Remove a default from HSBC

[richypat07]

Hi i would appreciate any advice that would aid me in removing a default from HSBC from my partners student overdraft (very similar situation to the thread from chris1977 http://www.consumeractiongroup.co.uk/forum/hsbc-bank/126335-trying-remove-default-hsbc.html

 

Although there were monthly payments of £50 or more made via a standing order setup over the phone 6 months prior to them closing the account without notification of closure and default (we only found out about the closure when she went to the branch to pay in additional money, and they couldn't explain the reason for closure and gave her the number for Metropolitan to set up a payment plan.

 

We only found out about the default today when we went to our mortgage lender as we are planning to move house but now cant until this is removed.

 

Does anyone think we have grounds to speak to the branch again explaining the situation as we feel the account should not have been closed as it was receiving money each month (i think they were unhappy as we had both transferred our custom to another bank and wanted the overdraft payed in full).

 

All we want is the default removed and we are in a position to pay the remaining balance in full, are they right to issue a default when there has never been a time when the account has not been credited for more than 1 month (as this is an overdraft and not an agreed loan that she has missed payment of).

 

Sorry if this is information overload, so many questions so little time.

 

Any thought/advice appreciated.

 

Rich

[johnnymitch]

Hi richypat , welcome to the forum

 

To be totally honest with you -it is really difficult to get a default removed , basically because it means the bank admitting they made a mistake, which they won't do , unless forced to .

 

However, it is not impossible and has been done - I see you've already seen chris 1977's saga . You could also try these links and see if they give you any ideas ....

 

42 Man’s Default Notice - definition and rules (see #25)

(important )

http://www.consumeractiongroup.co.uk/forum/hsbc-bank/204565-pipster-hsbc-2.html#post2249314

 

http://www.consumeractiongroup.co.uk/forum/data-protection-default-issues/164871-castlebests-default-removal.html#post1946244

 

See #5 on the above link

 

If you have any further queries don't hesitate to come back and ask - you'll always get an answer on here - and we're user-friendly

[richypat07]

Thanks.

 

Are the bank correct in applying the default as the account had an agreed overdraft and the account was receiving monthly payments via a standing order/dd. Surely them setting up this standing order/dd they are accepting this as a sort of payment plan.

 

Could anyone explain the the reasons a bank could issue a default on a bank account.

 

Also, am i correct in thinking that if they fail to respond to a CCA section 78 request the account/debt is then in dispute and the default will be removed until the dispute is resolved??

 

Thanks

Edited July 31, 2009 by richypat07

[Castlebest]

You should have received a default notice that should list the reason/s for placing your account in default. If you didn't receive this then getting a copy of the notice will be your starting point.

 

Unfortunately your incorrect regarding removal of a default if the account is in dispute in fact they have been marking peoples credit files with defaults just because they have disputed their accounts although they would deny that .

 

The credit reference agencies are a byproduct of the banks and as yet there is little legislation to control what information is placed with them or how the banks use that information so they can basically do what they please.

 

pete

[richypat07]

You should have received a default notice that should list the reason/s for placing your account in default. If you didn't receive this then getting a copy of the notice will be your starting point.

 

Unfortunately your incorrect regarding removal of a default if the account is in dispute in fact they have been marking peoples credit files with defaults just because they have disputed their accounts although they would deny that .

 

The credit reference agencies are a byproduct of the banks and as yet there is little legislation to control what information is placed with them or how the banks use that information so they can basically do what they please.

 

pete

thanks

 

So are they right to place a default on her account because she changed her income over to another bank even though she had set up a direct debit of £50 so the overdraft was coming down?

thanks

[Castlebest]

Unfortunately its got nothing to do with right or wrong, the Banks needed a way to check on the credibility of potential loan customers so the credit reference agencies were born...

 

As they are a service to banks and all they do is collate the information that is given to them by the banks they are, whether they like it or not, the banks lap dog.

 

You can post an objection (as I did) to anything that is placed on your record and it shows as a tiny "flag" against the item your objecting to but all of the records stay intact, nothing gets removed and the "flag" is so small you would miss it if you didn't know it was there.

 

As I said in my earlier post there is very little legislation controlling this system and IMHO there needs to be, but until the fat slugs of politicians get off their arses and do something about this instead of lining their own nests there is nothing you can do but place an objection with the FSO or take the bank to court both of which will take time... my guess would be a minimum of six months but probably longer.

 

pete

[richypat07]

Hi everyone

 

I have received a letter from HSBC today containing an electronic copy of the default notice (which i requested). I'm not sure if it actually is a default notice? The letter head mentions FINAL DEMAND and also includes a statement of means. I can scan a copy of this letter if it helps.

