Bank Bloopers - HSBC CCA response - what's next?

[manchestman]

Wish you luck CC. I'm in somewhat similar situation but further down the line and have a court summons from HFC in my possession. Anyway, suscribing and supporting.

[johnnymitch]

HI CC

 

Also, does anyone have an opinion as to whether the Financial Ombudsman Service could declare the debt unenforceable?

 

It's the law (the Consumer Credit Act) that declares the debt unenforceable , not the FOS (or Southend -on-Sea for that matter:rolleyes:) ...... if they don't have or can't produce a copy of the agreement then it's unenforceable ......simple as that ............

 

But I agree with pete (#47) that you need to move your funds out of their reach , or by the 'Rights of Set-off ' rule they will have 'em ..........

[creditcruncha]

Thanks guys. They've now started/attempted barrages of phone harassment including sometimes two calls in the same hour (as if I would change my mind/position within 60 minutes, when they have nothing new to add). Clearly it is for purposes of harassment.

 

They say they've stated their final position on the matter (though they have not directly addressed most issues raised) and they are threatening to issue a default while claiming that they do not consider the account in dispute; ie, they dispute that it's in dispute. They say they will not add anything further. Very uncooperative and I would say further contributing to unfair conduct, where they completely ignore legitimate points raised as if they do not exist.

 

What do I do when their threatened default notice is issued?

[creditcruncha]

Does a Default Notice have to be in writing or can it be by phone?

 

Bank phoned and said they are issuing a DN and that if my contentions regarding the dispute turn out to be valid I will get back any charges.

 

I asserted the DN will be invalid as the account is in dispute and they respnded 'if we stopped issuing default notices while an account is in dispute then everyone would just declare dispute and nobody would pay.'

 

So it seems HSBC sometimes uses Default Notices as a speculative device to 'have a go' at bullying people into paying a disputed debt.

[johnnymitch]

Hi CC ,

 

a Default Notice cannot be issued by phone ........ there are strict rules for the issue of a DN and if they do not follow these to the letter then the DN is invalid . This Link may help :

 

http://www.consumeractiongroup.co.uk/forum/general-debt-issues/179944-default-notice-period-7-a.html#post1940698

 

Don't give 'em an inch CC ......

[creditcruncha]

Hi CC ,

 

a Default Notice cannot be issued by phone ........ there are strict rules for the issue of a DN and if they do not follow these to the letter then the DN is invalid . This Link may help :

 

http://www.consumeractiongroup.co.uk/forum/general-debt-issues/179944-default-notice-period-7-a.html#post1940698

 

Don't give 'em an inch CC ......

 

Thanks Johnny! In any case isn't it an invalid DN if issued while the account is in dispute?

[johnnymitch]

Thanks Johnny! In any case isn't it an invalid DN if issued while the account is in dispute?

 

Well , it's supposed to be,CC ... but that doesn't stop the beggars from Defaulting you to a CRA ........ and it's a beggar to get it reversed !

 

IMHO , it's defamation of character ,i.e they are telling lies about you to a CRA , but nobody does anything about it !

Edited June 5, 2010 by johnnymitch

[creditcruncha]

Thanks Johnny.

Also a breach of the DPA as no signed agreement means no consent to processing my info on that account? Is it appropriate to complain to Office of Information Commissioner?

[creditcruncha]

OK so if a credit card account is in dispute and no payments are being made on it, and the account holder has a curren account with overdraft at the same bank that, how can the consumer pay off and cancel the overdraft facility in such a way that the bank can not do a set-off against the overdraft and bring the overdraft back to its maximum?

[johnnymitch]

Because under 'Rights of Set-off they're not allowed to put an account in the red to satisfy the balance on another one ........... they can ony take from an account which is in credit ........

 

Right of set-off ...............

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/40/40_setoff.htm

(courtesy of vint54) (slightly amended by me ......... )

They are allowed to take regular payments or offset a defaulted loan, from a credit balance only.

If they did, you'd need to write to them, insisting that they return your account balance to zero as you had left it. Remind them that the terms of ‘set off’ only allow them to dip into a CREDIT balance - NOT create an overdraft, even if the overdraft is an agreed one.

[johnnymitch]

Because under 'Rights of Set-off they're not allowed to put an account in the red to satisfy the balance on another one ........... they can ony take from an account which is in credit ........

