HSBC and managed loan woes.......

[redbryn1]

hi all i had a managed loan with hsbc but due to debt problems i had to consolidate it and my other debts into a DMP with payplan. the proposal that payplan came up with was £99 a month instead of the £160 i was paying to HSBC. I have now been paying this amount to the HSBC for 5 months and have been getting constant phone calls and letters from HSBC saying that they will not accept the £99 a month from payplan and want me to agree to another managed loan with them for you guessed it £99 only problem is the repayment term is 4 years longer than it would be with payplan (12years as opposed to 8 years) obviously this sounds as daft as it is and probably just to make more interest from me but is there any way i can sort this out as they are now threatning a default notice even though it says on their letters "all financial difficulties will be dealt with with understanding and sympathy!" any advice greatly appreciated.

[CCCS_Matthew]

Hi there,

 

Don't dispair, you are right in thinking that HSBC are simply trying to get you to commit to paying the debt over a longer period thus allowing them to gain more interest.

 

If you are issued a default notice it is not really going to cause you much of a problem, it simply allows HSBC to sell the debt on to another company such as a collection agency to take care of the debt. If that happens, I'm sure PayPlan will allow you to make payments to the collection agency. Collection agencies have no more legal power than HSBC, so I would strongly advise you not to entertain HSBC's offer!

 

Hope this helps,

 

CCCS

[sequenci]

Hi there,

 

Don't dispair, you are right in thinking that HSBC are simply trying to get you to commit to paying the debt over a longer period thus allowing them to gain more interest.

 

If you are issued a default notice it is not really going to cause you much of a problem, it simply allows HSBC to sell the debt on to another company such as a collection agency to take care of the debt.

 

A default effectively cancels the agreement and calls the remaining balance in, this would mean that the credtor would then be in a position to consider further recovery options (such as passing it on to a dca or taking court action themselves). ss87-89 of the CCA 74 cover defaults and their effect, bear in mind in order for them to be valid, they have to be in the correct prescribed format.

 

If you cannot meet the terms of the original agreement then the creditor does have a right to serve the notice although they do need to work in a reasonable way with you to try and arrive at a suitable repayment method.

 

Managed loans are pretty notorious, as matthew stated you may end up paying a great deal of interest. I feel a DMP would be a better bet as usually you would have your interest totally frozen, and by virtue, pay the debt off over a quicker period.

[ScarletPimpernel]

It's also worth noting that under the OFT guidelines on debt collection, HSBC should be dealing only with CCCS as your appointed representatives; contacting a debtor directly is considered an 'unfair practice'.

 

I'd be inclined to send HSBC a letter complaining about their breach of the OFT guidelines, and asking them to confirm that they will comply with their obligations in future. Unless their 'final response' states that they will do so (£1 to 1p it won't - it'll be full of waffle trying to justify why they think they can ignore the rules), escalate it to the FOS, since breaches of the OFT guidelines calls into question HSBC's fitness to hold a Consumer Credit Licence.

[sequenci]

ignore this post - i messed up and should have read the post again!

[powelll]

It's also worth noting that under the OFT guidelines on debt collection, HSBC should be dealing only with CCCS as your appointed representatives; contacting a debtor directly is considered an 'unfair practice'.

 

I'd be inclined to send HSBC a letter complaining about their breach of the OFT guidelines, and asking them to confirm that they will comply with their obligations in future. Unless their 'final response' states that they will do so (£1 to 1p it won't - it'll be full of waffle trying to justify why they think they can ignore the rules), escalate it to the FOS, since breaches of the OFT guidelines calls into question HSBC's fitness to hold a Consumer Credit Licence.

 

Spot on - I was just about to make this point myself!

[CCCS_Matthew]

Just wanted to mention that the orignal poster had mentioned she is using PayPlan rather than ourselves

[sequenci]

Just wanted to mention that the orignal poster had mentioned she is using PayPlan rather than ourselves

 

aha! got ya!

[redbryn1]

hi all just an update after more phone calls from HSBC (5-6 a day) i emailed my payplan case worker and was told to ignore their requests for me to take out another managed loan and to let them use a DCA to recover the debt in which case the payments i'm making to HSBC now would be acceptable to a DCA after all i'm paying £99 a month through payplan for 8 years and HSBC want £99 a month for 12 years so common sense prevails anyway during the last phonecall this evening I told the nice man to stop phoning me and to contact me by post in the future and i would be looking into making a complaint guess what? phone call 15 minutes later arrrrrghhhhhhhhh!!!! so i guess it's time to ask for their complaints procedure?

[redbryn1]

just a thought are HSBC breaking any guidelines as regards offering someone in financial difficulty another loan?