HSBC problem

[Dougy79]

Hi.

I have had an ongoing problem with HSBC and I could really do with some help.

In June I received a letter from them saying that in a month’s time my overdraft would cease to exist and they want full payment. My overdraft was actually one that I got when I opened my account a long time ago before I went to uni. So it was a £1500 interest free overdraft, which was supposed to be paid back incrementally 3 years after graduation. I have actually graduated 6 years ago now and they never bothered with that. So I was left with £1500 to pay back in 1 month.

So I switched my main accounts to NatWest in case they locked the account because there was no way I could afford to pay that back in a month. I also informed them that I could not pay this back in the time period specified and offered them a payment of £25/month. They rejected this and sent me a sheet with incomings and outgoings and it suggested that I should pay back 33% of disposable income. So I set up a standing order for just a little less than the 33%.

I then received a flurry of phone calls in august, this was daily for about 10 days, from someone saying exactly the same thing, do you know your account is £1500 overdrawn, can I pay it back now over the phone? I gave them the same reply-same as above.

I then hear nothing from them for two months in which time I upped the standing order payment to 33% of my then disposable income.

I have now received two letters from them, quite threatening, basically saying that they have heard nothing from me and that they want payment. So I replied saying that I responded earlier to their request (and sent them a copy of my letter) and that I’m adhering to what they suggested. Then I get a letter the other day saying the same thing, that I have not responded to them, that debt collection agencies may get involved if I do not arrange something can I please phone one of their advisers to do an assessment form. So I replied and said that I have already done this and am paying them back the suggested 33%.

So I’m waiting for their reply but this situation is quite frustrating and I don’t want debt collection agencies involved.

The other thing which I noticed is that despite not using my account for this period of time, my account has actually increased not decreased. This is due to high interest charges of £27/month and pre notified charges of £45/month. The thing is that I haven’t been pre0notified of any charges and I asked in my letters what these charges were for and I received no reply. I also have a claim submitted from a long time ago for £300 regarding unfair bank charges (I expect it may be more now!) and I said in the letter that the total amount owed to them should be offset by this amount, which again they have ignored. So I was wondering what I should do about this situation? The only way the account will ever go down is if I pay an amount I can’t afford.

[Castlebest]

Hiya Dougy79 and welcome to the HSBC forum its not uncommon for the bank to realise that you still have a student account well after you have graduated and demand the repayment of the overdraft, this is their problem and mistake not yours.

 

I would write back to them stating that as they have never resolved the matter of your penalty charge claim your account is still in dispute. This should stop them continuing to try to collect the balance, reporting a default to the CRA's or passing the account to a DCA. They may still do this but you can fight them if you confirm the dispute .

 

Also update your claim to the full value of the penalty charges to date (how far did you get with your claim?) and submit this with the above letter confirming you want full reimbursement for the unlawful charges.

 

Do you have anything in writing regarding your standing order? as you are continuing to pay them some money on a monthly basis I don't think they can say you are defaulting anyway because you are paying them.

 

I would also have a read of the Student section of the forum because I'm sure you will find many people in exactly the same situation that you are in

 

pete

[Dougy79]

Hi thanks for the reply.

 

They stated in their initial letter, that the reason why they are reclaiming is because after a review they think that the overdraft with my credit rating is a liability to them or words to that effect.

 

Regards to the claim, I got to the stage of LBA. To which I got the response that along with the other major high street banks they are putting all cases on hold till after the case is resolved. Unlike with my credit card claims, I have not submitted anything more than this at this stage.

 

The only thing in writing regarding the standing order is my letter to them telling them that i've set it up. They have basically ignored most of my letters and just seem to send a new one out every month or so, saying I have to pay it all back otherwise debt collection agencies may get involved. As of yet, they themseleves have not asked for a set amount to be paid back each month, they have just demanded the full amount, rejected my first offer, said nothing about my second one.

