Bank Charges Financial Hardship Disussion

natweststaffmember

longhauladdict wrote: »

Hiya.

I am having problems with HSBC, I spoke to their Financial guidance team in July and they advised me that they didn't consider me to be in financial difficulty or hardship so therefore I would have to wait until the end of the test case.
I then recieved a letter from HSBC a week later advising that they recognised and accepted that I was in financial hardship, but that I had chosen not to compy with any of their suggestions.
I wrote back advising that there had been no suggestions made at all, and that one person had told me I was NOT in financial difficulty, but their letter stated that they accepted I was, and asking them to contact me to acknowledge this!
I had no response to this letter and wrote again, enclosing my complaint to the FOS, and advised that they had failed to respond to my earlier letter.

On Friday (last week) I spoke with HSBC regarding a managed loan to clear my overdraft (a large proportion of which was made up of bank charges £1300/£2000), and the guy on the phone said that there was a 'service failure' registered against my account, which was related to my complaint, and I would be recieving a letter in the next few days which would outline their investigation into this.
I then recieved a call from HSBC yesterday regarding my bank charges to tell me that they had reviewed it and would not be paying anything back until the end of the test case.

Where do I now go with this- HSBC are obviouly aware that they have acted unfairly by acknowledging a service failure, but can I send this onto the FOS or should I wait until they contact me?

Any advice gratefully recieved ...

Did you accept the managed loan?
A service complaint definition is any dissatisfaction whether justified or not.(Complaint basically since they did not discuss the issues with you originally).
The issue you will have to argue with the FOS if you said no to the managed loan is how this will not help you(I would argue additional borrowing is NOT the right thing when you are already struggling anyway).

Lamplighter

Hi

I have (had) banked with first direct since 1999, and we've had an up and down history as I've lurched between periods of debt and prosperity. However since being made redundant late last year, my income has been sporadic and my financial reserves have depleted over time.

Crunch came in June, when my agreed £1250 overdraft with the bank expired and was due to reduce to £250. I requested an extension (not an increase), which the bank declined citing lack of regular supporting income to fund the overdraft. Consequently the majority of my regular payments bounced, including the monthly payment to service my personal loan with the bank!

In a nutshell, the bank pressed me for a repayment solution, which I was unable to provide, so they withdrew banking facilities and issued a final demand (late September) for all monies owed by me to them (about 10.5k = 2.5k overdraft + 8k loan). They advised I have 28 days by law to respond before they register a default, of which I have about another two weeks to go.

I am under considerable financial pressure at the moment (= financial hardship) due not only to the bank's actions, but also to non-payment of an invoice owed to me and delayed receipt of benefits and a tax rebate, and consequently I'm in arrears with all creditors, including rent and council tax.

In the meantime, knowing about the bank charge issue and having read the article on this website, I contacted the bank to request a breakdown of charges (returns and unauthorised overdraft fees) since July 2001. I've since received this (note: they didn't charge me!) and they total an astonishing £7.2k, or if I add interest at simple 8% from each charge date, £9.4k.

Clearly I'm very keen to negotiate with them to offset the majority of the final demand against these charges. I could, say, offer a without-prejudice sum of £1100 (=10.5k owing - 9.4k charges) as a first attempt to settle the final demand in full.

Do esteemed readers here think this is a workable ploy? Are the bank likely to be interested? What should be my next move, to write and put this to them? Should I be concerned about the formalities of the Final Demand and possible Default whilst this is being processed?

Thanks in advance of any responses.

Lamp

bobsgirl

natweststaffmember wrote: »

Do you have priority debt arrears(mortgage.rent, council tax, utilities)?

Sure. Council tax debts from the time when bank charges started to be applied really heavily to my account. In addition, missed dd's on credit card at the time, and on ddrepyment of these lapsed agreements in the last couple of months. Have since returned to uni, hence huge drop in income. Basically, split with a partner a few years ago, and trappped in a downward cycle of debt (via bank charges) ever since. Have been through Halifax in order to try and reclaim, even got an admission that they agree I'm in hardship, but not willing to look at any renumerative action till settlement of lords case. Hence FOS route.

wisnaeme

Hey,

Had an offer in from HBOS for £315 but the total charges to-date is in the region of £5800. They have acknowledged that we are in financial hardship and I have copied you in on the actual letter sent to me a few posts up on this page.... thought might be useful for others to see. They believe charges were correct and if we are not happy to contact the Ombdsman!!! I am now going to call the bank to negiotate a higher amount. Is this a good idea??? Was thinking of asking for £3000 as this would pay off overdraft and outstanding creditors.

