martinpar V HSBC[ son had his HSBC credit card ]

[martinpar]

Can someone offer some advice on this one please?

 

My son had his HSBC credit card 'withdrawn' two or three months ago, coincidentally at the time he was challenging the charges on it. Every statement he's had since shows his credit limit unchanged at 1500. At the time they told him he could no longer use the card he was up to date with payments and under the limit. Their story is that it is an automated process which started some months before when he was behind and there was nothing that could be done to stop it (yeah right). They say he should carry on paying as normal and they will carry on charging interest as normal and maybe sometime in the future they will reinstate the card.

 

He has now received a default notice. As far as I can see it complies with the requirements of the CCA but it states the credit limit as 1500 and the amount outstanding as 1429.10. The breach is for an amount of 73.91, which must be paid by the 18th

 

Now as I understand a default notice under the CCA if the remedy stated in the default notice is actioned ie he pays the 73.91 it is as if the breach never occurred. This must legally mean his card remains in force with the limit as stated on the notice- as I see it.

 

We'd like to know exactly where he stands since it seems HSBC keep contradicting themselves and he says why shouldn't he let it go into default and further interest be frozen if they will not allow him to use the card anymore.

 

Thanks in advance.

[foolishgirl]

 

He has now received a default notice. As far as I can see it complies with the requirements of the CCA but it states the credit limit as 1500 and the amount outstanding as 1429.10. The breach is for an amount of 73.91, which must be paid by the 18th

 

Now as I understand a default notice under the CCA if the remedy stated in the default notice is actioned ie he pays the 73.91 it is as if the breach never occurred. This must legally mean his card remains in force with the limit as stated on the notice- as I see it.

 

We'd like to know exactly where he stands since it seems HSBC keep contradicting themselves and he says why shouldn't he let it go into default and further interest be frozen if they will not allow him to use the card anymore.

 

 

Not sure I understand why they have sent your son a default notice for £73.91. Is this the amount that he is in arrears on payments?

 

You are correct in saying that if this amount is paid by date on default notice it remedies the breach. If he can afford to pay this & he def. owes the £1429.10, in the same position, I think I would probably do so. Interest will not be automatically frozen on the o/s balance if he allows the default to continue & in so doing he would give them the opportunity to take further action to pursue the whole debt through the courts. It would also be recorded on his credit ref. files.

 

The conditions for not being allowed to use the card any longer would be in the T&Cs. I am assuming they have not given written notice of terminating the agreement?

 

Has he reclaimed any unlawful charges that may have been applied to the account eg. over limit, late payments etc.? If not, suggest he does so asap so that the total amount owing is reduced.

[martinpar]

Not sure I understand why they have sent your son a default notice for £73.91. Is this the amount that he is in arrears on payments?

 

Yes

 

You are correct in saying that if this amount is paid by date on default notice it remedies the breach. If he can afford to pay this & he def. owes the £1429.10, in the same position, I think I would probably do so. Interest will not be automatically frozen on the o/s balance if he allows the default to continue & in so doing he would give them the opportunity to take further action to pursue the whole debt through the courts. It would also be recorded on his credit ref. files.

I think his feeling is that if they have no intention of allowing him to use his card and he does nothing there will come a time in the not too distant future when the debt will pass to collectors and won't accrue any more interest, whereas if he carries on paying the monthly minimum interest will continue to be added for a long time. He's not so concerned about his credit file.

 

The conditions for not being allowed to use the card any longer would be in the T&Cs. I am assuming they have not given written notice of terminating the agreement?

Well, yes and no. This is where with everything they do and say they contradict themselves.

 

Has he reclaimed any unlawful charges that may have been applied to the account eg. over limit, late payments etc.? If not, suggest he does so asap so that the total amount owing is reduced.

Good point and yes he has. It amounted to 100 and he told them he wanted them to send him the amount rather than crediting the account but they won't do that for obvious reasons.

 

I have dug out the correspondence and this how it went:

 

 

• 23/7/8 Wrote requesting 100 charges refunded
  

 

• 10/8/8 Statement showing 1500 limit, balance under limit and minimum payment required by September. Subsequent statements show exactly the same credit limit.
  

 

• 13/8/8 They sent 'without prejudice' letter saying charges are fair but as he is 'valued customer' they will make an offer of full settlement once they have checked his account.
  

 

• 13/8/8 (Same day) they send a letter telling him that following a thorough review of the account they are ending the agreement.
  

 

• 8/8 He responds with a letter pointing out the fact that he is a valued customer and insisting they reinstate his card as it has run correctly for some months.
  