 

Right of set-off ...............

 

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/40/40_setoff.htm

(courtesy of vint54) (slightly amended by me ......... )

They are allowed to take regular payments or offset a defaulted loan, from a credit balance only.

If they did, you'd need to write to them, insisting that they return your account balance to zero as you had left it. Remind them that the terms of ‘set off’ only allow them to dip into a CREDIT balance - NOT create an overdraft, even if the overdraft is an agreed one.

[creditcruncha]

What if some of the overdraft facility not being used shows up as credit balance available on their statements?

[johnnymitch]

the terms of ‘set off’ only allow them to dip into a CREDIT balance - NOT create an overdraft, even if the overdraft is an agreed one.

 

They can't dip into an overdrawn account creditcruncha.......... they're not allowed to service one debt to the detriment of another .

[vint1954]

Creditcruncha,

 

As johnny says:

 

banking: firms' right of 'set off'

 

It is not unusual for a customer to have a current account, a savings account and a credit card account – all with the same bank or building society. The same customer might also have a loan, an ISA and a mortgage with that firm. And some of those accounts might be held jointly with someone else, usually a spouse or business partner.

In this article we look at what the firm can (or should) do where a customer does not have enough money in a particular account to make payments due from that account, but does have sufficient funds in one of their other accounts with the firm.

For example, when an overdraft facility on a current account runs out and the customer fails to pay the amount owed, can the firm take money from the customer’s savings account to reduce or clear the debt? Or, if a customer fails to make credit card or mortgage payments, should the firm use available funds from that customer’s current or savings account to make the missing payments, thereby helping the customer to avoid extra interest or charges?

The basic position is that a firm has a right – but not a duty – to look at a customer’s overall position and to ‘combine’ the accounts held by that customer. This is sometimes called a right of ‘set off’ or a right to ‘combine’ accounts. A firm has this as a general right, whether or not it mentions the right in the account terms. So, in the examples above, the firm can transfer money from an account that is in credit in order to make payments due on another account. But it does not have to do this.

Certain conditions must be met before the firm can exercise its right of ‘set off’.

The account from which the firm transfers funds must be held by the customer who owes the firm money.

The account from which the firm transfers the money – and the account from which the money would otherwise have come – must both be held with the same firm.

The account from which the firm transfers funds – and the account from which the money would otherwise have come – must both be held in the same capacity by the customer concerned. So, for example, if Mrs C holds a savings account in her capacity as treasurer of a local society, the firm cannot take money from that account to pay Mrs C’s personal credit card bill that she normally pays from the current account she holds in a personal capacity.

The debt must be due and payable. For example, if a customer misses making a loan payment, then (at least until it calls in the loan) the firm can take only the missed payment – not the balance of the loan.

We would not usually expect a firm to warn customers before it exercises its right of ‘set off’. A warning might prompt customers to move their money to an account with a different firm. But we think that it is usually good practice for a firm to tell a customer as soon as possible after it has made a transfer.

We would not generally expect a firm to use ‘set off’ before giving the customer a reasonable opportunity to pay the debt. However, what is ‘reasonable’ might depend on the customer and the history of the account.

The general position can be modified by agreement between the firm and its customer. This might include:

an agreement that ‘set off’ be available to a firm’s mortgage arm, where it is a separate legal entity;

an agreement to regularly ‘sweep’ any money over a certain balance out of a current account and into a savings account;

an agreement that money held by a customer in one capacity can be used to pay debts owed by the same customer in a different capacity.

[creditcruncha]

Thanks Johnny & Vint!

 

The consusion is in that the bank is presenting whatever overdraft amount remains available, and some paid-off loan amount, as a 'credit' balances. A) Are these still off-limits to the bank for set-off purposes?

 

B) On another matter, if a default notice was recieved demanding that an alleged overdue amount be paid by a date 14 days from the date on the notice - but the notice was physically delivered 2 days later - is it an invalid default notice? (notwithstanding that the bank had already confirmed it 'ended' the agreement). It appears to have been sent 1st class but the envelope has only a bulk postage permit imprint and no posting date.

 

C) If that default notice was recieved is there any response that should be sent in relation to it and does a response have to be within a particular period of time?

