About to miss my first CC payment and what happens next

[Wooks001]

In a week or so I'm going to fail to pay my minimum payment on my credit card, and I have no prospect of making future payments in full if at all. Wish I'd never agreed to the damn thing.

 

Basically I recently ended up in major arrears with gas & electric and have had no choice but to come to an arrangement. To be honest they were quite good eventually, it will take me about 5 years to clear the arrears but payments have gone up hugely.

My bank however are unlikely to be as humane, I owe them approx 5K and no doubt they will want it back. The energy supplier no doubt will not be happy if I pay them anything, because as I understand it they have first call on any debts.

 

I'm on benefits and after paying bills, I'm now left with just over £30 a week for food and everything else.

 

Having read many topics on this forum, I've cancelled all DD etc on my current account, and am in the the process of transferring my benefits to another account which is not related to my current bank. Hopefully this should all take place in the next few days.

 

My question is basically should I contact the bank now or wait and see what happens.

Pretty sure DCA's will be involved very quickly and I'd like to reduce the harassment to a reasonable level.

 

Any advice please.

 

P.S. If I've posted in the wrong section apologies!!

[unclebulgaria67]

Sounds like you need more rounded debt advice.

 

In regard to the credit card, yes you should contact them to advise them of the situation. They may be able to offer a slight delay for you. If not I think what will happen is that when the minimum payment is not made, they will apply a late payment fee of £12 (this what some charge). You will then be asked to make payment within a period of time. If you then don't make payment, they will issue a default notice, your card will be suspended and your credit record will be noted about the default.

 

What type of bank debt ? Loan, overdraft ? What arrangement have you come to about this. You need to tell them of your exact position, as if you don't they will you with penalty rates of interest. If they know that you are out of work and struggling, they might suspend interest.

 

Gas & Electric. How did these arrears happen ? What advice did you take about these ? Depends on the situation, but sometimes, the energy companies can only charge arrears going back 12 months, if it is partly their fault.

 

Sometimes, when you are in a hole, you need to stop digging. Just tell the companies of your situation and take advice about each matter you are dealing with. Citizens Advice now have a telephone helpline, as well as branches.

[Wooks001]

Thanks for the reply,

 

I think the default and credit record are a given considering my situation, I don't have any other debt other than the credit card and those mentioned above.

With regard to gas and electric part my fault and part theirs to be honest. When I moved to my current address I'd no idea what the payments should be so I asked them for an estimate, and then didn't pay much attention to the problem to be honest (on-line billing).

For about 5 years I'd been on a scheme for those on a low income and then the scheme stopped, and payments about trebbled but my DD's didn't hence the arrears.

 

I'd be interested in information you can provide about the 12 month charge back on arrears, as it may make it possible for me to make a small payment to the bank.

[unclebulgaria67]

Have a read of this link.

 

http://www.energy-uk.org.uk/publication/finish/43-code-of-practice-for-accurate-bills/412-the-code-of-practice-for-accurate-bills-back-billing-for-domestic-customers.html

 

Definitely speak to the card people and the bank about your situation. If you don't they can't help you.

[Wooks001]

I've had a good read and there may be something in clause 7 but I'm not too hopeful about providing proof as it was all over the phone, and my memory isn't brilliant. It is however very good info for anyone in difficulties.

 

With regard to the bank etc, how can they help me, I can't pay and from what I've read they will be on me like a pack of wolves.

[citizenB]

Have a read of the following and then perhaps contact one of the agencies mentioned.

 

 

If you are experiencing difficulty in repaying your debts, CASHflow is a way for you to negotiate affordable repayments with your creditors. Before you can use CASHflow, you must have spoken to one of the free advice agencies licensed to offer CASHflow to their clients. The advice agency will start by talking to you about all of the options available, and can help you to decide if CASHflow is the right one for you.

 

If you decide to use CASHflow, you will be provided with all of the tools you need to be able to complete your own financial statement and negotiate offers of repayment with creditors yourself. This will enable you to stay in control of your situation, but still have support from an adviser at any stage if you need it.

 

You can contact a local advice agency to check if they offer CASHflow. You can find a list of free advice agencies that are near to you by searching for a money adviser in England or Wales, Scotland, or Northern Ireland.

