Trying to remove a default from HSBC

[chris1977]

Hi,

I was hoping someone could give me a bit of advice. I received a copy of my credit file a few weeks ago and was devastated to discover a default of approx £1500 relating to my HSBC account. What is particularly frustrating is that I have worked so hard over the past 6 years having previously defaulted with another lender (default due to be removed next month at the 6 year point) and have an otherwise spotless credit history!

The default relates to an overdraft on a now closed current account, which I applied for during the time my marriage broke down in April 2007. The overdraft was intended as a "buffer" as I was also between jobs at the time. Admittedly I chipped away at the balance between April and August/September as this was a particularly challenging time for me financially and I did end up over my overdraft limit. HSBC eventually closed my account and passed the balance to Metropolitan Collection Agency. I agreed a payment plan with Metropolitan and I have been making regular payments since October, however, I do not recall ever receiving a notice of Default from HSBC and it is for this reason that I would like to challenge the legality of this entry in my file.

So far I have opened a dispute with Equifax online, but the bank have responded insisting that they acted fairly and that the terms and conditions of the account have been breached etc etc. Equifax have subsequently closed the dispute as the bank have verified the accuracy of the data held!

I have spent the last 3 hours on this site and have read some very interesting posts but I'm struggling to take in the vast amount of information and relate it to my specific circumstances, so I would be very grateful for any advice as to whether or not there is a chance I might get this default removed and what the next step would be.

Sorry for the long post but I think it's all relevant information.

Cheers

Chris

[freakyleaky]

Was the overdraft exeeded due to charges placed on the account?
Have a read of this thread S.10 Data Protection Act notice - if you have been defaulted for unlawful penalties.

[chris1977]

Hi Freakyleaky, thanks for replying. Unfortunately, the overdraft was exceeded simply due to financial hardship at the time. The reason I am disputing the entry on my credit file is due to the fact that I didn't receive a Default Notice

[chris1977]

Hi all,

Having read through some similar posts I've decided to ask for a copy of the default notice and the credit agreement, using one of the templates on here (Mr & Mrs One). This will be sent off today so I guess I just have to sit back and wait 28 days for them to fob me off (such a cynic!), then take it from there.

I'll keep you all posted....

Cheers

Chris

[freakyleaky]

One of the things you could do is ask them, in writing, to produce the default notice letter, and also ask for a copy of the original signed contract. Below is a draft letter you could use:-

The ABC Bank
1 Bank Square
Bank Town
BK1 7TD

Date: xxxxx

Dear Sir or Madam

Account number - xxxxxxxxxx
Sort Code - xxxxxx

After recently obtaining a copy of my credit file from Experian I was concerned to note that your company has placed a "Default" notice against my account.

Further to this I have no recollection of ever receiving such a notice, and I therefore require you to substantiate this data at your earliest convenience.

1. You must supply me with a true copy of the alleged agreement you refer to. This is my right under your obligation to supply a copy of the agreement under the legislation contained within s.78 (1) Consumer Credit Act 1974 (s.77 (1) for fixed sum credit). Your obligation also extends to providing a statement of account. I enclose a £1 postal order in payment of the statutory fee, PO Serial Number 1587 716732.
2. You must supply me with a signed true and certified copy of the original default notice
3. Any deed of assignment if the debt was sold on

I would request that this data is provided to myself within the next 28 days, if you are unable to provide this data then I must insist that it is removed from my files as unsubstantiated.
Yours faithfully

[chris1977]

Thanks Freakyleaky, that's exactly what I was referring to in my previous post, even down to the template

I'm not overly confident - mainly because of what seems to be a very grey area. From looking at the posts in this forum, and the varying degrees of success, it seems that the banks can decide whether or not they will comply with the various acts, depending on how they interpret them!

Anyway, I'll see what happens and let you know how I get on.

Thanks again

Chris

[chris1977]

Hi,

I've now sent a letter to HSBC asking for a copy of my credit agreement and the default notice. I've also just come across some interesting paperwork. I had a letter from HSBC dated 23 April advising me that my request for them to cancel a direct debit was received too late for them to action. I had a second letter dated 23rd April advising me that they had that day refused payment of the same direct debit and had charged me 25 quid for the pleasure :-/

Anyway, because of this, it looks as though the amount I have defaulted on does in fact include at least one penalty charge (the £25 charge mentioned above) so does this bring into question the validity of the information contained in the default notice (if indeed they can produce one!)?

FreakyLeaky - one of your previous posts asked if my default amount was made up of bank charges, so I suppose the answer is now "yes", albeit a tiny amount!

It might be worth mentioning that at the time that this charge was applied to the account, I was in the process of reclaiming past bank charges, however, I'm confident that this charge was not included as this was applied after I had started the ball rolling with the claim.

HSBC did actually refund my bank charges before any mention of court, as a "gesture of goodwill", however, it was shortly after this that they closed my account and placed a default on my credit file.

Any opinions or advice would be very much appreciated.