 

Is a default notice normally have a header of FINAL DEMAND and include a statement of means? It also mentions that they want a payment in full or a proposal for repayment by installments (which she did do).

 

Please could anyone advise where i could go from here??

 

Since the account is around 7/8 yrs old is it worth going down the signed copy of the credit agreement route??

My partner has had the account for about 7.8 yrs although her account was transfered to a graduate account around 4 yrs ago (but she doesnt think she signed a new agreement).

 

many thanks

[InformedSearcher]

The account should have a default notice - check the dates and everything else on it carefully as HSBC seems to fail often. Two weeks after the default notice will probably follow a final demand however if you have an 'agreement' then the formal demand might not be sent and there are exceptions - phew here we go as (I see it)!

HSBC have discretion but seldom use it. They operate on a points system - 1 point for each missed payment. Six points and the default notice will generate. Now before you say well I paid £XX a month as agreed there's a twist. For example say your payments were £100 a month but due to hard times you agree to pay £50 a month. So you are paying 50% of the payment and that will start the points counting = 0.5, then you only pay 50% of the next payment, again £50 so the points are now 1.0 and so on. You should also consider that the CRA files are getting marked up. HSBC run around 2 months behind on late payment CRA file updates but it'll show them in red by now and the last once eventually will show a 'D' (for default) in a nice red circle. The file would show the deliquent balance will if you are making part payments will vary as times progresses and bear in mind the details are not 'as it happens'.

 

I think the next step is to do a S.A.R and within 40 days (if lucky) and a tenner spent you can see all the paperwork generated by HSBC and check it all out. Sadly as previously mentioned HSBC as other banks are exceptionally reluctant to remove defaults (which remember will remain for an uncomfortable 6 years!). To a potential lender a default might as well be a CCJ and even if 'satisfied' (as in paid up entirely) it's not going to vanish for those years.

If they have entered a default on the CRA's then I'd suggest you decide to no longer verbally communicate with them but to require all further contact by letter. Remember thought to take no nonsence from them at any stage - heck that sounded like fighting talk. Oh, if it might damage any current account with them I'd suggest opening a parachute (basic) bank account elsewhere. I've used LloydsTSB and the Co-Op as you can open the accounts by telephone with a zero opening balance.

 

There are some great people on here who will no doubt help you along the way as they have with myself. More laughs to follow on a new thread about my wife's HSBC credit card.

Michael

Edited August 17, 2009 by InformedSearcher

[richypat07]

The account should have a default notice - check the dates and everything else on it carefully as HSBC seems to fail often. Two weeks after the default notice will probably follow a final demand however if you have an 'agreement' then the formal demand might not be sent and there are exceptions - phew here we go as (I see it)!

HSBC have discretion but seldom use it. They operate on a points system - 1 point for each missed payment. Six points and the default notice will generate. Now before you say well I paid £XX a month as agreed there's a twist. For example say your payments were £100 a month but due to hard times you agree to pay £50 a month. So you are paying 50% of the payment and that will start the points counting = 0.5, then you only pay 50% of the next payment, again £50 so the points are now 1.0 and so on. You should also consider that the CRA files are getting marked up. HSBC run around 2 months behind on late payment CRA file updates but it'll show them in red by now and the last once eventually will show a 'D' (for default) in a nice red circle. The file would show the deliquent balance will if you are making part payments will vary as times progresses and bear in mind the details are not 'as it happens'.

 

I think the next step is to do a S.A.R and within 40 days (if lucky) and a tenner spent you can see all the paperwork generated by HSBC and check it all out. Sadly as previously mentioned HSBC as other banks are exceptionally reluctant to remove defaults (which remember will remain for an uncomfortable 6 years!). To a potential lender a default might as well be a CCJ and even if 'satisfied' (as in paid up entirely) it's not going to vanish for those years.

If they have entered a default on the CRA's then I'd suggest you decide to no longer verbally communicate with them but to require all further contact by letter. Remember thought to take no nonsence from them at any stage - heck that sounded like fighting talk. Oh, if it might damage any current account with them I'd suggest opening a parachute (basic) bank account elsewhere. I've used LloydsTSB and the Co-Op as you can open the accounts by telephone with a zero opening balance.

 

There are some great people on here who will no doubt help you along the way as they have with myself. More laughs to follow on a new thread about my wife's HSBC credit card.

Michael

 

Thanks for this, when you say 'part payments' do you mean part of the agreed payments i.e loan, this is an overdraft facility that my partner had on her no closed account (debt passed on to Metropolitan to recover).

 

I think i will have to go down the signed credit agreement route as the account is closed and the default has been placed on the account (unbeknown) 3 months ago.