 

D) If the default notice is invalid are they able to reissue a valid notice?

[creditcruncha]

Bumping for responses to prevous post.

[creditcruncha]

Can anyone comment on question A, B, C & D above?

[manchestman]

Thanks Johnny & Vint!

 

The consusion is in that the bank is presenting whatever overdraft amount remains available, and some paid-off loan amount, as a 'credit' balances. A) Are these still off-limits to the bank for set-off purposes? Not sure

 

B) On another matter, if a default notice was recieved demanding that an alleged overdue amount be paid by a date 14 days from the date on the notice - but the notice was physically delivered 2 days later - is it an invalid default notice? (notwithstanding that the bank had already confirmed it 'ended' the agreement). It appears to have been sent 1st class but the envelope has only a bulk postage permit imprint and no posting date. From what I understand, for clarity, a DN has to have a specific named date by which you should rectify the breach otherwise termination may occur. That named date should give you 14 clear days before the named date to fix the breach. I would think that you have to assume that the DN was posted on the date given within the Notice and you are then allowed 2 days for the notice to be posted, served and received if sent by first class or 5 days if sent by second class. Though there has been debate about what the envelope markers mean, I don't personally understand them, but I do know that it is crucial to keep all envelopes. Any DN that states the breach should be rectified within 14 dates from the letter date has to be invalid (in my opinion).

Had the bank actually terminated your agreement or simply closed the account, (which is not the same thing)? Do you actually have a termination notice? If not, then I would be careful about assuming that termination has occured.

C) If that default notice was recieved is there any response that should be sent in relation to it and does a response have to be within a particular period of time? It all depends on whether they have acted and terminated your contract. You need a termination to occur to help your own cause. Again, there seems to be debate as to whether you should write accepting their rescission of the contract. I have written to my creditors on the back of faulty DNs and Vint has a great template letter to send. These posts by Diddydicky might illuminate a bit better: http://www.consumeractiongroup.co.uk/forum/showthread.php?196312-Invalid-Default-Notices&p=3123992&viewfull=1#post3123992 and http://www.consumeractiongroup.co.uk/forum/showthread.php?196312-Invalid-Default-Notices&p=3123970&viewfull=1#post3123970[/COLOUR]

 

D) If the default notice is invalid are they able to reissue a valid notice?

[COLOUR=red]I'm not sure here - I think that they can issue further default notices as long as they have not actually terminated. Once a TN is received, then they cannot issue another default notice. It all hinges on whether you have a termination notice.[/COLOUR]

Please do double check everything I have said here as I am a novice. The thread that the two posts above come from is incredibly long but very useful too if you can skim read

[manchestman]

It might be a good idea to scan and post DN then ask someone on the 'Invalid Default Notices' thread to pop along and check it out for you.

[creditcruncha]

If a CCA is in dispute when does the six year limitation period begin to run? At the point of a(n invalid) default notice, at the point of a notice of termination, or when? Also after an invalid default notice if you correspond witht he bank to answer a letter does each time you write them reset the clock?

Thanks guys and ladies!

[SteveH2508]

If a CCA is in dispute when does the six year limitation period begin to run? At the point of a(n invalid) default notice, at the point of a notice of termination, or when? Also after an invalid default notice if you correspond witht he bank to answer a letter does each time you write them reset the clock?

Thanks guys and ladies!

 

1. The date of last acknowledgement of the debt in writing by the debtor or

2. The date of the last payment towards the debt by the debtor.

 

When you correspond with them after you have put the account into dispute make sure that you state clearly at the top of your letter "I do not acknowledge any debt with your company or any associated companies or agents".

[creditcruncha]

Thanks steve! But what if you have other undisputed debts such as overdraft or loan and only the credit card is in dispute?

[SteveH2508]

"I do not acknowledge this debt with your company or any associated companies or agents" perhaps?

[creditcruncha]

Cheers mate!!

[creditcruncha]

Guys, two questions:

A) If a default notice is issued but is invalid becuase it does not give 14 days to pay, is it automatically invalid or do you have to actually write and state you accept their breach? If the latter, is there a period in which that has to be done?

B) If the bank has confirmed they no longer have the agreement, will they still try and have a go at court anyway or is it likely they will not go to court without it?