Alternatively, you can call National Debtline on 0808 808 4000

CASHflow: http://www.cashflow.uk.net/

National Debtline: http://www.nationaldebtline.co.u k/

https://www.mymoneysteps.org/

Also as highlighted in the CAG newsletter...

There is the new CAB system that might also be worth a look, this system saves all your details, has guidance allowance figures to work with if you wish and you do not need to be invited / signed off etc with this system, just log in and away you go (see below)

 

(Also, there are a number of other self help tools and systems around so might be worth a little exploration if this is what you eventually decide on.)

 

http://mymoney.nedcab.org.uk/moneyadvice/

 

http://mymoney.nedcab.org.uk/moneyadvice/ (example of completed dmp)

 

 

Do you own your own home? If not, then there are likely to be quite a few options open to you to see you through this financial hiccup.

 

If your debts are below £15,000 and you dont own your own home or have any other assets then you might want to consider a Debt relief order - it is the 5th option on the NatDebt fact sheet below. You will almost certainly be released from any debts after one year. You would need to discuss this with National Debtline though.

 

 

http://www.nationaldebtline.co.uk/england_wales/page.php?page=35_options_for_dealing_with_your_debts

 

 

Priority expenditure and arrears on utility bills have first dibs on your income as you already know.

 

Which company is the credit card with?

[citizenB]

Once your new banking facilities have been set up, you will need to write to the bank and explain the situation.

 

It is advised that from this point onwards you keep all your communication with the bank in writing - although they will not like this one bit.

 

They will almost certainly say things on the telephone that they wouldnt dare put in writing and it is important that you have a proper record of what is being said in order for there to be no misunderstanding.

[Wooks001]

Thanks for the reply,

 

Bank is HSBC if it makes a difference in terms of their attitude.

I found another topic which gives their contact details, solicitors etc and have copied the relevant part, so I know who is likely to be contacting me.

Even though I have removed the telephone number on my account, no doubt they will have it somewhere else so I'll let the answering machine take the calls first. Like you say everything needs to be in writing.

 

I've had a look at the debt relief order and I don't like the bit about potential legal action for fraud etc.

I haven't knowingly done so but banks can be vindictive!!. Need to research this further.

 

I only got the card when I applied on-line for a small increase in my OD, same bloke rang me and asked if I had considered a CC, no application fees, lower interest rates etc. I eventually agreed to the application but requested a small credit limit which was ignored.

Obviously I've been an idiot and used the card for unexpected bills etc, but haven't gone out and bought a 50" TV or anything like that.

 

What I don't understand is why they gave me a huge limit knowing I was on benefits and had been so for years.

 

There is another complication, a while ago the bank rang me to say that my card had been used fraudulently and I should cut it up. A new card was issued, and they basically closed the old account (denying me on-line access) and despite numerous requests have failed to provide statements for the old account.

I'm all for saving paper etc, but the so called guarantee to hold account details on-line for 6 years isn't worth the paper it's written on.

A fair amount of the balance is down to me but I don't know how much, or how long this fraud has been going on.

I've given up on the overseas call centre, and the on-line messaging system which doesn't record my messages anyway only their responses.

Currently my complaints have been with their customer resolution team for a week, guess what no response.

[citizenB]

Did you sign a new application form ? Did you sign any application form?

 

If they transferred a balance from one account to the other when they claimed there was fraud action on your account.. then they are obliged to provide the statements from the old account in order to show how the balance has accrued.

 

It might be worth you sending a Subject Access Request in order to obtain ALL data that they hold on you. They have 40 calendar days to comply and it will cost you £10.00. You should send the request to their Head/registered office and they will pass it on to their Data controller.

 

It is best you do this as soon as you can - banks have a nasty habit of shredding information, especially as it approaches the 6 year mark and the more information you receive the better.

 

Although you are entitled to ALL data that is held in a recognised filing system - you should specifically request statements from inception and a copy of the communications log - it will be interesting to see what that fraud claim was all about.

[Old Cogger]

Once your new banking facilities have been set up, you will need to write to the bank and explain the situation.