Any advice would be appreciated.

natweststaffmember

wisnaeme wrote: »

Hey,

Had an offer in from HBOS for £315 but the total charges to-date is in the region of £5800. They have acknowledged that we are in financial hardship and I have copied you in on the actual letter sent to me a few posts up on this page.... thought might be useful for others to see. They believe charges were correct and if we are not happy to contact the Ombdsman!!! I am now going to call the bank to negiotate a higher amount. Is this a good idea??? Was thinking of asking for £3000 as this would pay off overdraft and outstanding creditors.

Any advice would be appreciated.

Halifax are known to only refund charges once the account has gone into collections. I would be looking at the offer since at the moment if the only argument you have is the amount then it is doomed to failure. However, you need to look at the point the lifestyle event actually affected your ability to meet priority creditors(mortgage/rent, council tax, utilities) and add the charges up and then ask for that amount based upon your set of circumstances.

natweststaffmember

bobsgirl wrote: »

Sure. Council tax debts from the time when bank charges started to be applied really heavily to my account. In addition, missed dd's on credit card at the time, and on ddrepyment of these lapsed agreements in the last couple of months. Have since returned to uni, hence huge drop in income. Basically, split with a partner a few years ago, and trappped in a downward cycle of debt (via bank charges) ever since. Have been through Halifax in order to try and reclaim, even got an admission that they agree I'm in hardship, but not willing to look at any renumerative action till settlement of lords case. Hence FOS route.

The FOS are there to adjudicate if the bank looked at your case and so if you simply go their because the OFT test case issues(and the next decision is not about whether the charges ARE fair but whether they can be ASSESSED for fairness. There is a huge difference).
You have to argue lifestyle event ie separation of partner, full time educatioin lead to charges since there was a drop in income and lead to priority creditors(mortgage.rent, council tax utilities) being missed.

Was there any credit card charges because you can reclaim every single charge you have had on that account.

natweststaffmember

Lamplighter wrote: »

Hi

I have (had) banked with first direct since 1999, and we've had an up and down history as I've lurched between periods of debt and prosperity. However since being made redundant late last year, my income has been sporadic and my financial reserves have depleted over time.

Crunch came in June, when my agreed £1250 overdraft with the bank expired and was due to reduce to £250. I requested an extension (not an increase), which the bank declined citing lack of regular supporting income to fund the overdraft. Consequently the majority of my regular payments bounced, including the monthly payment to service my personal loan with the bank!

In a nutshell, the bank pressed me for a repayment solution, which I was unable to provide, so they withdrew banking facilities and issued a final demand (late September) for all monies owed by me to them (about 10.5k = 2.5k overdraft + 8k loan). They advised I have 28 days by law to respond before they register a default, of which I have about another two weeks to go.

I am under considerable financial pressure at the moment (= financial hardship) due not only to the bank's actions, but also to non-payment of an invoice owed to me and delayed receipt of benefits and a tax rebate, and consequently I'm in arrears with all creditors, including rent and council tax.

In the meantime, knowing about the bank charge issue and having read the article on this website, I contacted the bank to request a breakdown of charges (returns and unauthorised overdraft fees) since July 2001. I've since received this (note: they didn't charge me!) and they total an astonishing £7.2k, or if I add interest at simple 8% from each charge date, £9.4k.

Clearly I'm very keen to negotiate with them to offset the majority of the final demand against these charges. I could, say, offer a without-prejudice sum of £1100 (=10.5k owing - 9.4k charges) as a first attempt to settle the final demand in full.

Do esteemed readers here think this is a workable ploy? Are the bank likely to be interested? What should be my next move, to write and put this to them? Should I be concerned about the formalities of the Final Demand and possible Default whilst this is being processed?

Thanks in advance of any responses.

Lamp

GRRRRRRRRRRRRRRRRR! I hate the "should I negotiate a lower amount of charges to settle". Martin Lewis talks about negotiating with regards to financial hardship when an OFFER is made primarily because of FINANCIAL HARDSHIP. You are not the first person to say this so please do not think I taking a pop at you specifically but NEVER let the bank off with anything plus it simply does not work. You are either in financial hardship or you aren't, period.
You need to argue that lifestyle event(unemployment) caused a reduction in income into the account leading to charges plus I would add the overdraft as well which lead to priority debts and debts towards the bank. The charges based on unemployment to present date is what I would expect any offer to go to rather than you going to a lower level. I hope that makes sense?

