Advice needed please!

[Alastrum]

Hi everyone,

After a couple of years unemployment due to redundancy, I am finally, slowly, getting my life back on track, slowly clearing debts, and trying to build a small business of my own.

I have a basic bank account with Barclays, which I use solely for the rent, to keep it separate from any problems elsewhere.

I have a current account at Lloyds, for day to day use.

I have a current account and a business account with HSBC.

Due to the recent downturn in the economy, my business is slow to stationary, and I am not actually making any money at all at the moment, although the business is a sound idea and I have high hopes for the future, if I can just get over the last few hurdles. Currently I am living only on Working Tax Credit and Housing Benefit, which works out as less per month than I would get from Job Seeker's Allowance, but has the benefit that I am free to earn money from my business without it being penalised by loss of benefits.

 

Anyway, i am currently overdrawn in both my HSBC accounts, both unarranged overdrafts. This isn't due to unnecessary spending, just my direct debits for things like fuel, broadband, water rates, phone bills etc.

 

However, HSBC is charging me astronomical sums, almost pound for pound: From being £157 overdrawn, I find myself owing them £243, that's £86 in charges!

I appreciate and accept the principle that if I have an unarranged overdraft then I pay a charge for doing so; but a reasonable charge would be something in the region of £20-£30, not almost as much again. As you can appreciate, trying to clear debts when on such a low income is difficult, almost impossible when the banks keep moving the goalposts like this. On top of this, they've cancelled my cards, which I find a bit heavy handed, as a) I wasn't actually using them, and b) it's not like I owe them thousands: the amount I actually owe them is laughably small compared to many other people.

 

What's my best course of action here? Ideally, I'd prefer not to pay these charges, but will they listen if I simply ask them to drop it? Or can I force them to decrease the amount in any way?

 

Many thanks for any help.

[Castlebest]

Hiya Alastrum and welcome to the HSBC forum .

 

From the description of your circumstances you seem to have a lot of bank accounts for a small personal and business cash turnover I think you would stand more chance of avoiding charges if you closed or at least claimed your charges back and abandoned your HSBC accounts until things get better.

 

I'm assuming your business is on a sole trader basis trading in your name(not a limited company). I'm pretty sure that you are still allowed to use a personal bank account for a small business on this basis although you will have to be meticulous with your records for the Inland Revenue i.e. make sure you pay your taxes and NI on any money that is taxable and be able to prove what you have done if they ask you to.

 

So if your business account is in credit just remove any money and write to them confirming the closure of that account and use one of your other accounts for business transactions but keep records of what you have done.

 

With the charges on your personal account I would pay a personal visit to your branch and try to get these reversed. This sometimes works in a one off situation, don't try phoning because you will just get the call center and they are hopeless and refuse point blank to even look at giving you back your charges.

 

If they wont reverse the charges then I would start a claim to recover these and take it to at least the letter before action stage. Everything you need to know is in this thread but don't be frightened to ask, we don't bite

http://www.consumeractiongroup.co.uk/forum/faqs-please-read-these/31460-example-step-step-instructions.html

 

Once you have done that your account will be in dispute and they shouldn't take any action against you until the dispute is resolved so just walk away from your HSBC accounts, they will keep adding charges but you can add these to your claim. The only way they can recover what they will see as a debt is via the county courts and they will run smack bang into your claim if they try that.

 

HSBC don't play fair and tend to turn a blind eye to the strict meaning of the various consumer protection laws and codes so anything they send you just post it up here and we will advise you what to do and say to them .

 

Good luck and keep us posted how your getting on

 

pete

Edited January 15, 2009 by Castlebest

[Alastrum]

Hi, thanks for your response.

I was more or less co-erced into getting the HSBC accounts: I was part of a New Deal scheme aimed at getting people off benefits and into being self-employed, and part of the package involved getting a business bank account. The recommended bank was HSBC, presumably because the scheme had some sort of arrangement with them. The other accounts are there as parachute accounts.

I take on board your suggestions about trying to deal with them on a personal level: I'll certainly give it a try, although my actual branch is many miles away from where I currently live, and getting hold of them on the phone is well-nigh impossible: I'm far more often likely to end up talking to a call-centre in India!

I currently have a stayed claim for over £4000 in charges against NatWest, dating back to Summer 2007, just prior to the OFT case being launched: annoying, because if that claim had gone through, I wouldn't be in this mess now:)

I'll try the personal approach, and if that doesn't work, I guess it's time to start another claim: after all, why not?

Many thanks for your help!