CL Finance & HSBC

[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.

[spamheed]

Firstly, hello and welcome to CAG.

 

This shows why the financial institutions got themselves into so much bother.

 

Starting at the beginning, to discover what/if any charges have been applied to the account you would need to send a SAR to the original creditor, the new owner or the DCA responsible for the management of the account will generally have little more than contact details and amount outstanding. The SAR will cost £10.

 

On the legalities of the CCA etc. Nice try but no cigar!!!

 

When each of these arrangements was orginally entered into they would have been covered by the terms and conditions of an agreement. in the case of the overdraft this may have been little more than a letter from the bank explaining the T&C of the overdraft facility.

 

Whilst the DCA is correct about the Overdraft not being covered by the CCA, the account ceased to be an overdraft when they "Amlagamated" it, the same is true for the Personal Loan.

 

The agreements (whether covered by the CCA or not) would have been terminated at the point of amalgamation, those accounts would cease to exist and therefore any liabilities attached to them would be transferred to the new "amalgamation" agreement.

 

Still with me? Good!!

 

Since both the Overdraft and the personal loan were both contracts in law, any changes applied by the lenders to the terms and conditions of either contract must be documented. If the change to the contract is fundamental it would require the permission of all parties concerned ie a new agreement.

 

So to clarify:

 

Either the debt is two debts and half is covered by the CCA and the other by the T&C of the overdraft facility and you have a right to see both documents.

 

or

 

The debt is a single entity and is covered by the original T&C and the newly revised agreement for the amalgamated amount and you still have a right to see all documents pertaining to:

The original accounts,

The closure of the original accounts

The creation of a new credit facility and the CCA covering it.

 

In other words they should have a perfect paper trail showing where the money went and how it was handled.

 

They are b*llsh*tting you, you have rights and they are denying you those rights - I would suggest that you send them another letter requesting all documents from all three agreements

 

As the wise and wonderful Bart Man said "damned if you do and damned if you don't"

[Sirius]

Fantastic! You've eased my and more importantly my wife's minds considerably.

 

I'll write as you suggest and post any replies they may send (I don't suppose they'll give up easily!)

 

I am very grateful.

[spamheed]

Don't be surprised if they do come up with something equally ludicrous, These people are paid on commission so they will keep on trying.

 

Standard CAG rules apply - nothing on the phone, everything in writing and keep copies of everything. If they've already stated one case in writing and they then realise oops.....and put another excuse in writing, you have a cast iron, solid, bomb proof case if they should stupidly take you to court.

 

Also remember if they are stating that the debts have been amalgamated, then the original accounts have been cancelled and you are no longer liable for them, only for the new amount (if there is an agreement)

 

You need to request copies of the original agreements, the document that your wife signed to agree to the amalgamation of the accounts and the terms and conditions for the new amalgamated amount.

[42man]

It might also be worth sending a SAR to HSBC too - you can find this here - http://www.consumerforums.com/resources/templates-library/86-debt-collectors/576-subject-access-request-debt-a-dca Unfortunately this costs £10 - send postal orders and send recorded / special delivery to the Data Compliance Manager at their head office....