Farnham Town Council has launched a complaint to the Financial Ombudsman over HSBC’s demand for a personal credit check on all “staff and signatories” with a council bank card in order to increase the council’s credit limit.

According to the town clerk, Iain Lynch, HSBC’s demand was “totally ridiculous” and stemmed from the bank “simply not having a box to tick called ‘council’”. Instead, he told councillors the council is being treated as a business, requiring a credit check in the same way a business owner would be checked.

During last Thursday’s meeting, the clerk updated members on the situation and confirmed the necessity of the complaint. The council currently has a combined credit limit of £10,000 on all credit cards, with approval to increase this to £25,000.  

However, Mr Lynch said the purchases required by the Farnham Support Fund have put a strain on the credit limit, prompting HSBC to demand a personal credit check on staff members or signatories in order to increase the corporate credit limit.

The town clerk also advised that the option to move the council’s accounts away from HSBC was discussed, but there had been no further progress yet.