 

I'm also bamboozled to these £45/month charges and what they relate to?

[Castlebest]

Hiya Dougy79, the pre notified charges are detailed on the last page of your statement, yes the page that everyone throws away because it doesn't actually have any statement on it .

 

pete

[Dougy79]

Hi.

 

I used to recieve these when I used the account, it never specified what they were for, just the amount due next month (presumably for being overdrawn).

 

However, there is nothing now on that section, no notification anymore.

[Dougy79]

I have recieved another threatening letter yesterday.

 

I would like to as suggested above, put this account on hold until the penalty charge fees have been settled. Do you or anyone else have a template for this?

 

I have one which i'll post below, which I used for another account, however, it's not quite correct because I have already started the process of claiming the money on this account, where as this template is for one that you're about to claim back. I'm also not very good at amending.

 

"

Due to new information regarding bank charges, I am writing to inform you that I am putting this account in legal dispute until i can assess the value of the balance mentioned on your letter dated

You will shortly receive a subject access request under the data protection act, with the statutory maximum fee of £10. Please note that the postal order will clearly state that it is for the SAR fee, and is not to be credited to the account.

 

I will as soon as I receive them endeaveour to settle the balance on the account to the best I can afford, and will supply you with a budget and that you will be paid on a pro-rata basis with my other creditors. If it happens that the amount is mainly/solely made of unlawful bank charges, I will use all amicable and legal means to recover those amounts.

 

As this account is now in dispute you must freeze all action on this account. This means that:

• You cannot add any interest to this account
  
• You cannot add any charges to this account
  
• You can not issue a default notice on this account, nor pass the debt onto any third party. Furthermore you may not pass any information regarding this account onto the credit reference agencies. To do this would be in breach of Section 13.6 of the Banking Code.
  

Any attempts to secure payment from me until this matter is resolved will be treated as harassment under the Administration of Justice Act 1970 an will be reported to the relevant authorities.

 

 

Should you wish to show your willingness to resolve the matter promply, you will make sure that I recieve the requested documents within the 40 days period specified under the DPA.

 

I also request that all further commnunications are in writing."

 

[jowalshy]

As you are aware I am in the process of reclaiming my charges back on the above account. I am therefore writing to inform you that I am putting this account in legal dispute until i can assess the value of the balance currently held with your bank.

 

I will be attaching with this letter a budget together with an offer of a repayment schedule in order to settle the balance on the account to the best I can afford. This offer of repayment will be paid on a pro-rata basis with my other creditors. If it happens that the amount is mainly/solely made of unlawful bank charges, I will use all amicable and legal means to recover those amounts.

 

As this account is now in dispute you must freeze all action on this account. This means that:-

• You cannot add any interest to this account [/font]
  
• You cannot add any charges to this account [/font]
  
• You can not issue a default notice on this account, nor pass the debt onto any third party. Furthermore you may not pass any information regarding this account onto the credit reference agencies. To do this would be in breach of Section 13.6 of the Banking Code.
  

Any attempts to secure payment from me until this matter is resolved will be treated as harassment under the Administration of Justice Act 1970 an will be reported to the relevant authorities.

 

 

Should you wish to show your willingness to resolve the matter promply, you will do so in writing.

 

I also request that all further commnunications are in writing."

Above is a rough draft of what you could possible send. Others may come along an add to it a little later.

 

 

[Dougy79]

Thanks a lot.

 

Although I didn't understand the budget part, what would that consist of?

 

They already have a copy of my outgoings and ingoings and I am paying them back money each week, but this only covers the £47/month charges they add to my account each month (the explanation I got in the last letter was because i'm overdrawn, I still think £47/month is a bit OTT!) and the interest. So at the moment there isn't really a prospect of me paying back the mone under these conditions. I really need to claim back the money from them first which would pay back a chunk of it, by which time i'd hopefully saved up the rest or a substantial amount and also then reclaim these new charges and use that to pay some back.

