mental health and hsbc debt

[dobiedogs]

Hello,

I am hoping that someone may be able to help with this problem concerning my daughter who is disabled and suffering from mental health problems.

 

When she was 17 (now 20) she opened an account with HSBC, just a basic one with a debit card to have her benefits paid in. To start with no problem, however when her 18th birthday approached the bank started sending her promotional leaflets and offers of overdraft facilities and credit cards etc.

 

They upgraded her account, gave her a cheque book, debit card, overdraft and a credit card. I personally went to the bank because she used the same branch as me and begged them not to do it. Account and debit card was fine but not the rest because i knew she would never cope with them and I had spent months showing her how to budget when she finally got her own place.

 

3 times I saw the personal banker and they really just shrugged their shoulders and said because she was 18 now it was nothing to do with me at all and she could do what she wanted. I even put my concerns in writing to them which they just ignored.

 

To cut a long story short, she ended up in debt to the bank basically because she really couldn't manage the concept of paying on the correct day if her benefits didn't fall on the day that repayments were due.

 

I went to the bank again and tried to explain because they had started to take all of her money, but they didn't want to know because it wasn't my account. I got her to telephone them and before I knew it, they had given her a loan to cover what she owed but they also extended her overdraft and left her card in place.

 

The same thing happened again and when I looked through some of her statements she had charges for being overdrawn and card misuse etc.

When they again started keeping her benefits (she went 3 weeks without any money at all) despite a letter stating right of appropriation. I made her change accounts and asked for time to pay for her.

 

I have just begun the process of claiming all the charges etc back for her because I would say that these represent 80-85% of the original debt, but they have continually refused to accept the offer of payment of £10 per month that she has made and demanded immediate payment and closed her accounts.

 

The cheeky so and so's then asked me to cover it to which I pointed out that when I tried to warn them that she would not be capable of handling credit cards etc they ignored and told them it was nothing to do with me.

 

Now she has dca's chasing her and the debt continues to increase but the dca's keep changing and it is making her really ill all for £1,500 and she has actually had someone knock on the door and ask for the money, which terrified her.

 

I'm just so annoyed at the bank because if they had listened to me this wouldn't have happened.

 

So I have Sar'd the bank for her, do I now CCA the dca or the bank. Sorry for the length of this sorry tale, but any advice would be gratefully received.

[powelll]

CCA whoever is chasing so if passed to DCA do it to them. You may also want to speak to National Debtline on 0808 808 4000 for free confidential independent advice.. I would certainly consider putting in a complaint about the bank / staff's behaviour as well - Financial Ombudman Service a good route as the bank will be charged for this whatever the outcome.

 

You do need to have evidence that you have followed the banks' complaints procedure first though so I would be inclined to fire off a letter to the chief exec by name ( should be able to Google it ) keep a copy send recorded delivery.

 

Bit of a side issue to the charges / debt side of things but they have acted appallingly and a complaint may help you to feel better as well!

 

Best of luck

[dobiedogs]

Thanks for that I will make a complaint as you suggested and will also cca the dca.

 

I have kept copies of letters sent to the bank and my daughters mental health worker also contacted the bank and spoke to them as well as she was appaled at what they were doing.

 

With reference to the charges that is basically for the current account and overdraft as over a short period of time it really added up. The loan she had they refused the offer of £10 per month and insisted on much more which she couldn't afford.

 

Anyway I will keep trying!

[rory32]

You may also wish to quote section 13.1 of the banking code in your complaint.

 

13.1 "before we lend you any money or increase your overdraft, or other borrowing, we will assess whether we feel you will be able to repay it"

 

Unfortunately the banking code does not really cover mental health issues at the moment (I wonder why ) although groups like The Money Advice Liaison Trust are pushing for specific lending guidelines in the financial industry with regards to mental health.

[powelll]

You may also wish to quote section 13.1 of the banking code in your complaint.

 

13.1 "before we lend you any money or increase your overdraft, or other borrowing, we will assess whether we feel you will be able to repay it"

 

Unfortunately the banking code does not really cover mental health issues at the moment (I wonder why ) although groups like The Money Advice Liaison Trust are pushing for specific lending guidelines in the financial industry with regards to mental health.

 

Good point Rory. As a debt counsellor I speak to so many people who struggle to get their head round my advice. It's not a stretch to see why so many of them have ended up in difficulty in the first place...

[rory32]

dobiedogs,

You may wish to amend this letter to your needs.

 

Dear Sir/Madam [YOUR NAME, SORT CODE, and ACCOUNT NUMBER]

 

I write regarding the application of the following penalty charges to my account: [iNSERT DETAILS of charges applied].

 

As you know the monies in my account derive from means tested benefits paid by DWP, and/or the CSA. This is confirmed from my bank statements, where they are clearly identified.

 

Accordingly, you have erred in law in levying such charges on exempt monies in my account contrary to The Social Security Act 1992 which for your information states as follows:

 

Social Security Administration Act 1992

Miscellaneous

Certain benefit to be inalienable **

 

187- Subject to the provisions of this Act, every assignment of, or charge on-

(a)benefit as defined in section 122 of the Contributions and Benefits Act;

(b)any income-related benefit; or

©child benefit,

and every agreement to assign or charge such benefit shall be void; and, on the bankruptcy of the beneficiary, such benefit shall not pass to any trustee or other person acting on behalf of his creditors.

