Consumer complaint received 2015-08-14
Company: HSBC NORTH AMERICA HOLDINGS INC.
State: NY
Product: Bank account or service
Sub-product: Other bank product/service
Issue: Making/receiving payments, sending money

Complaint:
We live in NY State. We were flooded by Hurricane XXXX and XXXX. Flood Insurance Money that came to us was withheld by HSBC Bank until we did repairs. It was about {$12000.00}. We believe some interest was paid on that amount to our account. Shortly thereafter, another {$40000.00} was given to us from Hurricane XXXX, and the Bank also withheld that money pending repairs to our home. On XXXX XXXX, 2013, HSBC transferred their Mortgage Services to XXXX XXXX XXXX. They are holding appx {$52000.00} Flood Insurance Money in their Bank pending our signing a reconstruction contract with a builder, which has not yet occurred. When our {$52000.00} was transferred to XXXX, there were no written receipt sent to us attesting to the fact that they had that money in our account. I made numerous phone calls to XXXX XXXX, asking for something in writing to prove that our money, in that amount, was being held by them. After all, if their computers went down, how could we prove that they had our {$52000.00}. If I put XXXX cents into a savings account, I get a receipt. XXXX XXXX absolutely refused to provide us with a receipt on paper attesting to the fact that they were holding {$52000.00} of our money. 
Also, they refused to say if they were paying us interest on that money. Apparently, there IS NO law in NY State requiring Banks to pay interest on Flood Insurance Money being held by Banks. WHY, I DO NOT KNOW. I AM SURE THE BANK IS MAKING MONEY ON OUR {$52000.00}. Any money they make on Our money is ours. I am sure they are investing that money, and keeping it. 

I wrote recently to the New York State Department of Financial Services about these XXXX issues. They forwarded a complaint to XXXX XXXX. I received a letter from XXXX XXXX supposedly in answer to my complaint. They did put in writing, in that letter, that they were holding {$52000.00} of our Flood Insurance Money. So finally, the State Agency got that in writing for us after two years. However, XXXX XXXX stonewalled on the issue of interest due us on that money. They filled half of the letter with an answer to an issue that I did not raise, and that was the issue of them releasing our Flood Insurance Money to us. I did not ask them to release any funds yet. They made it appear that they were answering my complaint, but they answered a question that they made up, not my real question. 
Finally, they did not address the issue of whether we were due interest, and if not, why. They stated this : " Additionally, we recognize XXXX XXXX 's and XXXX XXXX 's concerns over the interest earned on the escrow funds. With the final disbursement of the insurance funds, any interest earned will be released with the draw. " We realize that no interest has been paid on these escrow funds, because the bank would have issued us a XXXX form. 
We believe this is not fair. There may be as many as XXXX homeowners in New York State with banks holding Flood Insurance funds. They are, we feel strongly, profiting from all of these funds which are not theirs. Why are the Banks allowed to cheat us in this way?

Company response to consumer: Closed with explanation