HSBC being ridiculous - what can I do about it?

mwddrwg · 6 November 2012 at 2:52PM

Hi,

Will try and keep this short!

I was a student between 1993 and 1997 and had an HSBC account which was overdrawn by around £1000 when I left. I used it for a while after but then stopped using it and consistently repaid amounts every month that were more than the initerest they charged to make sure the balance was coming down.

Fast forward to now and I get a demand letter for the full balance (about £600). I phoned them in June to give them my income/outgoing figures and they agreed to let me pay £20 a month and freeze the interest. All fine, but now they have started charging interest again. I have never missed a payment towards the balance. Today I phoned them again to give them my income figures (virtually the same as before) but now they are refusing to agree formally to let me pay £20 per month as they think I can only pay £8 per month. If I don't clear the balance in 30 days it will be referred to a collection agency which will trash my credit rating.

Can't get my head round the fact that they do not want me to pay more than they say I can afford! Seems very unfair of them to trash my rating through no fault of my own.

Do you have any advice on the next steps I can take to sort this out?

Many thanks

Geraint

CAB_Swansea_Bay_representative · 6 November 2012 at 3:09PM

Hi mwddrwg, thank you for your query regarding HSBC
Creditors will often request a review of your circumstances when you are in a informal repayment plan arrangement and you have done the right thing by going through your income and expenditure with them to see what you have available but they would be acting irresponsibly if, after doing that, they asked you to pay more then you have available each month. I am not sure why they will not accept the £8 per month but banks often have guidelines stating that an agreement must be to repay a minimum amount per month or they will send to a debt collection agency. I would suggest you put your income and expenditure in writing with an offer letter, you can find information and template letters at www.adviceguide.org.uk. If they still will not accept the offer and send it to a debt collection agency you can make the offer again to them and debt collection agencies often have more flexibility when accepting repayment plans. It should not adversely affect your credit rating by being passed to a debt collection agency but if you are not making the contractual repayments on a credit agreement they can issue you with an arrears notice or default notice at any time whether the account is with the bank or a debt collection agency and that will stay on your credit reference for 6 years.
Hope this is of assistance

maninthestreet · 6 November 2012 at 3:24PM

The debt may have been time-barred by the time HSBC contacted you earlier this year, but by making further payments you have acknowledged the debt.

mwddrwg · 6 November 2012 at 3:26PM

Thanks for your prompt reply. It's a relief to know that the referral to the debt collection agency will not in itself affect my credit rating. I have never refused to pay at all and have consistently complied with what they want, even paying more than they expect. I think I'll keep paying as I am and deal with the debt agency when it happens.

Thanks again!

mwddrwg · 6 November 2012 at 3:28PM

maninthestreet wrote: »

The debt may have been time-barred by the time HSBC contacted you earlier this year, but by making further payments you have acknowledged the debt.

Hi. I've always known about the debt as I've been reducing the balance (albeit slowly) since 1997. It's just now that they've started to demand full repayment instead of letting me repay it in my own time.

maninthestreet · 6 November 2012 at 4:03PM

£20 a month for 15 years is £1800 - what is the exact amount of the debt at the moment?

HSBC being ridiculous - what can I do about it?

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