Charges but mainly Interest for switching account from Grad. to Basic w/out notice

[Abandon All Fear]

Hello all,

 

I have banked with HSBC since 1990 and converted to a Student Account in 1999 for university. Pretty obvious what happened next, however my main concern is what happened with my account after Uni.

 

In 2003 I graduated and converted up to Graduate Account- all these great flyers appearing telling me of different benefits (none of which I got to see)! Then after a few warnings of exceeding OD limit I contacted over the phone to say I couldn't pay up straight away. They just kept sending usual warnings and I ignored.

 

I changed over my account to an A&L one in 2004, then soon after, they converted down my Grad. Account to a basic one. They cancelled the overdraft and started charging 15%- no notice or warning:eek: . I am convinced this is unfair and breaches consumer acts. A year later they re-instated the overdraft (no notice or consultation again), but not the Graduate Account, so continued to charge 15% interest.

 

Even if they were entitled to withdraw the Grad account, surely they have offered me a new product without my agreement (overdraft re-instatement). Therefore they are already in breach on one account.

 

Anyway here is the letter and I appreciate any advice.

 

[My Address]

HSBC Bank Plc

 

11th May 2006

 

[Ref]

[Acc. Number] [sort Code]

Request for repayment of charges

 

Dear Mr Bowden,

 

My Request

I am writing to ask you to refund to me the charges, which you have levied from my account over the last 6 years. I am also requesting that you re-instate my Graduate Account which was reverted to a standard current account somewhere between June and August 2004 (with no written notice or warning), therefore automatically invalidating/withdrawing my Graduate Overdraft facility which began charging interest at approximately 15%.

 

Approximately 12 months later somewhere between August and September 2005, you re-instated the overdraft (at the same level of interest) without re-instating my Graduate Account Status. It seems as though this change was made only for the purpose of being able to charge me at a higher interest rate and I believe this amounts to unlawful practices subject to the Contracts Act 1999 and The Unfair Terms in Consumer Contracts Regulations 1999.

 

Subject to your terms and conditions of the Graduate Account. My Graduate overdraft during 2003/04 would have been interest free up to £1500, then dropping to £1000 for 2004/05 term and finally £500 this last academic year 2005/06. Therefore I am also requesting that the interest that would have accrued below these interest-free limits also be repaid for the last 3 years.

I now understand that the regime of fees, which you have been applying to my account in relation to direct debit refusals, exceeding overdraft limits and so forth, are unlawful at Common Law, Statute and recent Consumer regulations. If you say that they are not then will you please demonstrate this by letting me have a full breakdown of the costs to which you have been put by as a result of my breaches in order to reassure me that your penalties really do reflect your costs?

 

I would also like to draw your attention to the banking code which states in Section 5.3 that for any increase in charges, you will tell me personally at least 30 days before the change takes effect. Section 5.4 states I will be told of the charge for any other service or product before it is provided and in Section 5.5 that any interest or charges will be given at least 14 days notice of how much will be taken.

 

Additionally it has now been confirmed that your particularly high level of penalties are considered to be unfair per se by the OFT who reported on the 5th April 2006 and are therefore presumed to be unlawful in the absence of specific proof to the contrary.

 

Your responsibilities

I would draw your attention to the terms of the contract, which you agreed to at the time that I opened my account. It is an implied term of that contract that you would conduct yourselves lawfully and in a manner, which complies with UK law.

 

I am frankly shocked that you have operated my account in this way as I had always reposed confidence in your integrity and expertise as my fiduciary. I consider that your repeated representations that your charges are fair and reasonable are deceptive and that they have deceived me into agreeing to pay them. You concealment of the true nature of your charges has prevented me from asserting my right until now.

