I was hoping for some opinions on a recent complaint to HSBC over mistakes they have made with reporting incorrect information to the CRA's.
I took out this loan (£60,000) in 2008 to pursue my dream job as a commercial pilot and despite passing all the training, the economic downturn in 2009-2010 led to my redundancy in 2013. The loan was set up based on my expected salary with the company I was sponsored by and the monthly repayments were £939/mnth.
Since the redundancy it has been difficult to keep up with payments and i've tried my best to communicate with the bank and request help but to no avail.
In August 2014 the balance of the loan was just over £30,000 and after trying to grow our business for some time, payments were getting tight. My resolution was to finish the refurbishment of a property we had bought and refinance it to release enough equity to clear the loan. The figures made sense and there was no reason we wouldn't be able to do it.
I contacted HSBC and explained the situation and that I need some assistance to get through the few months it would take to refinance the property. After several heated conversations they finally agreed to put in place a reduced payment plan but I was advised that I would have to let the loan fall into arrears by 2 payments in order to implement it. The agreement was for 12 months and providing I made the reduced payment, my credit file would be frozen at 2 missed payments throughout.
I discussed this with our mortgage broker and he in turn approached the lender to explain my circumstances. They advised that because there was a history to the situation and I was in this position due to the economic downturn and not through irresponsible spending, they would consider an application with the 2 missed payments on my file and didn't see that this would prevent a mortgage being agreed especially since the property was very comfortably covering the expected mortgage payments.
We applied in December 2014 and early into January 2015 I was advised that it had been declined at the initial stag due to credit. I queried this with the broker but the underwriting department would not clarify why the sudden U-turn.
Now under time pressures to refinance the property (we had a private investor to pay back too) we were told that our only hope was for me to gift my equity to my father and for him and my partner to apply for the mortgage whilst I resolved whatever was happening with my credit file.
We did this but due to my fathers limited experience as a landlord, we were only offered a sub-prime product which we had no option but to take. This allowed us to repay the investor but didn't leave anything to pay off my loan.
I downloaded a copy of my credit file to make sure everything was as agreed and to my surprise, I found that HSBC had not honoured their end of the agreement. My credit it file had continued to accrue arrears and was now showing as borderline default. No wonder the mortgage company wouldn't even look at my application, it made me look an idiot after explaining that it wouldn't get any worse than 2 missed payments.
I complained to the bank and explained that not only was I now unable to pay off the loan but it had cost me around £15,000. This was made up from a capital gains bill from transferring equity to my father, increased fees and interest on the sub-prime mortgage and astronomical early redemption penalties to get out of the mortgage down the line.
After many weeks they eventually agreed they were at fault but then tried to wriggle out of it by saying that I didn't give them adequate time to resolve the issue before going ahead with the equity transfer and sub-prime mortgage. They offered £3,000 in compensation to be taken from the arrears that had accrued. I politely declined and explained that I would refer to the Ombudsman, which I did.
Whilst this was happening, they again reported incorrect information to the CRA's and this was picked up when we were declined a bank account for our Ltd company. I immediately notified HSBC and they apologised, promising to fix it. This has meant we cannot begin trading as a ltd company and we are therefore at increased personal risk until this is resolved.
Added to all of this, the payment plan which was agreed for a period of 12 months was removed early and with no warning or communication. I received a call on 18th September advising that it the bank had decided to remove it at the end of August (conveniently as I had taken my complaint to the Ombudsman). I was advised that as of that date I was 2.7 payments in arrears. I never received any letters or warning that this was going to happen.
I frantically tried to raise enough to make a full payment before it jumped to 3.7 missed on the 24th Sep. I couldn't manage a full payment so managed to keep it at 2.9 by paying 0.8 of a payment and in October as things became tighter still, I only managed 0.2 of a payment leaving me at 3.7.... or so I thought.
I then received a default notice stating that I was over 4.5 payments in arrears. I immediately contacted the bank who explained that it had been sent in error and they would look into the arrears and let me know. They then reported that 4.5 was correct which means that the payment plan had to have been removed earlier than they told me it was.
To keep this as short as I can, I today received a letter from the Ombudsman explaining that they have found the bank at fault on several things over the period of the loan. They have suggested a further £200 to compensate me for the inconvenience, financial loss and stress over the past 12 months!!
I find this a joke considering that I am now over £15,000 out of pocket and it's almost certainly down to the string of mistakes made by HSBC.
I have thought about small claims court but i'm aware of the risk if I don't win. Is there any other avenue I could go down?
Thanks in advance if anyone reads this far, your advice or thoughts are much appreciated.