HSBC force new loan to pay charges....

[iconoclash]

Hi - been worrying about this deal HSBC talked us into. Had a pers. loan + overdraft but had claim pending re penalty charges also. Bank insisted we take out new loan to consolidate all oustanding monies owed, or else would pass to DCA and close accounts. Eventually, after lots of calls they sent us papers for new loan. Now owe more money, some extra £6000 at higher rate. Are they allowed to do this?? - what should I do?? any advice welcome - thank you.

[foolishgirl]

Have you signed up to anything re. this new loan? If not, don't!!

 

HSBC should not be encouraging you to take on more debt - it's against OFT guidelines - & there are probably much better/economical ways of dealing with your current debts. If you wish to supply more details I'm sure CAGers will help.

[iconoclash]

HI - thanks. Yes we've already signed up but I am annoyed that they wouldnt send us any info first, said only they could organise this from their collections dept and that the branch were not involved. I now see that having a formal claim in for nearly £2000 in charges was enough to say that the account was in dispute and therefore they could not have passed it to a DCA anyway - maybe I thought that they Loan account was the major problem as we'd stopped paying whilst waiting for them to consider paying the charges claim. They admitted we are in financial hardship, what with having a reposession action ongoing for the house etc, but still wouldnt budge. Seems too late now to do anything I guess.

[foolishgirl]

Sounds as though you may need some specialised advice - have you contacted the Citizens Advice, National Debtline or anybody like that?

 

If you think you need more immediate help & a mod. on this forum may be able to provide it, click the triangle at the bottom left of your post.

[johnnymitch]

Hi campari ,

 

Foolishgirl is right , - what they have forced you into is a 'Managed Loan' which is the worst of all possible worlds ......

 

You say that you have a 'formal' claim in for charges ...... what stage is that at ? If that was in operation when they 'talked' you into this loan , then as you say , the account was 'in dispute' and couldn't be passed to the DCA ..... and a collections agency can't organise a Managed Loan for HSBC .......

This whole episode is abominable practice and I think foolishgierl is right ... that you need to get advice from your local CAB , who usually have an excellent debt councelling facility , or National Debt Helpline

 

National Debtline, for FREE CONFIDENTIAL and INDEPENDENT ADVICE call 0808 808 4000

 

From what you say , they have misrepresented this loan and taken advantage of your situation to force it on you ...... Perhaps someone else on the site more clued up than I am can help you further with this ......there is wealth of knowledge on here ....... a Mod or Site Team Member should be able to point you in the right direction.

But try all avenues as suggested .....

[Lula]

I have asked someone to come and take a look, at the very least, not sending any paperwork till you were signed up is a BIG no no

[42man]

I would also call Consumer Direct - Consumer Direct .....these managed loans are weird, nothing is 'managed'..... - did you sign the agreement ? as I know some of these loans are organised over the phone....How long have you now had this managed loan ?

[lateralus]

i'll leave the in's and out's to someone else - but just one small possible point - you say they sent the paperwork to you - i believe if you sign in their office the cooling off period does not apply - but as you apparently signed away from the office - the (i think) 14 day cooling off period may actually apply (assuming it is within that time frame)

just a possible point for you to play with

[iconoclash]

Hi - I think I'll try to get in touch with some expert agencies on this and get back to you:)

[marcaz]

Hi All

I think the key here is how was the loan sold to you, if it was sugested that, sighn it or els senario, that would be illigel anyway, as the bank has used "undue influence".

[johnnymitch]

I think the key here is how was the loan sold to you, if it was sugested that, sighn it or els senario, that would be illigel anyway, as the bank has used "undue influence".

 

Hi Marcaz , welcome to the forum....... You are absolutely right , the only problem is proving it, if there's nothing in writing - and you can bet your boots there won't be ! These threats are invariably telephone conversations..........

 

 

Hi - I think I'll try to get in touch with some expert agencies on this and get back to you:-)

 

I think that's your best course of action at this stage Campari2.... let's know how you get on, though , it may help others along the line......

Best of Luck ......

[iconoclash]

Hi - does anyone know anything about these regs for financial services, I'm interested in these re bank loans organised over the telephone, in particular Managed Loans where they pay off other debts and existing loans.

 

I want to check if my bank has given me enough information on the previous debt (alleged) and I can't see anything about the settlement rebate on the previous loan either, if or how it has been applied etc. I think there may be some parts of the new paperwork that relate to other Statutory Instruments too e.g. OFT wrote:

Disguised penalties:

4.21 The analysis in this statement is in terms of explicit, transparent default fees. Attempts to restructure accounts in order to present events of default spuriously as additional services for which a charge may be made

should be viewed as disguised penalties and equally open to challenge

where grounds of unfairness exist. (For example, a charge for 'agreeing

to' or 'allowing' a customer to exceed his credit limit is no different from

a charge for the customer's 'default' in exceeding his credit limit.) The

UTCCRs are concerned with the intention and effects of terms, not just

their mechanism.". These penalties being within the new loan. Ideas????

[iconoclash]

Hi - I guess that I must have the wrong legislation here then? Does anyone know which applies re banks re-negotiated loans where the bank have rolled up and paid off the original and started another?? please please:)

 

PS with no info on settlement of other/previous

Edited December 15, 2008 by iconoclash
added post script

[iconoclash]

Hi - couldnt see anything like my query so here goes:

 

If I have a loan already with HSBC and they make a new loan which will pay off previous one what details should I get from them regarding the settlement of the other - like what should be in the agreement? just a lump sum or calculations etc? how will I know what method theyve used?

