Payment using overdraft CONSUMER CREDIT ACT

FOXGLOVE_2

I'm in dispute with a company (Streamline.net... awful, but anyway) after my current account with HSBC was debited for £114.98. The dispute I have is that I cancelled my subscription with them and this is due to apalling service, servers constantly offline, unable to upload to my site. So they had no right to renew my hosting and even so, they are in breach of contract for not providing a service I have (bitterly ) paid for.

Now, the payment of £114.98 was paid for using my overdraft. It has actually made me go over my limit so you can imagine, I'm far from happy.

I've tried to resolve this with Streamline.net but they are complete sharks and refuse to admit anything is wrong.

I tried to claim back through the bank raising a Maestro dispute. I wasn't very hopeful as they didn't steal my details, I provided them when I first signed up. Also, the amount wasn't disputed. I just did not want ANY money paid to them.

These are the criteria for claiming back Maestro transactions so I knew that was a long shot.

Today, a friend reminded me that I had paid for this using my overdraft so therefore the purchase is covered by the Consumer Credit Act 1974 under the Equal Liability clause.

Essentially, I have the same rights as someone who paid using their credit card and in that case the bank is jointly liable so I can request the refund from them since the company is refusing to even acknowledge me - or others having the same problem.

On the Consumer Direct website, they have a template letter that allows you to write to your bank/credit provider asking for a refund, so I am planning to send this off.

Does anyone know the address of HSBC legal department, this is who I have to send the letter to.

Also, has anyone else claimed back overdraft money in the same way?

PNPSUKNET

I have never heard of this in that way, if it was people would go into their o/d just for the protection

simongregson

Yes, it is covered by section 75 as your card was used as a 'credit token' You will need to write to your bank raising the dispute and highlighting that it it is under section 75 of the CCA as I don't expect that it is a common occurence for debit card transactions to be disputed in this way.

Paul_Herring

Also, the amount wasn't disputed. I just did not want ANY money paid to them.

It would appear the amount was disputed.

I'm in dispute with a company after my current account with HSBC was debited for £114.98.
[...]
Today, a friend reminded me that I had paid for this using my overdraft so therefore the purchase is covered by the Consumer Credit Act 1974 under the Equal Liability clause.

It is not covered:
http://www.financial-ombudsman.org.uk/publications/ombudsman-news/31/creditcards-31.htm

For section 75 to apply, certain conditions must be met. Most credit card purchases will be covered, but:

o the cash price of the goods or services must be more than £100 and not more than £30,000; and
o purchases are not covered if they are made by debit cards or by charge cards (where the monthly bill has to be settled in full)

FOXGLOVE_2

Paul_Herring wrote: »

It would appear the amount was disputed.

It is not covered:
http://www.financial-ombudsman.org.uk/publications/ombudsman-news/31/creditcards-31.htm

I can't dispute the amount because when I told the bank the amount should have been ZERO, it does not allow this to be a disputed amount.

I looked at the financial ombudsman link earlier and although it says debit card purchases, it doesn't offer an example like this. When an account is in CREDIT, that's your money so you have to fight it out with supplier/company. But overdraft money is the banks, just like credit card 'money' is the banks. I've tried to find info on HSBC's overdraft policy online but may need to dig out T&C's they sent.

olly300

FOXGLOVE wrote: »

I can't dispute the amount because when I told the bank the amount should have been ZERO, it does not allow this to be a disputed amount.

I looked at the financial ombudsman link earlier and although it says debit card purchases, it doesn't offer an example like this. When an account is in CREDIT, that's your money so you have to fight it out with supplier/company. But overdraft money is the banks, just like credit card 'money' is the banks. I've tried to find info on HSBC's overdraft policy online but may need to dig out T&C's they sent.

You won't find that information. Remember t&c are to protect the banks interest.

Your best bet is to try it on and see how far you get as your case is slightly different as you are disputing using funds from your overdraft to pay the amount.

The only other thing you can do is take Streamline to the small claims court if they are in England and Wales.

oxenryd

FOXGLOVE wrote: »

I looked at the financial ombudsman link earlier and although it says debit card purchases, it doesn't offer an example like this. When an account is in CREDIT, that's your money so you have to fight it out with supplier/company. But overdraft money is the banks, just like credit card 'money' is the banks. I've tried to find info on HSBC's overdraft policy online but may need to dig out T&C's they sent.

After reading the Ombudsman link, my understanding is that it is to do with the type of card you use, not the type of account

jambosans

A bit of digging on the FOS Website and I came across this:-

"using plastic cards as credit-tokens"

This article, and a few others I have read do suggest that regardless of the type of card, as simongregson said, if a "credit-token" is created, then it is covered by the Act.

It's a complicated one, because the article I've linked you to, mostly refers to unauthorised use of cards. Most articles you read (such as this one) tend to run on the general assumption that a debit card is attached to an in-credit bank account. (However that article does note the exception in regards to debit cards and overdrafts.)

This article on the FOS also states:-

What the Banking Code fails to say, and what some firms appear to overlook, is that using a card to create or increase an overdraft makes it a credit token for the purposes of the Consumer Credit Act 1974.

Am I 100% sure the purchase is covered, no, but from my understanding of what I've read I think you are. Everything I have read on the FOS Website however is in relation to unauthorised use of a card, and the liability of the customer when they have been negligent.

Hope those articles help.

FOXGLOVE_2

Yeah, it's this credit token thing that makes the difference here.

I remember seeing that guy Dom on BBC1 mention this a while ago, saying that people should always book holidays etc using credit cards as this gives them more protection if things go wrong. He definitely said that if you're using overdraft money, it's covered under the same scheme.

Been on the phone to the bank this morning and they are a bit useless, they seem too wrapped up in the Maestro dispute to answer any questions about the CCA 1974 (equal liabilty). Maybe this is intentional so I don't get the money back through them!

Consumer Direct have a handy template letter thing that allows you to write to your bank requesting a refund. I have to write to Streamline.net and then send a copy of the complaint to my bank, stating that if Streamline.net refuse to refund me, the bank is jointly liable.

I'm determined to get this back. If it works, I'm going to tell everyone I know as this is surely a loophole that a lot of people have missed out on because they didn't use a credit card.

Still trying to find T&C's on overdrafts, or something that indicates that a debit balance is covered by CCA.

I'm not sure if anyone at the bank is forthcoming with the facts on this, as obviously, they don't want people to know if they can avoid it.

With credit cards, it's pretty well known nowadays and they probably don't mind refunding a credit card customer as they make a lot of money from people that use them.

But someone like me, a student who is eligible for nothing and on a low income, I'm a low value customer so why should they keep me happy?!?!

Anyway, I've nothing to lose here so wish me luck.

ducknumber1

FOXGLOVE wrote: »

But someone like me, a student who is eligible for nothing and on a low income, I'm a low value customer so why should they keep me happy?!?!

Anyway, I've nothing to lose here so wish me luck.

Because one day you'll be a high earning graduate! Keep at your studies and that's the way it's supposed to work out, from the banks point of view anyway.

Good luck in your CCA hunt

simongregson

It won't be in the T&C, but the law (consumer credit act) takes precedence. You need to send a letter stating this, as I said phoning will do no good as the call centre person probably doesn't know how the CCA affects your reclaim.

If you get no joy from the bank, you can take the claim to the FSO, you need to follow your bank's complaints procedure to its conclusion first though. They will probably find in your favour.