[johnnymitch]

Hi Dougy 79,

It may be worthwhile considering a 'parachute' account , which will take the money you need to exist on out of the hands of HSBC.

Parachute Account

 

http://www.consumeractiongroup.co.uk/forum/general/13832-do-you-need-parachute.html

 

This is an account with a completely separate bank, which you must not overdraw, but use for day to day expenses .

This will give you breathing space to deal with HSBC and pay them what you can afford if any.

 

Meanwhile, I would follow pete's advice in #2 and carry on with getting your claim to the 'stayed in court ' stage for three reasons :

 

1. It protects the 6-year limitation on refunds

 

2. It attracts 8% section 69 Interest when you start court action .

 

3. They will still probably hit your account with charges , but they can't take action to recover them without coming up against your claim in court .

 

As the account would then be unarguably 'in dispute' they can't pass it to a DCA for collection .........

[Dougy79]

Thanks.

 

But when they gave me a month's notice that they were reclaiming the entire account back, I actually opened up a natwest account and had all my wages transferred to there. I'm very pleased that I did.

[johnnymitch]

Oh ,well done , that man !

[Dougy79]

Ok the response I got back was, if I do not arrange a payment plan with them that suits them or pay back the full amount in 28 days, then they will formally demand the money back, sent my record to credit agencies, stop the use of the account (which they have already done).

 

Now I'm not sure what to do next?

[Castlebest]

Write back and confirm your account is in dispute and that they will be in breach of the OFT guidelines on debt collection if they continue to pursue this debt without resolving your dispute.

 

pete

[Archangel9]

Make sure that any letters you send are sent special delivery, that way they have to sign for it and you can track it to make sure they have received it. Recorded delivery, even though they are supposed to sign for it, a lot of places don't as the postman won't ask for a signature. Make sure it's traceable.

 

A.

[Audreygreeneyes]

well done Dougy, all the advice you need is on this forum....as is all the help you need as well.....

[Dougy79]

Thanks everyone who has helped Unfortunately the deadline for response is coming up and I'm now panicking as to what to write back. They responded to my last letter last week (where I said the account should be frozen because it's a l;egal despute)but I'm not sure what to write back. I still think that the case is a legal matter because , it was their decision not to go down the legal route after I threatened it-they chose to solve it without the law getting involved.Here is what the letter states.

 

 

"Thank you for your letter dated xx

 

Balance shown.

 

Interest is charged on the bank account at our standard overdraft rate of 18.3%.

 

There is no legal action pending at this time. We are unable to freeze interest and comission charges or prevent any further action from being taken.

 

We look forward to recieving repayment proposals asap.

 

Contact us on..."

[veester]

Sometimes i think (realize) that HSBC does not have a brain.

 

They agree something with you then totally do something different.

I have had very much the same problem with them.

 

Agreed to start clearing my OD after a few months - they agreed not to remove my Debit Card Facility and then did exactly that 3 weeks later.

 

They have no awareness of the law - with respect to the bank charges - they harrass and continue to make demands for payment when they have no legal write to do so.

[Dougy79]

Yeah tell me about it!

 

Does anyone have any advice on how I can phrase a letter back to them on this matter ? (the above letter), it would be greatly appreciated.

[Castlebest]

Hiya Dougy

 

Ok the response I got back was, if I do not arrange a payment plan with them that suits them or pay back the full amount in 28 days, then they will formally demand the money back, sent my record to credit agencies, stop the use of the account (which they have already done).

 

And you are paying them back as they wanted at 33% of your disposable income

 

Now I'm not sure what to do next?

 

Thanks everyone who has helped Unfortunately the deadline for response is coming up and I'm now panicking as to what to write back. They responded to my last letter last week (where I said the account should be frozen because it's a legal depute)but I'm not sure what to write back. I still think that the case is a legal matter because , it was their decision not to go down the legal route after I threatened it-they chose to solve it without the law getting involved.Here is what the letter states.

