Giving an informal overdraft and taking the proceeds

[sheepshead]

Hi everyone, frequented here for a long time, but got an issue i cant find! Will try to keep it short. I have a HSBC business account, about Jan 07 £90 overdrawn and it started!!. so lodged claim around April 07 for charges and the overdraft interest they keep adding. Stopped using the account and with charges and interest has gone from -90 to -£2200. Been into branch to discuss a resolution as well as the usual letters. No result so far. and so to the latest issue...

 

I have a current account and several savings accounts, i removed all excess funds from them some months ago expecting issues. However this month i went £36 O/D on my personal current account. I have just received a letter telling me they have granted an informal overdraft etc for £750. In the same post a letter telling me i am £750 overdrawn. Yes, they gave an overdraft on my current account which i did not request for an item of £36 an overdraft of 750 then took the remaining £714 of the overdraft and transferred it without my knowledge to my business account to offset the huge charges they have applied since my dispute began.

 

Where do i stand, i know they can take money from accounts (pretty sure though it wasnt in my T&C's when i opened the accounts long long ago) but to give me an overdraft i never asked for and then take the money!??? what can i do, where do i stand?

 

Hoping for some help !!

[yourbank]

The bank can do so under the right of set off, ie creditor balances against debit balances at the same bank.

Edited July 19, 2008 by yourbank
have offset in my head and its wrong terminology

[sheepshead]

thats maybe true, but they can grant an overdraft of 750 for an OD of 36 without my request, then take the money that i didnt ask for?????

[yourbank]

Unplanned/unarranged/informal overdraft, to me sounds like bank charges plain and simple.

Have you seen what has actually gone through that account?

Have you seen a bank statement either online or on paper?

[sheepshead]

Yes i have it all online, they gave an informal overdraft on my current account and same day took the money and put it in my business account. I have the letters they sent "granting " the overdraft i didnt ask for.

[HSBCrusher]

I don't see the point of HSBC doing this... you still owe £2200, just in different places, I don't see the advantage of them doing this. Open an account elsewhere, keep track of where the money has moved, its still made up of charges... when the claims get going again you will get it back.

You did well removing the excess money, all they have done is moved the alleged debt from one place to another.

[Castlebest]

The banks right to set off applies to funds you have available in other accounts it doesn't mean they can create an overdraft and use those funds to pay off another account

 

I would wait until you have the statements proving what they have done and write to the FOS to complain.

 

As Crusher has said all they are doing is moving their debt around which will complicate any claim to refund penalty charges because you will have to prove the money trail through all of your accounts this will mean mixing business accounts and personal accounts in the same claim too.

 

pete

[HSBCrusher]

this will mean mixing business accounts and personal accounts in the same claim too.

 

pete

good point.

 

these charges were raised from a business account, but now reside in a personal account.

 

Yep, I think the new overdraft is wrong, and make a complaint, but I wonder whether the 700 odd quid has now become easier to reclaim

[Castlebest]

I don't think so because the charges were made against the business account not the personal account, its just a debt in the personal account and will only complicate the reclaim process

 

pete

[johnnymitch]

I'd be inclined to send them a (recorede delivery) letter complaining about their unauthorised mixing of the Business Account with the Personal Account -ask them to re-instate the funds to where they were - there's no way this can be justified.

 

Send a copy to the FOS to start their ball rolling and let HSBC know you've done it -

[HSBCrusher]

I don't think so because the charges were made against the business account not the personal account, its just a debt in the personal account and will only complicate the reclaim process

 

pete

possibly pete.

 

but I'd be tempted to have a go when the claims start rolling again, a couple of letters wouldn't harm... we all know what DG are like

 

It is quite improper for them to do this though... especially with this mixing of personal and business monies, I think a complaint would be prudent, and really that money should go back where it came from.

[johnnymitch]

but I'd be tempted to have a go when the claims start rolling again

 

Hi Crusher, any reason to wait till the claims start rolling again? Maybe an immediate complaint to FOS, who are apparently taking a while to answer these days anyway, would precipitate an adjustment of the account.

[Castlebest]

I think Crush was referring to the common law problems the test case threw up for business claims but thats under review by people here anyway and I think they have a way forward .

 

As for complaints and this case in particular I think the bank have over stepped the mark and a complaint should be sent immediately

 

pete

[HSBCrusher]

I think Crush was referring to the common law problems the test case threw up for business claims but thats under review by people here anyway and I think they have a way forward .

indeed I was, but you are quite correct CB, I think we do have a way forward, but its not going to be as easy as it was before.

[sheepshead]

Thanks guys, something to think about - am going to get paper copies of everything for tomorrow to show the trail. Am also going to the branch to see what they have to say. Is there a decent template for a complaint to FOS?

[johnnymitch]

Hello sheepshead,

 

Try this link it should give you all you need :

 

our complaints procedure and how to complain

 

As for complaints and this case in particular I think the bank have over stepped the mark and a complaint should be sent immediately

 

I couldn't agree more pete.......

[johnnymitch]

Just a thought, sheepshead, the bank mixing Personal and Business finance is not going to go down well with the taxman ........ maybe that's a lever if you're in the bank to get them to put this back the way it was.....they have interfered with your business income & expenditure figures...

[Castlebest]

indeed I was, but you are quite correct CB, I think we do have a way forward, but its not going to be as easy as it was before.

 

Ive asked Steven to have a look at this thread, I think this case lends itself to the new business claim particulars.

 

pete

[sheepshead]

ok, should i wait before i action anything, if you guys have advice on how to proceed in a set format?

[steven4064]

Hi shepshead

 

One question - is you business account for a company or are you a sole trader?

[sheepshead]

only a sole trader!!!

[sheepshead]

sorry, only sole trader!

[Castlebest]

I think you will be in much cleverer hands than mine from now on Sheeps , I'm sure they will be back to you shortly.

 

pete

[steven4064]

Of the total £2000+ OD, how much is bank charges?

[sheepshead]

ok well thats where it gets a bit confusing but as such all of it. All of the amount is their overdraft charges and interest. Of course, what concerns me is that the interest is higher than the court rate of 8%, but it all relates to them charging me and then charging interest. Am happy to upload copies of the blanked out statements or a schedule of charges and the letters received from them if it helps.