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HSBC Overdraft

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Hi all,


I have another thread running regarding some loans that HSBC haven't produced the CCAs for yet. I stopped making repayments in September last year, having moved all of my current account stuff to Lloyds so they couldn't use the right of offset. This left an overdraft balance of around £450.


Predicatably, after a couple of months of no activity on the account they wrote to me demanding repayment. I was a bit annoyed because they sent the letter during the snowy period, so I didn't receive it until after some woman phoned me demanding immediate repayment!


After stalling for a bit, making complaints, etc. I sent them a CCA request in June and got this response back today:


Thank you for your recent letter dated 1 July 2010 which we received on 7 July 2010 concerning your request for copies of the signed credit agreement under section 78(77) of the Consumer Credit Act 1974. (The letter of 1/7/10 was a default notice I sent them due to non-compliance).


My understanding of your complaint is that you are disputing the balance on the account ending 8073 and feel the Bank has breached this Act by not sending the documentation requested within the required timescale.


Firstly, section 78 (77) of the Consumer Credit Act 1974 ("The Act") does not apply to current accounts. The current account is not regulated agreement because it provides no credit; section 78 (77) does not apply to the current account agreement. The overdraft agreement provides the credit and this sits seperately from the current account agreement.(Splitting hairs much? It was quite clear what I asked for!)


Secondly, credit agreements normally have to comply with Part V of the Act. Part V covers the form and contents of agreements, the signing of agreements and the duty to supply copies of the agreement as part of the process of making an agreement. Part V requires that the agreements be signed by both parties to the agreement and uses the concept of "unexecuted" and "executed" agreements to describe agreements before and after signature by both parties (the meaning of "executed agreement" is also explained in section 189 of the Act). (Thank you for the legal lecture. Which textbook did you cut and paste this from?)


However, by section 74(1)(b) of the Act current account overdrafts are given a specific exemption from the Part V formality requirements (this exemption only applies when the OFT grant a Determination under 74(3) and this was given for overdrafts on 21 December 1989, which means that overdraft agreements are not required to be signed by either party to the agreement and are not subject to being described as "unexecuted" or "executed" agreements under the Act.


Section 78(77) of the Act requires a creditor to provide a copy of the executed agreement, if any. For the reasons described above, there is no executed overdraft agreement and consequently no duty under section 78(77) to provide a copy of one.


Due to a Final Demand being issued on your account dated 7 June 2010, this required that the full balance was repaid within a given eighteen day timescale. As this was not adhered to the account was closed and sent to MCS on 7/7/2010.


We do not withhold action on accounts that are operating outside the agreed terms and conditions. As your account is being administered by MCS, you will need to contact them directly in relation applied to your credit report.


As stated in the Final Demand letter, should your account be passed to a Collections Agency, we will pass details of the default to Credit Reference Agencies (but, is MCS a Collections Agency as it is part of HSBC?)


--Bit about referral to FOS --


With respect to your comments regarding the Data Protection Act, you have my assurance that HSBC complies with all aspsects of the Act and this compliance is regularly monitored. Of course, you may wish challenge this in law, however, you should be aware that the Bank would vigorously defend its position and remains confident of a positive outcome. (This was the standard bit asking them to cease processing my data or contest this with reason within 21 days, otherwise said processing would be unlawful. They haven't complied with this, have they?)


Letter then concludes with usual stuff about who to write to next, etc.


So, where do I go next? I haven't yet taken any action under the DPA - maybe a complaint to the ICO about this and the other accounts that are clearly continuing to process my data despite my consent being withdrawn and this not being challenged by them. I suppose I might as well progress my complaint about the way the overdraft was removed etc. to the next level so I can refer to the FOS later. Any other advice though?

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