 

What I require

I calculate that you have taken £XXX plus £XXX, which you have charged me in overdraft interest for the sum, which you have taken, Total £XXX. Additionally you have entered 2 default notices against my credit record: [dates]. These defaults occurred merely in respect of

a) Unlawful charges levied by you,

b) Were the result of impecuniosities caused directly by the taking by you of penalty charges, which you had applied unlawfully to my account and

c) The direct result of changing my account from a Graduate Account to a Standard Account without justification or notice.

In addition to full payment of the sum mentioned above I require that you remove the default entries from the register. Please note that mere correction or amendment to the entry will not be acceptable.

 

My targets to resolve this matter

I hope that you will enter into a sincere dialogue with me about this matter and I am writing this letter to you on the assumption that you will prefer to do this than merely respond with standard letters and leaflets.

 

I will give you 14 days to reply to me accepting unconditionally my request in principle and letting me know a date by which I will receive payment.

 

If you do not respond or you do not respond positively within this time period, I shall send you a letter before action giving you a further 14 days in which to reflect. I believe that these targets are more than sufficient for a large company such as yours with dedicated staff and departments.

 

After that will be no further communication from me and I shall issue a claim at the expiry of the second deadline.

 

Yours faithfully,

 

Abandon All Fear

 

Enclosures: Notice pursuant to s.10 of The Data Protection Act 1998.

---

 

 

Notice pursuant to s.10 of The Data Protection Act 1998.

 

 

 

Re: [Account No] [sort Code]

Account holder. Abandon All Fear

[Address]

Whereas I have been a customer of HSBC Bank since 1990 and whereas I consented in my contract with you to the disclosure by you of certain data to third parties, at no time did I consent and neither was it within the contemplation of the parties to the contract that I did consent to the processing by you of that data in any manner which would be unfair or inaccurate or which in any way would breach The Data Protection Act 1998.

 

Therefore Take Notice that I require that you cease from processing within 7 days of the receipt by you of this notice or else that you do not begin to process any personal data of which I am the subject insofar as that processing involves the communication or passing of personal data of which I am the subject to any third party and insofar as the said data relates wholly or in part to the implementation by you of charges which have been applied to my account in respect of defaults or contractual breaches and where the said charges which have been levied at a rate which is in excess of the administrative costs incurred by you as a consequence of the said defaults or breaches contrary to The Common Law.

 

This Notice is given on the grounds that the processing or continued processing by you of the said data will be likely to affect my credit rating and my reputation and cause substantial damage and/or substantial distress to me and my family members in addition to that which may already have been caused and that as the processing of the said data in the way referred to in this notice would violate the fourth, first and sixth principles of The Data Protection Act 1998 to do so would be unwarranted.

 

Signed

 

Abandon All Fear

[Abandon All Fear]

Had a response from HSBC today.

 

Page 1

Page 2

Page 3

 

I notice Page 3 seems to be an additional disclaimer:

 

"I hope that you will be entirely happy with the attached response and as a consequence your complaint can now be considered resolved" (my emphasis).

 

Is this because they are now receiving a lot of these and they are trying to debunk the claim process, i.e. If you don't respond and attempt to discuss with them, they can bring it up as a defence?

 

I will now respond with a second letter warning of court action. I will also confirm I am not satisfied with the response and that I feel there has been an abuse of process with the changing status of my account.

[Abandon All Fear]

I sent my LBA letter on 26th May and have this time received prompt reply!

 

Response Part A

Response Part B

 

I have now been offered:

• 12 months re-instatement of my overdraft facility (no mention of interest free graduate)
  
• 2 months arrears of my student loan paid up and refunded the charges (but not the other charges from the last 6 years)
  
• They've even sent me a Student/Graduate booklet with application forms for a credit card and student account?!?!

I have also been advised they believe they will successfully resist any legal challenges in court!

 

Mighty generous then, considering they would win, why bother offering a partial refund?

 

However they have not, as I requested, re-instated the Graduate status of my account with refund of interest charges for the last 2 1/2 years. So I am thinking I should just go right ahead with legal action.

 

I suspect they realise they have acted underhand and therefore realise it could be slightly embarrassing to have this come out in the open in court.