 

 

"Thank you for your letter dated xx

 

Balance shown.

 

Interest is charged on the bank account at our standard overdraft rate of 18.3%.

 

Fine its on disputed charges anyway so it will be repaid when they repay the charges

 

There is no legal action pending at this time.

 

So they basically agree with you and believe legal action would be futile

 

We are unable to freeze interest and commission charges or prevent any further action from being taken.

 

But are not above trying to frighten you

We look forward to receiving repayment proposals asap.

 

confirm you are repaying at 33% of your disposable income as requested by them

 

Contact us on..."

 

pete

[Dougy79]

Ok this is where I have got to now.

 

I have sent the below letter on the 13th of jan. I then recieved yesterday two letters, one from service management discussing the matters with me, another from the collections dept demanding payment within 7 days or they will pass it on to debt collectors. Today is the final day of the deadline even though I only recieved the ltter yesterday!

 

I really don't know what to do now, any advice appreciated

 

I am writing In order that I can clarify the position of this account.

As you are aware I sent a letter of the 02/12/2008 putting this account into legal dispute due to the claim pursued by myself in respect of Penalty Charges applied to this account.

I have enclosed copies of the relevant correspondence.

As you are aware I contend that Penalty Charges are unlawful and are contrary to the Unfair Terms in Consumer Contracts Regulations 1999. Schedule 2 (e) of the said regulations gives a non-complete list of terms, which may be regarded as unfair, such as a term that requires me as a consumer who fails in his obligation, to pay a disproportionately high sum in compensation.

And as such they make up a substantial amount of the overdraft.

In my letters of 02/12/2008 and on 9/8/07 I put this account in to legal dispute, which you seem to have ignored.

 

As this account is now in dispute you must freeze all action on this account. This means that:

· You cannot add any interest to this account

· You cannot add any charges to this account

· You cannot issue a default notice on this account, nor pass the debt onto any third party. Furthermore you may not pass any information regarding this account onto the credit reference agencies. To do this would be in breach of Section 13.6 of the Banking Code.

Any attempts to secure payment from me until this matter is resolved will be treated as harassment under the Administration of Justice Act 1970 an will be reported to the relevant authorities.

I trust that this will be ignored no further.

I will take this opportunity to highlight other lack of acknowledgements and issues.

a) The above mentioned dispute and the non freezing of the account until all issues are resolved,

b) The failure to acknowledge any of the correspondence associated with my claim in regard to the afore mentioned penalty charges

c) The failure to acknowledge my statement of income (copy enclosed)

d) As a sign of goodwill I have set up a standing order to repay £12.00 per week towards the outstanding (which will increase as and when I can), this has not been acknowledged either.

e) The charges now being levied on the account appear to be in contrary to the Office of Fair Trading guidelines. The Code of Guidance, which states: putting pressure on debtors or third parties is considered to be oppressive this includes: Ignoring disputes about whether money is owed and refusing to freeze action if the debt is in dispute.

f) The claim by myself could be offset against the Overdraft thus reducing the outstanding balance, this would of course have the benefit of clearing at least one claim from the masses that are accumulating, thereby freeing your valuable time

g) It would be of benefit to see a true copy of the terms and conditions in relation to this overdraft as it seems somewhat adrift from the original agreement.

 

 

 

I should also point out that I no longer wish to be contacted by telephone but by letter only

I hope to receive your full co-operation in this matter look forward to receiving you written reply within 14 days of this letter, in order that we can both move forward.

 

 

 

 

Yours faithfully

 

The twio letters from them

Final demand

 

Despite our previous communication concerning your debt we have to date received no satisfactory response.

 

We now demand immediate repayment of £1463.86

 

Interest will be added on the same basis as presently applies.

 

You have seven days to repay in full or let us have satisfactory proposals for repayment by instalments otherwise. If immediate repayment in full cannot be made, the attached statement of means form must be completed.

