Overdrawn charge not a fee but a service charge ?

[The Phantom]

Maybe someone can help me here. It is a bit complicated so I need to explain a bit : my husband and myself opened recently a HSBC account (is it called a parachute account ??) because our Nat West Account was so overdrawn due to a staggering £728.- in charges that they were bouncing our mortgage payments etc and applying more and more charges. So we opened a joint HSBC account and moved all direct debits etc there plus our wages were paid in there. So far so good.

Now after taking some legal advice my husband was advised to declare himself bankrupt due his amount of personal debt. This happened on the 2nd of october. I am however not bankrupt.

THE OR (Official Receiver) told my husband to advise HSBC of his bankrupcy status which he did. The Receiver issued a letter to HSBC advising them that he had no interest in my husbands money in the account and to please let him use it in a normal manner. However, despite this, 24 hrs after being advised my husband has been declared bankrupt HSBC froze our account, disabled our online banking facility and stopped our cards. Being the beginning of the month our wages have been paid in but HSBC advised my husband they will not honour any of our direct debits etc and not let him take out any money.

But the thng is - nor will they let me ! I am not bankrupt, have money in the account and have yet no access to it. We have no money whatsoever now as we cannot access it

THE OR said HSBC's attitude is unusual but it is their business between us and them and nothing to do with him.

We have two children , bills to pay and no money

Well, we have, but it is frozen in a joint account where one account holder has been declared bankrupt.

Is there anything we can do ? I may need to see Social Security tomorrow to get an emergency loan or something. I just don't know what to do.

Can anybody advise how to proceed ?

[The Phantom]

PS: I think I need to add that HSBC is not a creditor of my husband, apart from this basic account which has always been in credit we have never had any dealings with them

They just said there is now an insolvency lock on it and that's it.

[bearo]

what???????? that sounds outrageous!! Talking about kicking you when you are down, if they are not a creditor why did they freeze it? Although if you are overdrawn that may explain it..but still... I wish I had some advice for you but I really don;t want to tell you something I am not 100% sure of, hopefully someone else will come along and be able to advise you on this....

 

Sorry to hear about this though....it makes me so angry!

[The Phantom]

Hi Shaz

 

no, we are not overdrawn on the HSBC account at all. We have both just been paid

There is money in there, most of it allocated to pay our bills. Nothing will get honoured, and we both can't get any money, despite the fact that I am not bankrupt at all and the rceiver told HSBC he has no interest in my husbands part of the money. He said we shall use it to live on. But we can't. It is frozen.

When we went to our brnach they said this is something that cannot be dealt with in branch, it will have to be referred to head office. Until then and until they have decided what to do we have no money whatsoever.

[jodyperry]

i'm afraid i have no advice but if your ringing the social i would try ringing citizens advice as well. I don't know but surely the money is legally yurs and they have no right stopping you accessing it?

[The Phantom]

Yes, sorry, I will go there too (CAB) - I didn't mention it.

My husband has already got a file there , so they can open one for me now

I will go to HSBC tomorrow first and ask them why they have frozen MY account (after all it is mine as well as his, being a JOINT account) (I am not bankrupt) and why they will not honour MY direct debits and the cheques I have written out in good faith. This is what grips me: at least 50% if not more of the money in that account is mine, but they are stopping me as well. If they had stopped HIS card, fair enough, but why mine ? I want them to explain that to me face to face.

Not all the money in that account is my husband's.

Once I have their explanation I will make the short journey to the Citizen Advice Bureau and ask what they suggest.