 

So this is my first time at throwing the book at the bank, I'm fully prepared to go to court. But since this is slightly different from a charges refunded case, does anyone have any advice on claiming back mostly interest for their 'fiddling' of my account and the interest free overdraft:confused:

[Abandon All Fear]

Well I am 2 days away from taking action.

 

Since I want to make a claim against my bank not only for charges but for switching my account status (Graduate to basic with no o/d) and charging me interest, I really could use some help!

 

Looking at The Unfair Terms in Consumer Contracts Regulations 1999 (UTiCCR), would I be correct in highlighting their actions as illegal under Section 5 (1-4):

 

Unfair Terms

5. - (1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.

 

(2) A term shall always be regarded as not having been individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term.

 

(3) Notwithstanding that a specific term or certain aspects of it in a contract has been individually negotiated, these Regulations shall apply to the rest of a contract if an overall assessment of it indicates that it is a pre-formulated standard contract.

 

(4) It shall be for any seller or supplier who claims that a term was individually negotiated to show that it was.

 

And Schedule 2.1 (g, h and i):

 

(g) enabling the seller or supplier to terminate a contract of indeterminate duration without reasonable notice except where there are serious grounds for doing so;

 

(h) automatically extending a contract of fixed duration where the consumer does not indicate otherwise, when the deadline fixed for the consumer to express his desire not to extend the contract is unreasonably early;

 

(i) irrevocably binding the consumer to terms with which he had no real opportunity of becoming acquainted before the conclusion of the contract;

 

If someone could confirm I have this right for my specific case then that would be great!

[Abandon All Fear]

Hi,

 

I apologise in advance for opening another post, but I've had no replies this is my first time. I've posted my case here. However I just need some last minute guidance.

 

Today I will be filling out money claim as HSBC have not offered full refund. My case is not standard as I don't just want to claim charges.

 

2 years ago as a graduate I had a graduate account with them but they switched it to a standard account removing my interest free overdraft and started charging me 15%.

 

A year later they seemed to restore the overdraft but carried on with 15% interest charges. They did this each time without any notice whatsoever.

 

Therefore I feel there was some fudging of my account, this is what I want to sue them for.

 

Ive done some research myself into the legislation- see my original post, I just wondered if anyone had some concrete legislation to refer to or had already done something like this?

 

I will also be reporting them for 2x default notices as a consequence.

 

Really appreciate any help or advice offered!

[barracad]

Moderated: Threads merged - please stick to one thread.

[Abandon All Fear]

So I have now submitted my claim online. Since I am claiming for interest from the withdrawal of my graduate overdraft, I have modified the claim to reference the Unfair Terms in Consumer Contract Regs 1999:

 

Unfair Terms

5. - (1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.

 

(2) A term shall always be regarded as not having been individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term.

 

(3) Notwithstanding that a specific term or certain aspects of it in a contract has been individually negotiated, these Regulations shall apply to the rest of a contract if an overall assessment of it indicates that it is a pre-formulated standard contract.

 

(4) It shall be for any seller or supplier who claims that a term was individually negotiated to show that it was.

 

(5) Schedule 2 to these Regulations contains an indicative and non-exhaustive list of the terms which may be regarded as unfair.

 

and schedule 2,

 

g) enabling the seller or supplier to terminate a contract of indeterminate duration without reasonable notice except where there are serious grounds for doing so;

 

(h) automatically extending a contract of fixed duration where the consumer does not indicate otherwise, when the deadline fixed for the consumer to express his desire not to extend the contract is unreasonably early;

 

(i) irrevocably binding the consumer to terms with which he had no real opportunity of becoming acquainted before the conclusion of the contract;

 

So sit tight now and see if they make an offer or go to court. Will update with outcome.

[Don Quioxte]

2 years ago as a graduate I had a graduate account with them but they switched it to a standard account removing my interest free overdraft and started charging me 15%.