 

It is advised that from this point onwards you keep all your communication with the bank in writing - although they will not like this one bit.

 

They will almost certainly say things on the telephone that they wouldnt dare put in writing and it is important that you have a proper record of what is being said in order for there to be no misunderstanding.

 

 

Fraud: - Wouldn!t be something to do with the HSBC Manager who is doing time for fraud I wonder??? what I heard rightly or wrongly one is??

 

http://www.thisiskent.co.uk/Manager-bank-pound-127-000-fraud-trial/story-14345041-detail/story.html

 

^^^^^^^^^^^ Above link is the article - the Manager was from Tunbridge Wells, Kent

Edited June 13, 2012 by citizenB
included link to fraud article

[citizenB]

Mike, I included a link to the article in your post

[Wooks001]

I'm not sure that I actually signed anything, the card was approved over the phone and I've found some paperwork to that effect. Need to do a bit more searching to find anything else.

 

With regard to the SAR I'm tempted to send a complaint first by email to customer relations advising them that unless they supply the information I'm entitled to I'll have no option but to make a SAR request, and expect them to do it at their expense. Something along the lines that they can have no legal reason for withholding the information since it is available via a SAR request anyway.

[citizenB]

Please, please keep that letter..... if there has been no signed agreement, then they will have mega problems were they to get nasty and attempt to litigate.

 

You have probably looked around the forum and discovered exactly what HSBC can be like.. so it is best to be as prepared as you can.

 

However, this is all irrelevant at this precise moment. Once you have advised HSBC of your financial hiccup, they might be perfectly reasonable and I certainly hope they are.

[Old Cogger]

Mike, I included a link to the article in your post

 

 

Thankyou CB appreciated.

[Wooks001]

Hi CB, I'm expecting the worst so if it's better then....

Don't expect anything nice though, with a 5K debt and a disposable income of £30.

Can't see how I can pay them anything.

 

I am searching the forum for info regarding HSBC and DG solicitors, but either get huge results or none.

If anyone knows of relevant topics, or the corrrect search terms, then I'd be very grateful if they could post them

[citizenB]

The following is an either/or situation..

 

You write to HSBC (make it their head office so it gets to the right department) explaining your situation and ask them to accept a token payment and freeze interest and not to apply default charges.

 

They say Yes no problem - all is well job done

 

They say No - After 3 missed payments they will issue you with a Default Notice, termination notice - pass you on to Metropolitan Collections, their inhouse collection agents and start trashing your credit files. No point in making Met Collect the same offer - they have access to all the information and will be aware of your situation. However, in order to keep a dialogue for your own protection. You should advise them of your recent communication with HSBC - that your situation has not suddenly changed because HSBC have let them loose on you. Your offer is and you would hope that they would accept..

 

They might set DG Solicitors on you your stance remains the same.

 

I am not aware of HSBC using 3rd party DCAs - however they could possibly assign/sell your account on to one of the Debt Purchasers who will proceed to hassle you - your stance remains the same, however I would think you could add to your first communication - that HSBC have knowingly sold an account on which they know there is a hardship situation - that if you are unable to offer the original creditor more than £1.00 token payment - then you certainly are not in a position to offer a 3rd party any more.

 

If it gets nastier than that, then you would need to let us know so that we can advise you further.

 

Your one weapon is going to be information.. the more you can obtain before they start shredding the better

 

HTH

[Wooks001]

Thanks CB,

 

I think I'll send my email and see what happens, if they respond then atleast I'll know what my actual debt is.

With regard to the token payment it will take decades to even make a dint on the debt, no doubt there will be regular demands for proof of income etc.

What happens if I tell them to get st**** and sue me. I don't care about my credit record, can I ask the county court to make a judgement which I can afford to comply with.

My understanding is that so long as you pay on time there are no other problems.

[citizenB]

If you dont own your own home and have no assets then there is little point in them hustling you.

 

Equally, there is little point in your making token payments if they are going to add charges and interest.

 

See what they have to say after you have advised them of your financial hiccup, play nice until they start getting nasty.