It may sound strange but I have only a few quid change in my purse and that's it. (either single bus trip down town OR about 2 hrs car parking down town, no more)

I have never been in that situation and I am a bit miffed to say the least

The thing is:

-HSBC is NOT a creditor of my husband

- the OR informed HSBC he has no interest in my husband's money in the account

- the account is (and always has been since we opened it) in good standing

DESPITE THIS

HSBC has stopped both our cards, froze all of our money and when approached by phone they say "it can only be dealt with In Branch", In the Branch they say it cannot be dealt with In Branch , but needs to be looked at by Head Office etc

In the meantime they are witholding the money and bouncing cheques and DDs although they would be covered by funds in the account

I am really keen to know if that is legal

[jodyperry]

i would go to the CAB first if i were you and arm yourself with a load of facts to go in with. good luck i'd love to know if what they ae doing is legal too. They have us believe that it is and we accept it cause they are a big bad bank but this site alone shows that they are breaking laws in so many ways and just hoping people believe them

[The Phantom]

I will post against this thread tomorrow evening again and let you know what happened (unless I am in prison for throttling someone)

I am no lawyer , but in my humble opinion they are in breach of contract towards at least me. Even if they don't want someone as an account holder who has been declared bankrupt, then they could have at least just removed his name from the account and let me run it just in my name. But they did not even enter into any talks or gave any warning, they just froze my money as well as his.

If they bounce MY direct debits and MY cheques although they would have been covered, I wonder if I could hold HSBC responsible for consequential losses and fines incurred by their actions ?

[stephie]

I'm pretty sure that you can have your husbands name taken off the account, which would then have any insolvency 'locks' taken off as your not bankrupt. Even people who are bankrupt though are entitled to be able to feed their children and pay living expenses. If i was you, i'd take a copy of the letter saying that the OR has no interest in the money in the account, and demand to speak to the branch manager, you need a proper explanation as to why HSBC have done this, get a letter from them if you can with their explanations.

If you have incurred fines from non payment of things, you can certainly hold HSBC responsible, and liable for them, if their explanations are not in line with bankruptcy procedures. Don't wait for an appointment, go into your branch and tell them it is a matter of urgency. Good Luck!

[The Phantom]

Hi

 

I have just come back and spoke to someone for a while in my branch

They have said my money is frozen as well because it is a joint account, but they were willing to open a separate account for me in my name only and transfer funds from the frozen one into it. So they have done all the prelim straight away, once my husband is home from work we need to go back and close the joint one officially, that will enable them to transfer the funds into the new one which is in only my name. But I still got no money at this moment , have now only enough left in my pocket to pay for the car park downtown once more and that clears me out.

I thought it was not right what they are doing, but if they just refuse to access your money, what can you do ? My husband already showed them the letter of the official receiver yesterday (he got a copy from the receiver, as the original was posted to HSBC already) They confirmed they had already seen the letter but refused to take the lock off. That was all yesterday. Apparently their head office needs to see not only the receiver's letter but all bankruptcy documentation (originals) and all of my husband's file from the receiver before they could make a decision. Until that time they would not allow any access to the money !! And that despite our bank account currently being about £1500.- in credit and HSBC not being one of my husband's creditors. They have no actual interest in our money and neither has the receiver. But it really makes you feel very powerless.

[The Phantom]

Hi there

 

quick one for the HSBC fan club. I have noticed that HSBC now call their fee for going overdrawn an "informal overdraft request arrangement fee" or something to that effect.

Apparently it is now not a penalty charge but a service charge ?

They say when you go overdrawn you are making an informal request to HSBC for an overdraft , for this they charge to arrange it. (They charge every time you go overdrawn, as it is considered a new "informal request".)

Now that they call it a service fee, can it be inlcuded in a request for refund of charges or not ?

Has anybody re-claimed this "service" fee or not ? Would be interesting to know.

[Advoc8]

Different name for the same thing. Should still be claimable as it's the nature of the charge not the name that counts.

[lateralus]

advoc8, got any literature on the arrangement fee - i asked the mods to add it to the charge descriptions as reclaimable and they asked to see something on it - i'm not a customer. anything you could scan and send me?

[Bookworm]

If it looks like a dog, barks like a dog, bites like a dog....