 

• 8/9/8 They write and say due to the automated nature of their system when his account fell into arrears in March it initiated a process which resulted in generic letters being sent including a demand letter on 18/8. there seems to be no such letter and this was 5 days after the termination letter. They quote 9a of the T&C 'We may cancel or suspend the use of the card and/or cheques for all or any purposes or refuse to replace or reissue the card if there is a breach of this agreement, or any other agreement between you and any member of the HSBC group'. they say as soon as an account is in arrears they put a stop on it, which is not what happened-they did it after it had been back out of arrears for a while. They also say it has nothing to do with his charges claim.
  

 

• 9/9/8 A letter confirming they will pay the claim in full ('valued customer' again) by crediting his account, which they did.
  

 

• He wrote and said he couldn't agree unless they sent payment by cheque or similar.
  

 

• 23/9/8 letter saying account was overdue by 36 and still stating the credit limit as 1500. It also states that the account is now closed.
  

 

• 4/11/8 Default notice. Limit 1500. breach 73.
  

Their position seems to shift depending on which department the letters come from (It was even worse when he started reclaiming charges on his current account- outright lies). He's given up trying to get sense out of them and just wonders what the legal position is and what he can do now. Obviously he wants to keep the card if he can, because it is the only one he has and it has been very useful.

 

Sorry this turned into such a long post.

[foolishgirl]

Martin, firstly can I suggest you ask a mod. to move your posts to the HSBC forum - you will get more specific advice there from others who have dealt with their eccentricities. (Just click the triangle on the left at the bottom of your post) & those who have subscribed to this will also see it.

 

In the meantime, just to take your last point as being the most 'urgent'. You say your son has an HSBC current account aswell as a CC. He MUST open a separate parachute current account with another bank immediately (there are plenty of high street banks who offer basic accounts even if your credit rating is not good). There is a good possibility that they will take any balance, income etc. from that account & use it to pay off the CC balance so empty that account asap.

[martinpar]

Foolishgirl, thanks for that. He has stopped using the account and has a Lloyds account now. I will ask to move the post as you advised.

[sea-sidelady]

Posts moved, and new thread made.

[foolishgirl]

Thanks SSL.

 

Martin, you should now get this thread brought to the attention of others who have experience of HSBC.

 

IMHO it sounds from what you have said that your son's account was terminated following his claim for charges & has nothing at all to do with the arrears. They can do this providing the they have followed the correct time limits, provision of notices etc. as stipulated in the T&Cs. No matter what they say re. reinstating your son's CC this is now impossible unless he applies for a new card - which would prob. be declined!! - so he is now officially in debt to them for £1400+, in default by £73.91 & he has nothing to lose by following the procedures for bringing that debt to a close without incurring further damage to his credit rating.

 

I am assuming that he has applied for a CCA & that it is enforceable?

 

If so, I would suggest paying the £73.91 asap if he can either & then approaching HSBC with wither (a) an offer of full & final settlement if he can afford it or (b) a payment plan to repay the remainder, including freezing any further interest. It doesn't have to be the minimum monthly amount they are requesting but if he doesn't pay the min. he is likely to receive a default against his credit file & they will pass the account to a DCA who will then harrass him for full payment. However before he makes any deal, he needs to ensure exactly what he is signing up to & the repurcussions of so doing eg. will they default him automatically, will they continue to add interest to the account etc.

 

Do NOT speak to them on the phone, put all proposals in writing, get their response in writing & do not sign any corresp. (use dig, signature or print so that cutting & pasting can't be done onto other docs.) & send everything Rec. Del.

Edited November 10, 2008 by foolishgirl
addition

[Castlebest]

Good evening martinpar and welcome to the HSBC forum oh what fun we have here , I think you will have gathered from foolishgirl's posts that you cant trust what the bank says, everything must be in writing and sent recorded delivery so you have proof of receipt.

 

First the credit card, If the last late payment happened in March and they have only just withdrawn the card and issued a default you have very good grounds for claiming they are taking retaliatory action for the submission of your son's claim, The banking code prohibits them from doing this.

 

I would sent them a Data Protection Act S.A.R - (Subject Access Request) letter asking for copies everything they have with your son's name on it including but not limited to, correspondence, internal notes, copies of telephone conversation recordings or transcripts of these and of course a copy of your son's credit agreement, in short everything they have and make sure you say until this is resolved your son's account is in dispute. This will give you some recourse when they try to collect the balance anyway .

 

From this you should be able to see exactly what they have done and the time scales they have used and put a complaint into the FOS.

 

Include the current account details in the same SAR and see what this provides. Apart from that just claim in accordance with the details in the FAQ's section of the forum and ignore the silly letters they will send to you.

 

Keep us posted regarding how your getting on and just shout if you need any help or explanations

 

pete

[foolishgirl]

Thanks for coming in with your experience & advice CB - I'd missed the March late payment bit.

 

A S.A.R - (Subject Access Request) would be an excellent idea to route out the paper trail.

Edited November 11, 2008 by foolishgirl
typo