 

Are they still right to issue the default when even in the final demand letter it states that were are happy if a sufficient monthly payment would be agreed (which it was) and we didn't hear anymore until the account was closed?

 

Can anyone advise me whether the best route to take is to challenge the default or go the signed credit agreement route using this link?

 

http://www.consumeractiongroup.co.uk/forum/legal-issues/173201-why-you-shouldnt-use.html#post1868913

 

Many thanks

[InformedSearcher]

Thanks for this, when you say 'part payments' do you mean part of the agreed payments i.e loan, this is an overdraft facility that my partner had on her no closed account (debt passed on to Metropolitan to recover).

 

I think i will have to go down the signed credit agreement route as the account is closed and the default has been placed on the account (unbeknown) 3 months ago.

 

Are they still right to issue the default when even in the final demand letter it states that were are happy if a sufficient monthly payment would be agreed (which it was) and we didn't hear anymore until the account was closed?

 

Can anyone advise me whether the best route to take is to challenge the default or go the signed credit agreement route using this link?

 

http://www.consumeractiongroup.co.uk/forum/legal-issues/173201-why-you-shouldnt-use.html#post1868913

 

Many thanks

 

Personally I'd suggest the S.A.R. first and foremost. Ensure you ask for case notes in the request and anything else - there's some infor on the site here.

 

I'm sorry i'm a little confused - final demand letter, so you did get one? In that case not a default notice preceeding it? Metropolitan are HSBC's in-house collection agency with access to all your account.

 

If you 'agreed payments' to them then as far as I know their points system will begin on any failures. It had probably started to accumulate prior to you repayment agreement. You did the agreed payments verbally or by letter? You must have had communication with the bank before they moved it to Metropolitan then?

 

Overdrafts are by agreement with the bank. They say but seldom ever recall in full at their discretion. I'm confused how if you had an agreed overdraft that you ended up with a repayment schedule or is it that the overdraft facility ran out and was not renewed? By reading what you have said I guess you were repaying at £50 a month. So how much was it to start with and how long did it remain unpaid? I'd suspect Metropolitan advised you of everything. There agan a bank would not look on things too well if you have an account with an agreed overdraft, ran it up and then no longer touched the account - The alarm bells would start to ring.

 

Michael

Edited August 17, 2009 by InformedSearcher

[richypat07]

Personally I'd suggest the S.A.R. first and foremost. Ensure you ask for case notes in the request and anything else - there's some infor on the site here.

 

I'm sorry i'm a little confused - final demand letter, so you did get one? In that case not a default notice preceeding it? Metropolitan are HSBC's in-house collection agency with access to all your account.

 

If you 'agreed payments' to them then as far as I know their points system will begin on any failures. It had probably started to accumulate prior to you repayment agreement. You did the agreed payments verbally or by letter?

 

Overdrafts are by agreement with the bank. They say but seldom ever recall in full at their discretion. I'm confused how if you had an agreed overdraft that you ended up with a repayment schedule or is it that the overdraft facility ran out and was not renewed? By reading what you have said I guess you were repaying at £50 a month. So how much was it to start with and how long did it remain unpaid? I'd suspect Metropolitan advised you of everything. There agan a bank would not look on things too well if you have an account with an agreed overdraft, ran it up and then no longer touched the account - The alarm bells would start to ring.

 

Michael

Yeh she changed over to a halifax account, the account wasn't touched for 3 months and started paying the £50 pm when the cancelled the overdraft facility, this was continued for 8 months with 8 payments, they then closed the account with no letter and only found out when she went into branch to pay in additional money (the branch also could not find out why the account was closed which to me if they dont know why the account was closed how have they informed us?)

 

Thanks

[richypat07]

Thanks again can i ask why you suggest the S.A.R over the link i posted above?

If i cant get the signed credit agreement with the t&c's it would then deem the debt unenforceable therefore they would have to remove the default. Am i correct with this?

 

I didn't want to go down this unlawful dept route as we're happy to honor the debt but i feel this is the only option.

 

Thanks

Rich

[InformedSearcher]

Yeh she changed over to a halifax account, the account wasn't touched for 3 months and started paying the £50 pm when the cancelled the overdraft facility, this was continued for 8 months with 8 payments, they then closed the account with no letter and only found out when she went into branch to pay in additional money (the branch also could not find out why the account was closed which to me if they dont know why the account was closed how have they informed us?)

 

Thanks

 

Okay so they contacted you (I bet) by letter? The contents of that letter probably hold the clue. Hecule Poirot would be impressed by me. LOL So for 3 months that would have probably produced 3 months overdue, maybe two actually. Normally current accounts being closed but always open to receiving payments in as banks dislike refusing money. So with the agreement for repayment means unless you pay it in full (as an overdraft is repayable in full on demand) it's going to clock up on the DCA's as missed.