 

A year later they seemed to restore the overdraft but carried on with 15% interest charges. They did this each time without any notice whatsoever.

 

Therefore I feel there was some fudging of my account, this is what I want to sue them for.

!

 

hmm. Interesting. I am going to go and look at your original post.. But I am thinking that in the orignal ts & cs on of your Student Account it would have explained the process and timescale at which the Bank would upgrade your account to Graduate status, and subsequently to normal Bank Account status. It would have made clear the interest and overdraft parameters that each account may be subject to - i.e the student and graduate accounts interest free up to X amount. Thus the y would not be required to inform you of the change in status of the account from Graduate to standard Bank Account - even if this incurred interest paying facilities and altered overdraft facilities. It would be my opinion that HSBC will actually have informed you further, when you had the Grduate overdraft limit applied to your account that this overdraft was to be X limit and interest free until Y date in time. Further muddying the waters?

 

It is possible that HSBC withdrew the overdraft facililty in accordance with their Ts and Cs and thus you became liable for paying interest at the (sounds like) authorised rate... quite why they reverted to an authorised facility 12 months later is an anomaly - are you sure this wasn't following discussion with them?!

[Abandon All Fear]

Hey Don, thanks for the reply,

 

Firstly the terms of the Graduate Account was:

up to 1 year after graduating - £1500 limit

up to 2 years after graduating - £1000 limit

up to 3 years after graduating - £500 limit

4 years... hopefully all settled.

 

When they withdrew the facilities I was in year 2, and I am now near the end of year 3. There was some contact with them, but no warning of the downgrading.

 

Here is the history of what happened: After Uni I started getting real wages into my account, but the problem was when the overdraft limit came up I couldn't withdraw anymore cash and so was finding myself without any money for 2-3 weeks every month. I needed to manage it, HSBC would not give me any extension on the overdraft so my only option as I saw it was to open another account.

 

In 2004 I opened a basic account with Alliance & Leicester. I then changed over my wages, DD's and SO's to the new account. I called up HSBC as I had also a Graduate Loan with them (which they also would not extend) and needed the account details of the grad loan to pay into from my new account.

 

I don't have the a record of the conversation so from memory they said they could not give me those details, I enquired as to why and they said that the loan was linked to the account. I said that I was going to pay from my new account, they said I could not do that, I said tough and basically ended the conversation there. I don't remember at any point them warning me they would downgrade my account.

 

So the next month a default notice came through, so this time I contacted the branch manager and explained, she gave me the account details for the graduate loan... all settled. Next month the statements come through and I discover they have taken away my OD alltogether and charged me interest. I notice my account is no longer Graduate but Current.

 

I had, had enough of talking to them by this time, I found them rude, unsympathetic and unhelpful ever since my final year of uni, so I just accepted it and didn't think it could be changed.

 

12 months later I noticed they were putting my SO into my account first then taking it for the loan. so I changed the SO back to the account so making 1 payment instead of 2- At the time I was paying 1 for the OD and 1 for the loan. They then sent another default notice through because of this (they somehow rejected the new SO and therefore prevented it from paying the loan). They cleared it and started taking the SO. I noticed again, then next month they re-introduced the OD facility.

 

Both times no phone call and no letter to agree removal of OD or re-instatement. The re-instated OD was not the Graduate OD with free interest. I feel this has been a fudge. I acknowledge if they had written to me and notified me they were withdrawing it I wouldn't have a leg to stand on but I feel that they have not acted within their own banking code to notify 30 days in advance.

 

Also, another update:

Recieved a letter from them this morning to state they have acted within their t and c's. They also state that at the time of removing the OD facility they tried to contact me "either verbally or in writing"... obviously he doesn't know and is LYING! They reckon they have acted in accordance with the DPA 1998 and OFT directive 4 April 2006. They also advise it may be "mutually beneficial" for me to seek alternate bankers!

 

Does this mean they are threatening the closure of my account? HELP!

[Abandon All Fear]

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