 

thanks:)

[johnnymitch]

Hi Campari 2:)

 

I would ask them for a complete breakdown of how the old loan fits into the new one and how it is confirmed as 'settled' because the old loan no longer exists ......

 

btw ,- it's not a 'Managed Loan' - is it?

[iconoclash]

Hi - thanks for response - yes, its a managed loan, but what is a managed loan, surely just a name that the bank have given it, not outside the Acts etc is it? This is the one we went on TV about and we cancelled it, bank says they did not get the letter.?! Also, it has nothing in the paperwork about the consolidation of what where when how. No separate cancellation notice, no pre-contract forms, just sent out together and drawn down within the cancellation period. ????

 

any advice welcome thanks:)

[johnnymitch]

Campari , I have to tell you that a 'Managed Loan ' is not just a name that the bank have given it .

 

I think Pete Castlebest one of the wise men of this forum described it better than I can :

 

"

I'd never advise anyone to let them ‘bestow’ one on you. It happens when you are deeply overdrawn - charges every month, then they present it like the holy grail - they will loan you the money to pay off the overdraft - you'll be back in the black - hurrah! and maybe even a little extra to spend on whatever you want. it's a con! you will be paying for that little loan for a long, long time to come - and I mean years and years and years! the loan rate is way above the norm - like at least 10 points higher. They pay themselves the interest every month, month in and month out and very little off the principle of the loan.

There are probably hundreds on this forum who are struggling with managed loans. Try to keep your head above water and do what you can to clean up your finances , but under no circumstances fall for hsbc's managed loan - it is like indentured slavery! You will live to regret it."

There is also a good link here from Lateralus - a very wise lady on this forum

 

http://www.consumeractiongroup.co.uk/forum/hsbc-bank/162162-advice-managed-loan-please.html[/font]

Ultimately ,of course , it has to be your call campari2 ,but come back if you need any further advice .........

Edited May 19, 2009 by johnnymitch
tidying font marks ..........

[iconoclash]

Hi -thanks - sorry but still not sure where to look for the info whether past items are to be itemised in the contract or not?

[Castlebest]

hiya campari2... just be very carefull with managed loans and HSBC... the original idea of these things was sound... lend the person in trouble some money to get over a tempory cash flow problem and review it regularly to make sure it was still the right thing to do....

 

The problem comes because its supposed to be a tempoary loan therefore has a very high interest rate... and the bank are greedy so never review it so your stuck with it for ever .

 

Having said that I have seen 4 people here with what appear to be offers of zero above base rate managed loans... have a look at this thread

 

http://www.consumeractiongroup.co.uk/forum/hsbc-bank/197459-managed-loan.html

 

all I can say is read what they send you... read it again... and agian and be very wary of them

 

pete

[johnnymitch]

Having said that I have seen 4 people here with what appear to be offers of zero above base rate managed loans... have a look at this thread

 

And of course the terms and conditions give them carte blanche to vary it once they've got you hooked .........

[iconoclash]

Hi - as my info on my claim is all over the place in threads ITN News etc etc the latest on this is now here. After the March airing of interview on Channel 4 the bank contacted me, they insisted that the new 'managed loan' was not missold etc and it is not settled. They stated they would pay the penalty charges claim now but only to priority debts and not to me. In the First round of arguments they wanted to use this claim money to pay the managed loan so pay themselves but I refused that. They now say they will pay two bills that I sent them and wrote to confirm this on 17 June. Since then both companies concerned have now issued warrants against me despite my sending them the copy of HSBCs letter advising the money was on its way. So, now I am stuck up the creek without a paddle.

The bank wanted me to sign papers to say that the complaint was settled in full blah blah so I signed it but wrote it was limited to the matter of the charges claim. It now looks like the bank have decided this wont do and have not paid the accounts as promised - they have also sent the loan issue to DG Solicitors for collection - bearing in mind that this loan included the penalty charges also?! I am so fed up with this.

[Castlebest]

Hiya campari, thats appalling I'm not really up to speed on true hardship claims because I just don't trust this bank and normally advise people to tie there claim up in a stay, leave the account overdrawn to a value slightly less than the claim and move bank.

 

I will try to get your bank to have a look at your thread as he has better knowledge of how things should work in these situations.

 

pete

[yourbank]

Have they written back confirming they won't pay it back?

I know this may not be the done thing but have you telephoned them and asked them what is happening since you have returned their form accepting that they pay your priority debtors directly(explain that you have received warrants).

[iconoclash]

Hi - no. No contact but the other companies say they do not accept third party payments - if I ring the bank I will just get a call centre person - they never give proper contact info and I was given a number before that turned out to be non-existant - I know the banking code says they have to give you one point of contact but the bank keeps changing it, every time you get a letter its from someone else - so annoying. I guess I'll just give it all to the DJ to look at in the end - if they take me into court - I cant afford to take them in to answer up!

[yourbank]

What are the warrants / which companies/debts are they for?

 

When did you send back the acceptance ?

 

How much arrears do you have on the managed loan (if any) and are they paying those arrears from the hardship claim refund or just the two other bills?