@hsbc_uk_help 3.9% APR loan is misleading?

[Guest Patry]

I'm new to this site and came across it whilst trying to see what else I could do about what I see as extreme unfairness from HSBC.

I have been their client for the last 9 1/2 years. I had also had an account at a young age with the old Midland bank.

Through online banking I saw they were doing this amazing personal loan at 3.9% APR. Since I have a credit card with them which I must admit I am paying a very high rate (increased from 18.9% to 21.1% or around that - unsure of amounts) I thought I'd take a loan and clear off the card plus take a holiday since their low APR is for loans from £7k to £15k. I was looking at borrowing £8k during 36 months.

So I was brave and applied for it online. It told me I had to contact the bank by telephone. I did. After asking me a few question (eg. what the loan was for) they said it had been approved but the rate was 9.9% APR. I queried it and was told that that was it. I asked if they could put it in writing and was told no. Seems they can only put in writing if I had accepted the offer.

Anyway... I went to my local branch and asked who I could complain to and explained the situation. I was told to join experian or equifax. I joined experian and my credit score was showing as excellent at 965. The only downside on it was a credit score check by HSBC which meant when they checked it was even higher.

My only debt is to HSBC and is that c/card. I have never missed a payment on anything nor with anyone. Seeing that the loan is to clear the card then that would vanish from the account anyway.

After checking with Experian I tried applying again and was told to contact them again.

I decided to email them. Found a customer care team email address. Emailed them. Had no reply for a couple of days so sent them a message on online banking asking why no reply. Was told that they "never received said message". Asked me to email again which I did and had an email confirming receipt but no other reply so far.

I have also sent a complaint to the financial ombudsman. Just saw on the forum they don't see to be as helpful as I first thought.

I keep being told by HSBC that the APR they offer is due to "several factors". All I want to be told is "this is the main reason why we offer a higher rate" or "if you change this then we can revise the offer".

Just feels like they are offering the higher APR as then I won't be paying the ridiculous interest I'm currently paying (around £55-£60 per month just interest). It feels like they are saying that since they will not get as much from me then they will charge me more.

Without me asking they increased my c/card limit to £6.5k. For them to do that they know I will repay that amount and likely a high interest amount. If they are confortable enough to do that then why charge me such a higher rate?

Are they misleading customers? I had another friend who has no debt at all and applied and had the same answer as me.

Is there any way they can actually prove they have offered this rate in good faith?

It truly doesn't feel like it. It feels like they refuse to discuss the subject and suggest any positive solution to what I'm querying.

I am currently waiting a response from the customer care team and from the Financial ombudsman but seems like I shouldn't hold my breath.

If there any place I can complain if I truly feel they are misleading customers? It feels they hold out a sign saying an excellent deal here but then it's all fake.

I'm sorry it is such a long post but am truly at a loss on what else to do.

I'd appreciate any help or advice if possible.

Thank you

[king12345]

Usually in their advert's small print it says that the apr is subject to credit factors or something similar.

This gives them the right to apply any apr they want.

As long as one person (their employee?) gets the advertised 3.9%, they're ok.

World of banks...

[KSmith82]

Usually in their advert's small print it says that the apr is subject to credit factors or something similar.

This gives them the right to apply any apr they want.

As long as one person (their employee?) gets the advertised 3.9%, they're ok.

World of banks...

 

That isn't how it works. The 3.9% APR is described as a representative rate meaning that AT LEAST 51% of successful applicants will get the headline 3.9% rate.

[king12345]

That isn't how it works. The 3.9% APR is described as a representative rate meaning that AT LEAST 51% of successful applicants will get the headline 3.9% rate.

 

51%?

How do they measure that?

Is it a target that they have to achieve by the end of the deal or something fictitious i.e. Theoretically 51% of the population would get this apr but only the non eligible applied?

[KSmith82]

What I said above was a simplified explanation. The actual requirement (thanks to the EU Consumer Credit Directive in 2011) is that "the representative APR must reflect at least 51% of business expected to result from the advertisement".

 

So HSBC would have to make these estimates/expectations before the advert/campaign is actually run and they would use data from previous promotions etc. to make these estimates.

[king12345]

All in the grey area strangely...

Don't you love banks?!?!

[Guest Patry]

This is indeed a tricky one. I hope the Financial Ombudsman can try and see if the advertisement was possible. I have to say that seeing my current status and seeing another friend who applied and was also given a 9.9%APR then it's unlikely they are offering this rate much. A guy at the local HSBC said that since my friend had the Advance account then he would certainly be accepted.... It didn't work out that way... Would be curious to see what results people have had when applying for this offer. I'll have to wait for reply from the customer care team from HSBC and for the financial ombudsman. They said I should expect a reply within 3 weeks... Let's keep fingers crossed...