 

Note * if you claim Working Tax Credit or Child Tax Credit the corresponding legislation is the Tax Credits Act 2006. Section 45 states then include this para in your letter of claim.

 

In addition I remind you that included in this exemption are the following

 

Tax Credits Act 2006. Section 45 states:

 

45.: Inalienability

(1) Every assignment of or charge on a tax credit, and every agreement to assign or charge a tax credit, is void; and, on the bankruptcy of the person entitled to a tax credit, the entitlement to the tax credit does not pass to any trustee or other person acting on behalf of his creditors

 

I would also respectfully remind you that all the said benefits are not the property of me, the Recipient, but of the State, and are provided by the State, for the Recipient and their Dependant's sole upkeep

 

Therefore in view of the foregoing and the fact that these benefits are my only/main source of income please refund, within 7 days from the above date, any and all such charges together with any interest applied.

 

 

Yours faithfully

[diddled]

3 questions

1. Is your daughter incapable by reason of mental disorder of managing her affairs?

2. Does your daughter have an attorney?

3. When you pleaded with the bank not to give her credit facilities did you inform the bank of her mental health problems. If so, did you confirm anything in writing

[diskmandave]

Does the Disability Discrimination Act have any uses here?

[dobiedogs]

Hi diddled

thank you for your questions

 

1) yes her mental health problems do stop her from managing her own affairs properly. she has periods when she seems quite capable but then the slightest upset and everything falls apart.

 

2) do you mean power of attorney? Until she reached 18 I managed everything for her and while I don't want to have to mollycoddle her all the time, I am trying, with medical help and other support to try and help her to be somewhat independent.

 

3) yes, the bank were made fully aware of her disability and mental health problems. This was made quite clear when I set up the original bank account when she was 17 to have her benefits paid in. It was also put on the computer and all her payments showed as either DWP or DLA. Also when when I realised that the bank was eating her money I went in and spoke to her personal banking manger and then did a letter of right of appropriation which I physically took into the bank.

[diddled]

Im thinking along the lines of capacity to contract.

 

I would ask the bank what procedure they follow or have in place in relation to customers who may not have or lose mental capacity.

 

The Banking Code Standards Board, whilst they will not look at individual complaints have recently been consulting on mental capacity issues. It may be worth giving them a ring.

[babybear39]

Hiya diddled ,

 

Watching this with interest as 2 of my serious illnesses are severe anxiety disorders...

 

Good luck and best wishes to you and your daughter for a positive outcome,

 

BB

[dobiedogs]

Hello all,

 

Diddled,

 

I understand now what you mean about 'capacity to contract' I have had a look at the new amendment to the latest mental health act where it states

 

"In general, a contract entered into by a person who lacks capacity to contract is voidable if the other person knew or must be taken to have known of the lack of capacity."

 

In this respect the bank certainly knew that my daughter had serious problems. I have fired off a letter of complaint to the bank refering to this, also their breach of the banking code and the fact that they took her benefits when they shouldn't have done. In the meantime I have SAR'd the bank and CCA'd the collection agencies as well.

 

I just hope that I can convince either the bank or the dcs to actually accept a sensible and affordable repayment on the loan and see how I get on with the charges.

 

Many thanks to all for the advice and support, I will let you know what responses we get, if any!

dobiedogs

[rory32]

If you don't get a positive response from the bank make a complaint to The Financial Ombudsman Service and Trading Standards.

[dobiedogs]

Hi Rory32,

 

yes I will, I will be making an appointment at the TS next week, the lady I spoke to on the phone seemed quite concerned about what had happened.

 

I will also look into the financial ombudsman route as well.

[maggieboo]

Hi dobiedogs

 

I can't offer any suggestions, but I just wanted to wish you luck and hope you get everything sorted out.

 

maggieboo

[diddled]

dobiedogs

I wish you well on this.

Mental capacity law can be quite complex. Whilst banks and financial institutions ought to have procedures in place to deal with these sort of circumstances it is an area that is often not understood and often overlooked.

Whilst most solicitors I have spoken to are keyed up on bog standard stuff, their knowledge of mental capacity issues has been zero.

Do you have, or can you obtain any medical evidence to support your daughters illness?

[Drexl Spivey]

I wonder if the local press might be interested. In the light of banks fleecing us with illegal charges , now taking advantage of the disabled .. Im sure the bank wouldn't like that kind of publicity . Might convince them to a little more 'sympathetic' to your claim .

[tomterm8]

If it ever comes to court I would consider using the extortionate credit section of the CCA 1974 to its fullest... to engage in charging someone unlawful penalty charges, whom the bank knew had mental health problems and whose sole source of income was benefits after the bank was informed by the mother that the claimant would be unable to cope with any credit at the time the account was opened, and then engage in a campaign of harassment and intimimidation (you are keeping a log of all phone calls and recording them, aren't you? Yep, it is legal to record phone calls without informing the other party) is going to rile a judge up so fast he'll tear them to pieces.

[sequenci]

would you say the lender knew about your daughter's health prior to them allowing her to take the credit?

[tomterm8]

would you say the lender knew about your daughter's health prior to them allowing her to take the credit?

 

They did; the mother put her concerns in writing and visited them on numerous occasions before credit was granted. They basically told her it was nothing to do with her.