Apologies for the first bit of the post but I was almost screaming NO NO NO NO NO like a madman!!

wisnaeme

NWSM,

The lifestyle event was from Feb 2008 when my wife was made redundant from job and was pregnant and from that point we started to get charges again mounting around £2000 (wife still unemployed and benefit now ceased). The majority for these were bounced DD's for utilities, council tax, car. We haven't been inarrears with mortgage as this comes off at the b eginning of the month but we have had a default letter from car finance ( need car for job) and constant telephone calls and letters from creditors due to late or no -payment each month.

Will this be a suitable argument to increase amount offered when contacting the bank tommorrow???

Thanks again.

natweststaffmember

wisnaeme wrote: »

NWSM,

The lifestyle event was from Feb 2008 when my wife was made redundant from job and was pregnant and from that point we started to get charges again mounting around £2000 (wife still unemployed and benefit now ceased). The majority for these were bounced DD's for utilities, council tax, car. We haven't been inarrears with mortgage as this comes off at the b eginning of the month but we have had a default letter from car finance ( need car for job) and constant telephone calls and letters from creditors due to late or no -payment each month.

Will this be a suitable argument to increase amount offered when contacting the bank tommorrow???

Thanks again.

Yep I think that sound a reasonable and rational argument to make. If they say no then use the same argument with the FOS

liberty_lily

Lamplighter wrote: »

Hi

I have (had) banked with first direct since 1999, and we've had an up and down history as I've lurched between periods of debt and prosperity. However since being made redundant late last year, my income has been sporadic and my financial reserves have depleted over time.

Crunch came in June, when my agreed £1250 overdraft with the bank expired and was due to reduce to £250. I requested an extension (not an increase), which the bank declined citing lack of regular supporting income to fund the overdraft. Consequently the majority of my regular payments bounced, including the monthly payment to service my personal loan with the bank!

In a nutshell, the bank pressed me for a repayment solution, which I was unable to provide, so they withdrew banking facilities and issued a final demand (late September) for all monies owed by me to them (about 10.5k = 2.5k overdraft + 8k loan). They advised I have 28 days by law to respond before they register a default, of which I have about another two weeks to go.

I am under considerable financial pressure at the moment (= financial hardship) due not only to the bank's actions, but also to non-payment of an invoice owed to me and delayed receipt of benefits and a tax rebate, and consequently I'm in arrears with all creditors, including rent and council tax.

In the meantime, knowing about the bank charge issue and having read the article on this website, I contacted the bank to request a breakdown of charges (returns and unauthorised overdraft fees) since July 2001. I've since received this (note: they didn't charge me!) and they total an astonishing £7.2k, or if I add interest at simple 8% from each charge date, £9.4k.

Clearly I'm very keen to negotiate with them to offset the majority of the final demand against these charges. I could, say, offer a without-prejudice sum of £1100 (=10.5k owing - 9.4k charges) as a first attempt to settle the final demand in full.

Do esteemed readers here think this is a workable ploy? Are the bank likely to be interested? What should be my next move, to write and put this to them? Should I be concerned about the formalities of the Final Demand and possible Default whilst this is being processed?

Thanks in advance of any responses.

Lamp

Hi Lamplighter,

Reading your post reminded me of our similar situation with LTSB - we have an o/d of just over £4000 and two loans totalling about £15,000. We are owed over £9000 in charges (£12,000 when 8% interest is added from date of charge). We also are reclaiming mis-sold PPI on both loans which would reduce the balances considerably.

I tried what you are suggesting earlier this year and attempted to negotiate a settlement with Lloyds - they completely ignored my proposals without even acknowledging them. We had also received demands for the full balance owed and they closed our account.

We passed our hardship complaint to the FOS, but as my OH has recently started a new job (having previously been self-employed) we have been able to request that they put this on hold.

However we are still not in a position to repay these monies to LTSB and fully intend to put in a counterclaim should they instigate court proceedings against us as I believe what they owe us will be at least equal to and possibly more than we owe them.

With the benefit of hindsight I agree with what natweststaffmember has said and regret now that I attempted to bargain with the bank, but at the time I was desperate and prepared to try anything.

Good luck with your complaint!

liberty_lily xxx