 

Please note this quote from the FOS in todays' Mail:

 

Banks' secret blitz on overdraft claims | the Mail on Sunday

 

 

A spokesman for the Financial Ombudsman said: 'No one has actually defined in court what these charges currently are.

'In general the names are not important - it is what the charges do. We have said in the past that you can't use language to change the actual function of that charge.'

 

Hope that answers your query. ;-)

[The Phantom]

Hi Bookworm

 

many thanks - I was unsure as they actually phoned me the other day and said "your informal overdraft request has been approved" (I went overdrawn, shame on me). So I was worried that they now call it a service fee and ...hmm..provide a service by phoning you , they can use that to defend these charges. It just used to be all automated, go overdrawn, computer adds charge and on you go. Now they phone you and tell you your request has been approved, so they may be saying, well , it is a service we provide, it is not automated and the phone call costs £25.- (each time)

But I suppose the more I think about it, the more it appears to be the proverbial woolly hat ?

The lady also told me that any other payment requests made against the account whilst overdrawn MAY be returned or MAY not be returned, but in any case further charges would apply. I at that point jumped in and informed her that I would be reclaiming all charges that in my opinion were not a true reflection of their costs incurred and advised her to be very conservative in the charges approach towards my account as I was fully aware of the publicity around unfair bank charges and what to do about it. She was then quite keen to end the phone call. I wonder why.

[ladybird17]

I've put these "service charges" on my HSBC claim. Same meat, different gravy. Afraid I cannot see how they can breakdown & justify why it should cost them 25 (sorry I'm in Canada & this PC doesn't have a pounds key!) when I go a few pounds over my limit. Let them convince a judge it's not a penalty.

[The Phantom]

Hi Ladybird

Many thanks for your reply !

I thought so much, but wanted to make sure.

It puts me back on the right track here.

[Advoc8]

I would still say that the charge would be unfair under the UTCCR - I say it would be arguable that regardless of its name it is a fee of a type exemplified by sch2(1)(e) (disproportionate).

 

The legal authorities from Dunlop tyre onwards state that it is the nature of the charge not its name that determines whether it is a penalty or not. For copyright reasons I'm loath to paste in the extract from Halsbury's Laws about how you distinguish liquidated damages from penalties but it's at paragraph 1066 of volume 12(1) if anyone has access to it and it supports the argument that this is still just a penalty charge and that the name is not relevant.

[victimjode]

Hi

Im not sure if we're talking abouth the same charge issue............I have just received a letter of offer, which is £300 short of my claim, however there is a paragraph saying

'When you contacted us to arrange a temporary overdraft limit you were advised of the fee for the service and it was accepted by you at the time. We have therefore deducted £100 from the amount of your claim'

I am doing this for my daughter, but she cant remember being advised of anything (although it may be the case?)

On the schedule there are charges listed on the statements as 'Overdraft fee' at £25 a time. Is the the charge you are talking of.

Its really thrown me, as i dont know if i should remove these entries from my schedule and reduce my claim by £100.

There are entries for Overdraft fee, and excess overdraft fee, every month.

Can anyone say if i can claim both or i have to reduce my claim.

Im reluctant to proceed with the claim without being sure.

Thanks

[The Phantom]

Well, if you read the link Bookworm has posted (a few posts above) of the Mail newspaper, you will see that HSBC has changed the name of the overdraft fee to "informal overdraft request arrangement fee" .They now say by going overdrawn you are making a request for an overdraft which they then accept and charge you £25.- for arranging it. The thing is, they do this for each time you go overdrawn in one month, as they treat it as a new request by the customer.

To somehow conceal it as a service they phone you (well they phoned me) to tell me "my informal request for an overdraft had been accepted" and tell you they will charge you for this at the end of the month

Maybe they consider this acceptance or something ? I told the lady from HSBC that I would be reclaiming everything that appeared to be disproportionate, so I am pretty sure I did not agree to this, so I am waiting to see what shows at the end of the month on my statement.