 

I'd suggest in the first instance whilst waiting for the SAR is to call (and record maybe using Skype/Pamela if nothing else) Metropolitan. Explain you are shocked and especially regarding the default notice and what are they prepared to do about it. Bank accounts especially when they move to collections are dealt with fully by central operations. I bet your branch Manager has a note that it was removed from the system but he'd not be the one calling or sending anything to you. It might be an idea to search out the letter you got when the overdraft was started.

 

Branches tend to work with limited scope on fully operational accounts that are in good standing. In the same way when you open an account you might open it centrally and they'll allocate a local branch to communicate with. These days they do not make any decisions but log into their terminal and get 'data/yes/no' from it. A branch is not autonimal as they once where years ago. Personally I do everything on the net and only my loan required me to sign at the branch so in 5 years I've visited the place (5 mins walk away) maybe twice. Business deposits and student accounts are the mainstay of the average branch plus foreign currency.

 

Michael

[InformedSearcher]

Thanks again can i ask why you suggest the S.A.R over the link i posted above?

If i cant get the signed credit agreement with the t&c's it would then deem the debt unenforceable therefore they would have to remove the default. Am i correct with this?

 

I didn't want to go down this unlawful dept route as we're happy to honor the debt but i feel this is the only option.

 

Thanks

Rich

 

The SAR is to get all the data they have on you, nothing more and nothing less - it's purely information. You need everything so as to work out your next (if any) move. It might be prudent to send £2 to each CRA or do it on line for their data on you. You had a variable overdraft and not a credit agreement per se. An overdraft that can be closed and repayable in full. It's the letter that comes with it (or days later) that tells you everything.

 

In prospective, you ask the bank for an overdraft - that means possibly a credit check to calculate the risk. They say yes/no and agree with you a maximum amount you can draw to. It's not a fixed loan but a standby (variable lending) and comes with a higher APR than normal. You get a letter telling you how long it will last (till review). Within the T&C's of the current account you will see a clause about overdrafts.

 

We move on to the blips on the account. Bank advises you they are withdrawing it and expect it repaid in full. You ask a reason and they will tell you - have you done that? Overdrafts are not a right and can be repaid in full on demand. If they ended it mid term then it means in all probability that they considered you did not manage the account correctly and the risk has become high. I just have to ask, surely you did not think that an overdraft was something you could 'just have' and possibly have failed to keep it in good standing meant you had some claim the bank was wholly to blame for it?

 

If you get you credit file (dependant on which CRA) you'll now see Halifax will probably have a current account entry on it. Current accounts are both good standing information and assessed for credit and identity. On mine when I went overdrawn it showed as 1 month in arrears and so on even though I had zero limit overdraft because I mismanaged my account.

 

Hope this clarifies stuff?

 

Michael

[richypat07]

My partner has just received a statement from halifax to say her credit card limit has been increased.

 

Surely they would do a credit check prior to a limit increase??

Is this normal when a default is active?

 

Thanks

[InformedSearcher]

My partner has just received a statement from halifax to say her credit card limit has been increased.

 

Surely they would do a credit check prior to a limit increase??

Is this normal when a default is active?

 

Thanks

 

Not at all. They look how the account operates and in this computer orientated age all is done by their systems. If the default was with another company (and of course you opened yours with Halifax prior to the default) it would not 'impact' at all. OTOH if you (as you did) apply for a mortgage then that's extirely different and CRA checks are done automatically.

Michael

[richypat07]

Hi just been reading up on other threads and it seems You can't CCA for an overdraft??

 

Is this right? if so what would requesting a SAR achieve for my disputing the deafault on an overdraft account?

 

Many thanks

[InformedSearcher]

Hi just been reading up on other threads and it seems You can't CCA for an overdraft??

 

Is this right? if so what would requesting a SAR achieve for my disputing the deafault on an overdraft account?

 

Many thanks

 

It costs £10 for the SAR. Click on the highlighted bit and all will be revealed.The SAR will show you all details held and a further look round will show templates and the rest. In other words for a tenner you get 'everything' (if possible) you request. There's no loan agreement for an overdraft anyhow. They have 40 days to provide you with the information. Personally I think you are on a upward struggle to prove HSBC defaulted you wrongly and anyway your potential mortgage lender does have discretion in making their own decision on anything.

This link might sum up about a CCA request (which I'd suggest is not what you want to do) unless with a DCA: http://www.consumeractiongroup.co.uk/forum/barclays-bank/101681-cca-request-barclays-overdraft.html

 

Michael