffered financial loss, HSBC should compensate him for it in full. Additionally, HSBC should pay Mr M an additional £40 as compensation for the distress and inconvenience he has suffered.” What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint.

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HSBC has accepted the provisional decision. Mr M has responded saying he believes the initial meeting with HSBC was on 1 April 2025. I have reviewed the file and can see that the initial transfer application form is indeed dated 1 April 2025. Further, the form states it was received by HSBC on 1 April 2025. HSBC has now said it accepts the meeting took place on 1 April 2025. Therefore, I have written to the parties to confirm that in light of this I will therefore be using 1 April 2025 as the initial meeting date and 7 April 2025 as the follow-up meeting date. HSBC should amend its loss calculation to reflect this date change. In particular, the delay should be considered 6 days (instead of 5 days). Further, (i) the sell down would have taken place on 5 April 2025, so that is the comparator price date, (ii) Mr M has lost 6 days of interest, and (iii) to the extent Mr M has lost out due to the sell down price being higher on 5 April 2025, the higher interest he missed out on should be calculated from 6 days prior to when it began accruing to the settlement date. If HSBC requires any further clarification regarding this amendment, it is welcome to contact us. Mr M has also reiterated that had he been told about the potential timeframe of the transfer he “would have had second thoughts about moving the money”. However, as I have mentioned in my provisional decision, to have any impact on compensation I would need to be satisfied that Mr M would likely not have proceeded with the transfer had he received the information about the potential timeframe at the outset. Unfortunately, the evidence does not support this as (i) in the second meeting on 7 April 2025 when Mr M was informed of the potential timeframe, he nevertheless decided to proceed with the transfer, and (ii) when he and his wife were asked by HSBC whether they would have proceeded with the transfer if they had known the timeframes from the outset, they did not positively confirm that they would not have proceeded but rather stated, as he does now, that they would have had second thoughts. This evidence suggests that on the balance of probabilities Mr M would have proceeded with the transfer even if he had been told of the potential timeframe from the beginning. So having reconsidered everything provided – including the evidence regarding the correction that the initial meeting occurred on 1 April 2025, I’m upholding the complaint in line with my provisional findings (which both parties have accepted), as amended, which now form part of this final decision. Putting things right Considering the 6-day delay it caused, HSBC UK Bank Plc should pay Mrs M compensation as I have described above. Specifically, it should assess whether overall Mr M has suffered financial loss by considering (a) whether he gained or suffered loss from the delayed sale of the holdings (comparing the sell down price on 11 April 2025 with what it would have been on 5 April 2025) (b) the loss of 6 days of interest due to the delayed completion of transfer, and (c) any lost interest from 11 April 2025 to the date of settlement in the event Mr M suffered loss from the delayed sale of the holdings. If Mr M has suffered financial loss, HSBC UK Bank Plc should compensate him for it in full. Additionally, HSBC UK Bank Plc should pay Mr M an additional £40 as compensation for the distress and inconvenience he has suffered. My final decision My final decision is that I uphold this complaint and direct HSBC UK Bank Plc to put things

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right as I have set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr M to accept or reject my decision before 24 April 2026. Zaib Malik Ombudsman

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