HSBC Retaining Wrongful Credit CIFAS Marker Removal

Our client received funds into an HSBC account that were later said to have been sent in error. The difficulty was that the customer disputed that characterisation and believed the money was genuinely owed in connection with a separate transaction.

HSBC appears to have moved from that dispute into a Misuse of Facility filing without first resolving the underlying question. The complaint therefore turned on a simple but important point: if there is a real disagreement about whether money was wrongly credited at all, can a bank properly treat the case as established fraud at that stage.

The report confirmed a Misuse of Facility marker filed by HSBC and described the issue as retaining wrongful credit. In practical terms, the filing appears to have assumed the credit was wrongful rather than proving it.

That was the core weakness. The report did not meaningfully resolve the factual dispute about the money itself, even though that dispute was central to whether the customer's conduct could honestly be described as fraudulent. If the underlying entitlement question remained open, the filing risked getting ahead of the evidence.

The complaint focused on sequencing and proof. It argued that HSBC had treated a contested position as if it were already an established fraud finding, even though the customer maintained the funds were legitimately due.

That let the challenge push the bank back to first principles. HSBC was asked to explain why a live dispute about the status of the credit had been turned into a CIFAS marker and where the evidence of dishonest intent actually sat. The complaint highlighted the risk of recording fraud where the underlying facts had not yet been properly settled.

HSBC removed the marker within five weeks after reviewing the complaint and accepting that the dispute had not been adequately resolved before filing. Once the bank had to confront that unresolved factual issue, the marker became much harder to defend.

For similar cases, the lesson is that retaining wrongful credit allegations often sit on top of disputes about entitlement. A bank may be right to freeze or investigate, but a CIFAS filing still requires more than an unresolved argument about who the money belongs to.