 

I would almost certainly want to avoid court if at all possible - but in the event it does end up at that point - yes, you would be able to point out that you had made the best offer you could in the circumstances (your Income & Expenditure sheet would show this). It is my understanding that the Judge would be unlikely to make an order that couldnt be met.

[Wooks001]

Well Folks,

 

Firstly thanks to everyone who has replied, the "fun" has begun.

The ******* who tried to use my card fraudently are .................so watch out for them, don't have any further details and I don't think I'm going to get them.

 

Have emailed the bank about the missing statements, and at the same time advised them that I can't pay.

Used letter C as a template, and attached inc & exp spreadsheet.

Gas & Electric arrears are horrendous, so it should be obvious that I am unable to pay.

 

Told them I am unable to discuss the matter over the telephone and asked for a reply by email.

 

Will also send something similar via the on-line message system.

 

Expecting phone calls soon, but I could be surprised and be contacted by email.

Funds are so tight that I don't want to be buying loads of stamps.

[unclebulgaria67]

1) The ******* who tried to use my card fraudulently are F--------s Internet so watch out for them, don't have any further details and I don't think I'm going to get them.

 

2) Gas & Electric arrears are horrendous, so it should be obvious that I am unable to pay.

 

3) Expecting phone calls soon, but I could be surprised and be contacted by email.

Funds are so tight that I don't want to be buying loads of stamps.

 

1) What is being done to prevent them trying again ? Have you signed up to a contract for this company to provide a service ? If not, report to action fraud which is the official way of reporting such matters. http://www.actionfraud.police.uk/report_fraud

 

2) Re Gas & Electric. Have you entered into a complaint yet re back billing to see if you can negotiate a reduction. This is worth doing, as I have heard of people having amounts deducted, depending on what had happened.

 

3) If you remain in contact by e-mail and they can see regular contact, there is no point them phoning you ? What would be the point ? You could say to them that you prefer contact by e-mail and/or normal post, as they may find it difficult to contact by phone, given the current situation.

[Wooks001]

1) Never heard of them never mind signed a contract etc. I don't know what is happening about preventing them doing it again, as the bank spotted the fraud not me and closed the account. A quick google though showed that they have tried it on with other people as well.

 

2) Not yet, want to see what happens with the CC first, stressed enough as it is.

 

3) My thoughts exactly. Have done exactly as you say, requested contact by email.

Gives me a bit of time to think and potentially seek advice before replying.

[Wooks001]

Well, I've had a response to my email:-

 

"At present, you are e-mailing us via our unauthenticated facility. This is secured, but our systems do not authenticate the user, preventing us from actioning or responding to any specific account related instructions or queries received this way."

Followed by a request to contact by telephone.

 

From reading other threads I'm fairly sure that section 25 of the Consumer Credit Act gives me the right to use email rather than the telephone, any ideas as to how should I respond please.

[AndyOrch]

section 25 of the Consumer Credit Act:???:

[Wooks001]

This is what I found via a link on the forum. I don't have the link to hand but..

 

Document is titled:-

 

'Debt collection'

OFT guidance for all businesses engaged in the recovery of consumer credit debts

July 2003 (updated November 2011)

 

k. ignoring or disregarding debtors' reasonable requests in respect of when, where and how to contact them

For example, shift workers may ask not to be telephoned during certain times of the day.

Also, some debtors may request contact by email rather than by telephone.

[citizenB]

This is what I found via a link on the forum. I don't have the link to hand but..

 

Document is titled:-

 

'Debt collection'

OFT guidance for all businesses engaged in the recovery of consumer credit debts

July 2003 (updated November 2011)

 

k. ignoring or disregarding debtors' reasonable requests in respect of when, where and how to contact them

For example, shift workers may ask not to be telephoned during certain times of the day.

Also, some debtors may request contact by email rather than by telephone.

 

 

You are correct, and andy has given you the section of the CCA that refers. Send them another email advising that it is your "legal" right to have all communication in writing as per Section 25 of the Consumer credit Act and the OFT Debt Collection Guidance.. quote the bit you have posted above.

 

This is to protect you in the event that litigation takes place.

 

If they continue to disregard your wishes not to discuss your finacial situation over the phone, then you will make a complaint to the OFT.