I was overdrawn for a weekend , it was cleared again the Monday and I am back in credit, so I will see what they do.

It may be the same in your case. Did they phone your daughter and tell her she would be charged for her informal overdraft request ? I would in any case not drop the £100.- and ask to see evidence of the acceptance of the charges, i.e. ask them to see where your daughter signed to say she accepted these charges. (And remember: just because it is or may be in their terms and conditions doesn't make it legal, so that is not a reason in any case. (just in case they refer to their terms and conditions.))

Or just ignore it and pursue for the whole amount, they can always show a judge evidence of the fairness of their charges and proof that your daughter accepted them. Which of course they do not want to do anyway, so they may still settle for the entire amount if you persevere.

If you are claiming you are driving the issue, so you dictate. If you are happy to drop the £100.- fine, if not, just push it.

[squeakywheel]

Yes indeed, since December 2006 HSBC changed their terms & conditions so that when you go over your overdraft limit you are making an unoffial request for an O/D which they state "may" incur a charge. When they charged me £118 for the pleasure of going over my limit in December I phoned to ask what this "arrangement fee" (as stated on monthly statement) was for & how it was calculated. I was told that it totalled the amount I had gone over my OD limit by. Same thing happened again last month & I got £50 in "arrangement fees" slapped on.

On both occasions the figures don't add up - in fact if what i was told is corect they should have charged me MORE!! Should I be grateful for small mercies???

It seems they are plucking arbitrary figures out of the air - there is no formula to it & therefore no way I can calculate what my charges are going to be.

I've only just started looking into this whole thing so haven't done the reading yet. So far I've only had £168 taken (did I say only!!) which is small fry in comparison to some but I'd still like my money back. Not sure if the same litigation applies so should I be questioning this from a different angle?

Also, use of the word "may" in terms & conditions implies a "may not" no? If they are definitely going to charge every time, how can these terms be upheld?

[The Phantom]

You are right. When the HSBC phoned me they also said I MAY incur a charge and MAY incur further charges if direct debits and cheques are returned. So looking at what you are saying there may not be a clear line to it anymore and they really make it up now as they go along. I don't know how they can justify this system any more than the previous charging system. I would definitely try to re-claim it along the same lines as all other charges outlined here on the website, because if you read through the thread here it would appear the name of the charge makes no difference and it should still be re-claimable.

I also do not see how they can arrive at a figure of £118.- in your case. If you go overdrawn you "may" get charged £25.- on each occasion, so the total charge at the end of the month must be a multiple of 25 and although I am not a maths guru , i know 118 is not. Unless you went overdrawn four times and 18 is interest or something, but they must be able to split it down for you surely ?

[The Phantom]

Hi - just had a letter through informing me they will be charging me £25.- for going overdrawn that week-end as described above and they are calling it an arrangement fee

I just spoke to them on the phone and they won't refund, so will have to start

the normal procedures for £25.- but to me that's a lot of money

Initial letter will be sent today asking them to refer from debiting my account with it (apparently it will be on the 19.04. or just after that) and then we will go through the usual procedures

[The Phantom]

They have replied saying they will look into my complaint, have in the meantime taken the money out of my account anyway

If I proceed to take them to court over £25.- I was wondering how likely are they to close my account ? I have read a few posts to show that HSBC does tend to do that, but I don't know for what amounts in dispute.:-|

[nettyg]

they don't usually close your account after a first claim but if they do, you should write a letter of complaint to the FOS. they're not to happy about banks taking retaliatory action and closing accounts and sometimes they are paying out compensation to customers who have had their accounts closed (i've heard £200 in some cases).

 

do you have internet banking? just a thought. i complained about charges (for a second claim) via email on internet banking and sent a letter to heidi daniels telling her that i would be claiming my charges back. i won after sending her my own version of a lba, before i had to take it to court. as your claim is for £25 i'd try getting it back that way, before issuing a claim in court. - just a thought!!