 

Action will be taken against you through debt collection agencies or solicitors if you fail to comply with this demand. You may also be taken to court

 

Goes on to say details give to credit reference agencies f we have not had satisfactory response within 28 days

 

 

second letter

 

Thank you for your letter dated concerning the charges applied to your account. I have now fully investigated the matters you raised.

 

I note your comments regarding your outstanding balance with hsbc, the bank is confident that our charges are transparent and legally compliant and that this belief will be upheld by the court. The opening of your account with hsbc and its subsequent use constitutes acceptance of the bank’s terms and conditions and the associated charges.

 

I note from reviewing your account that a demand was sent to you on 16h Jan. I would advise you contact pour financial guidance team on….. To arrange a mutually acceptable repayment plan. If by the end of this period we are unable to agree a satisfactory way forward, your account may be closed and the balance referred to a debt collection agency.

 

If you have any queries contact me on….If the matter is not resolved for you can contact senior manager of our service team at. I am obliged to inform you that if we cannot resolve the complaint you can contact the financial ombudsman service.

[Dougy79]

Hiya Dougy

 

 

 

 

 

pete

Thanks for the response pete,i'm actually paying them back at less than 33% of my disposable income. I would be willing to increase this but when the situation is clarified.

[Dougy79]

Incidentally, the reason for that is because when I filled out the self assesment questionaire they sent 6 months ago it was 33% of my disposable income. they never responded to this and pretend I never sent it to them.

 

Since then I have had a promotion and a pay rise, so it is no longer 33%, but like I said I'm willing to change the ratio.

[johnnymitch]

Hi dougy ,you could try using some of the stuff I've put in blue text towards a structured reply .........

Thank you for your letter dated concerning the charges applied to your account. I have now fully investigated the matters you raised.

Thank you for investigating this matter fully , that means you are now aware that this account is firmly 'In Dispute'

I note your comments regarding your outstanding balance with hsbc, the bank is confident that our charges are transparent and legally compliant and that this belief will be upheld by the court. The opening of your account with hsbc and its subsequent use constitutes acceptance of the bank’s terms and conditions and the associated charges.

Whilst you may be confident that the court will uphold your claims of legality and transparency, may I point out to you that the court has not yet done so and that the FSA waiver has been extended to enable the court to make it's own decision . This means that this account is still firmly 'In Dispute'

 

I note from reviewing your account that a demand was sent to you on 16h Jan. I would advise you contact pour financial guidance team on….. To arrange a mutually acceptable repayment plan. If by the end of this period we are unable to agree a satisfactory way forward, your account may be closed and the balance referred to a debt collection agency.

As you are also fully aware, the actions which you threaten in your letter of xx xxx xx cannot be carried out .....

a) you cannot close an account which is in dispute

b) you cannot transfer an account which is in dispute to a third party

Any such action on your part will be immediately reported to the FSA ,FOS, and Trading Standards as a breach of the Banking Code and the terms of the FSA waiver .

If you have any queries contact me on….If the matter is not resolved for you can contact senior manager of our service team at. I am obliged to inform you that if we cannot resolve the complaint you can contact the financial ombudsman service

You could also reiterate all of the restrictions that were outlined in your previous letter and also make them a reasonable offer of what you can afford if you wish... that will go down well if they do take you to court ...... which they won't !

Hope this helps .........best of luck

[Dougy79]

Thanks a lot, there's a lot of helpful stuff there.

 

What about the final demand letter though? Won't they carry out their threats whilst i'm responding to this letter? And therefore the debt will be passed on to debt collection agency?

[johnnymitch]

Dougy , they can't do it ........ they are not allowed to transfer the account whilst it is in dispute . If they do you write to the debt collection agency (which in HSBCs case is their own pet DAC - Metropolitan Collection Services ......who use their peremises and database etc ..... just another HSBC dept really ...... ) . Tell them the account is in dispute and should be handed back to hsbc ........