A bookshop was left stranded after HSBC closed its bank account for 12 days as part of a crackdown on financial crime.
Emma Corfield-Walters, who owns Book-ish with her partner Andrew Corfield-Walters in the market town of Crickhowell by the Brecon Beacons, told The Bookseller she was driven to “despair” by the situation which saw her racking up late fees and battling to keep suppliers on side when direct debits bounced.
Corfield-Walters said she completed an online form for HSBC in April as part of its monitoring of financial crime, but then her account was closed without her knowledge on 27th July. The bank was criticised last September for apparently suspending hundreds of small business accounts without prior notification as part of a crackdown on financial crime. Other businesses affected included food importers, marketing and design companies.
The situation has prompted The Booksellers Association to write to the bank asking it to ensure other booksellers are not affected by the action.
Corfield-Walters said: “Apparently it’s part of the safeguarding programme, they’ve clamped down on it. They said they sent letters but I haven’t received them.
“I didn’t have any confirmation that it had closed so the first I knew of it was suppliers calling me to tell me the direct debits hadn’t gone through. I went into the bank branch and asked why, and they told me it was about safeguarding, and after three hours said we couldn't get it back, I'd have to open another bank account.” The situation left her three-floor bookshop and café in dire straits as dozens of suppliers contacted her to ask why the money was failing to transfer.
Initially the former chemist was told she would have to wait until 10th August, but then a cancellation arose meaning she could open it on Monday (6th August) and was then told there would be 10 days until it was activated. Shortly after The Bookseller lodged the press inquiry with the HSBC media team on Wednesday (8th August), a customer care representative contacted her to say her original bank account had been reinstated.
“I have had to spend so much time on the phone to suppliers as you can imagine, explaining what has been going on. It definitely impacted on me financially, I incurred late fees. I’ve also had to put back the preparation for my Literary Festival for a week because I didn’t have time to proof the programme. I haven’t had so much time to spend on the crowdfunder for the The Lost Words. It means our book bus hasn’t got Vehicle Tax because that’s a direct debit through the DVLA.”
“Everytime I spoke about it yesterday I burst into tears, it’s so frustrating,” she said.
She has been concerned about the ripple effect on the small businesses she engages with as well as the impact on the relationships.
“I’ve spent a long time building up relationships and something like this makes it suffer. My coffee man is one-man band from Hay on Wye, and all these people who own their own small businesses need to be paid. I’m going to the Green Man festival to host a bookstore next week and need to pay them and this is all really difficult…We have been taking bank payments which are going somewhere above my head… I have to pay my 15 staff in cash. I have had to delve into my personal account to pay some of this.”
She recently took to Twitter to urge people to buy online to boost the store’s Paypal account so they could pay their suppliers, which prompted a flood of supportive messages from authors such as Beth Underdown as well as fellow booksellers and others in the industry.
“I have felt despair but the support from everyone in the industry has been wonderful, and shows how much you are part of a wider community,” Corfield-Walters said.
“Now lots of people have been buying off our website. I’ve had booksellers offering us everything from their Apple card-reader to a loan. Booksellers are amazing. I’ve heard of other booksellers experiencing similar problems. It clearly affects small businesses.
“Lots of people in publishing have been contacting me to say ‘how can we help?’. What I think is if I didn’t have the support network, I’m concerned about what it could be like for others. I’ve been in tears and been given hugs and a pat on the back but, given all these conversations about mental health we’ve been having, I’m concerned about the impact on others.”
She describes the treatment from HSBC as “very poor in all the senses of the word”.
Meryl Halls, m.d. at the Booksellers Association, said she was concerned to hear of small busiesses being treated in this way.
“It seems counter-intuitive for a bank to be closing the accounts of thriving small businesses. Not to mention that this is on top of the wholesale closure of high street bank branches in small towns, leaving the business owners in those towns not only inconvenienced, but without a key driver for consumers to visit their local high street too. This kind of action has the potential to put some out of business altogether, which is to the detriment of us all – our high streets, our banks, and our communities.”
Halls told The Bookseller that the BA was now writing to HSBC calling on the bank to ensure that other booksellers were not affected.
An HSBC spokesperson said: “As part of our efforts to tackle financial crime, we are conducting detailed ‘KYC’ reviews in which we ask customers to provide information about themselves and their businesses. We allow several months for this process because we may need to speak to customers multiple times to acquire additional data and to clarify what they’ve told us. We apologise for the inconvenience this causes, but urge customers to respond to our requests as promptly and comprehensively as possible. If we don’t receive all the information we need we may be forced to restrict services or, as a last resort, to close an account. We want to work with customers to ensure we don’t have to do this.”