[pt2537]

Hi Chris, im sorry for the delay in replying

ive been exceptionally busy

right then

if the figure in the default contained a penalty charge then the default notice would have the incorrect figure in it as previously suggested. there is case law which renders a default notice invalid and as a result it would have not happened in effect

now do you have a copy of the default notice that they sent you? if you do can you post a copy of it? without the personal details

and also, you say they closed your account and stuck a default on your credit file.

was there any other markers on your file before the default appeared or did they just slap it on without warning

regards
paul

[chris1977]

Hi Paul, thanks for getting back to me. To answer your questions.....

I don't have a copy of the default notice as I don't actually recall ever receiving one. That's not to say that a default notice wasn't sent - during the time of the default I was between jobs, between homes and going through a separation so there's every chance it was sent and never received! I requested a copy from HSBC around a week ago, giving them 28 days to produce it so I'll be able to tell you when (and if) said notice ever materialises!

As for my credit file, there are no other entries relating to my HSBC account on there, aside from the default so it looks as though they just slapped it on there!

You mentioned case law which renders a default notice invalid if the figure is incorrect. Are you referring to Woodchester Vs Swain? I'm thinking that might be the route I have to go down but a couple of things worry me - 1. The words "de minimus" in the above case, which makes me think that the bank charges only making up a fraction of the default amount could be my undoing. 2. Will this depend on the ruling in the ongoing test case? If bank charges are deemed to be lawful then the amount of the default would still be valid whether it included charges or not? Perhaps I'm over-complicating things so feel free to say.

Cheers

Chris

[chris1977]

Update..... Yesterday I received a a letter from the Head of Marketing stating that he is pleased to enclose the information I requested...... a copy of HSBC's Personal Banking Terms and Conditions with Effect from 1st October 2007. Very useful Mr Head of Marketing, but not even close to what I requested, and certainly not what I expected for my hard-earned £1, which the bank has actually cashed.

I rang to chase the rest of the information, and to remind them that they have less than two weeks left to respond and was told that my request was passed to the CCS department a few days ago but had not yet been picked up.

I'm pretty confident they won't be sending me a copy of a credit agreement or any default notice as one was not issued and I believe with an overdraft this is not necessary, as long as a Termination notice was served (perhaps someone with a bit of experience can clarify this).

In terms of timing, can anybody clarify how long they actually have to respond to my request before they are in default? I read somewhere 12(+2) days but not sure if that was for the same thing....

[chris1977]

Received another letter from HSBC, dated 7th Feb, this time enclosing another copy of the same terms and conditions, general information leaflet on overdrafts and a price list! Oh, and a statement that the default notice letter will follow shortly. Of course it will HSBC!!

I'll give them until Tuesday (the 28 day point) then follow this up with another letter, politely requesting that they remove this default.

A bit of advice here would be appreciated before I write to them - All I'm really interested in is getting the default removed, I'm not disputing the amount even though it consisted partly of bank charges. The question I have is this... what would be the best act(s) to quote when insisting on removal. Here are the facts for reference:

1. No signed credit agreement
2. No Default / Termination Notice
3. Amount of default innacurate as it included at least two penalty charges

I would be very grateful for any advice

Cheers

Chris

[jowalshy]

Hi Chris, I'm sorry that I do not have the answers to your questions, but hopefully with me giving your thread a liitle nudge to the top, they will be answered.

[Castlebest]

Hiya Chris, I'm no expert on default notices but I do know that not possessing a signed credit agreement and not issuing you with a Default / Termination Notice are both breaches of the Consumer Credit Act.

pete

[pt2537]

If the account is closed and there is no contractual relationship between you and the bank they can get out of supplying a copy of the agreement by saying that since the contract has ended they do not have to supply.

so it would depend upon this.

however you could go down the Subject Access Request route as they would be expected to hold the documents under money laundering regs. you really need to get all the documents together first before you go ahead with this IMHO

[chris1977]

Thanks to everyone who has replied so far.

Paul,easier said than done I'm afraid. I received a letter from MCS today with the following text:

"We have been forwarded a copy of your letter sent to our client dated 15th January 2008.

We are unable to provide a copy agreement and default notice, as the above outstanding balance relates to a managed bank account, and it is not regulated under the Consumer Credit Act 1974.

We trust this clarifies matters"

I'm not exactly sure what a "Managed" bank account is, but this default relates to an overdraft on a current account, which as far as I am aware IS regulated by the CCA, as running account credit and they are obliged to provide this information in accordance with Section 78(1).

Also, how can they default me if the account is not regulated by the CCA??

Any ideas on my next steps? Given that they already appear to be in default of my CCA request, is there any vaule in submitting a Subject Access Request?

Cheers

Chris

[jcaps]

sorry to rain on your parade chris, i'm in exactly the same position with abbey. don't bother going to the FOS, they took 8 monthe to tell me that theres nothing i can do. even though abbey have said they were unsure of my post code (remarkable, thats the excuse for me not getting a copy of the default) also, amazingly, they sent me a cheque for £60 that was left in the account. this is 12 months after i paid the dca the full amount owed (apparantly).