HSBC & CL Finance

[Sirius]

In circa 2000, unknown to me my wife managed to get into a financial tangle after becoming redundant which resulted in her going overdrawn on a current account with the HSBC. She was continually stung with penalty charges which dramatically increased the amount owed (an original overdraft of something like £2000 is now a debt of £6300, even after 9 or so years regular payments). HSBC then apparently offered her a personal loan to pay off the overdraft (all over the telephone - no paperwork). She accepted the 'offer' and of course, she was unable to keep up on the repayments, the debt spiralled and ultimately ended up assigned to CL Finance in September 2007.

 

I became involved when my wife owned up to me and told me CL were putting her under severe pressure to keep increasing repayments she could not afford. My first move was to try to determine indebtedness and how much was due to penalty charges, which was impossible due to lack of paper trail. At this time I am sure anyone could have written to my wife demanding money and she would have been so frightened she would have paid without any query.

 

Because I could not verify how much the original debt or charges were for, or indeed find any details whatsoever I CCA'd CL Finance in March this year. They failed to respond until this morning when they sent a letter (plus the usual red-print Final Demand for the whole outstanding balance).

 

They acknowledged my CCA request and have stated that 'this account is an amalgamation of personal loan and an overdraft' and they state, an overdraft is exempt from Part V of the Consumer Credit Act 1974 because an overdraft does not require a formal written agreement to be enter into, therefore there are no documents available.

 

In respect of the personal loan element, they claim the HSBC has reported to them that as the agreement was opened more than 6 years ago they, the HSBC, have no documents available because they are not obliged to retain records after 6 years. This, they report, does not make the original agreement void or unenforceable. However, my wife is certain she never signed any agreements whatsoever anyway.

 

Is a debt that cannot be verified properly enforceable? We have no idea whatsover what the original amounts involved were for and how much has been added in charges, and how much has been paid.

 

Any advice would be most helpful.

[johnnymitch]

Hi sirius , welcome (back?) to the forum

 

If they are still expecting money to be paid they have to have a solid signed agreement to be able to collect .

 

This rubbish about 6 years is just that - rubbish ! They are obliged to keep the documentation for at least 6 years AFTER the loan finishes ....... Can you imagine HSBC chucking away an agreement , just because it's over 6 years old , but still operational ?

 

So, if they cannot produce a certified true copy of this agreement , they have no right to chase for payment ........ the debt is unenforceable ----- this doesn't mean it goes away , it just means they can't chase you for it and you can pay it as and when it suits you .....

 

You could send them a letter something like this :

 

Reference ....... (your letter of xx xxx xx)

I am disappointed that you have failed to respond positively to my request for a copy of my Loan agreement to which I am entitled under the Consumer Credit Act 1974 (Sections 77−79). A copy of this letter is attached for your convenience.

I have previously enclosed a payment of £1.00 which represents the fee payable under the Consumer Credit Act.

I understand a copy of our credit agreement should be supplied within 12 working days.

Your reply is unacceptable and inaccurate , in that HSBC must keep the documentation regarding this matter for at least SIX years AFTER the loan is finished, not from when it commenced .

I am sure you also understand that under the Consumer Credit Act creditors are unable to enforce an agreement if they fail to comply with a request for a copy of the agreement under these sections of the Act.

Failure to respond positively will be reported to the Financial Ombudsman Service and the Office of Fair Trading.

Yours faithfully

[johnnymitch]

Oops , sorry , I pressed save before I was finished sirius ...... .

 

They are right that the overdraft part is not subject to parts of the CCA, however , you should still be able to track the current account statements going back to 2003..... (six years ) by sending a SAR asking for them , and any other documentation you feel you need to pursue both the charges and Loan Agreement ......

 

http://www.consumerforums.com/resources/templates-library/48-bank-templates/110--data-protection-act-1998-subject-access-request-

 

Also, just reading your post again , - if the Loan was used to wipe out the overdraft , there is only a loan in existence, therefore they have to have an agreement for the lot ! No ?

 

The main fact is that this account is 'In Dispute' because of their inability to substantiate it via an agreement - so they have to back off until this is resolved . This is an excerpt from another letter which may come in handy when you write to them :

 

"Furthermore you should be aware that a creditor is not permitted to take ANY action against an account whilst it remains in dispute

 

The lack of a credit agreement is a very clear dispute and as such the following applies

 

You may not demand any payment on the account, nor am I obliged to offer any payment to you

* You may not add further interest or any charges to the account

 

* You may not pass the account to a third party

* You may not register any information in respect of the account with any credit reference agency

* You may not issue a default notice related to the account

 

I reserve the right to report your actions to any such regulatory authorities as I see fit

You have 14 days from receiving this letter to contact me with your intentions to resolve this matter which is now a formal complaint."

 

Come back if you need any further help , sirius, - someone will answer and we're user-friendly on here ..

Edited June 18, 2009 by johnnymitch
erasing font marks

[Sirius]

Great. I am really grateful for your advice and will despatch letters, as suggested.

 

I'll doubtless be back for more more of your sound guidance should I get any further communications from them - I'm pretty sure they won't give up too easily.

 

Thanks again.