Enormous 'deceptive' >£15,000 credit card interest

Gwanso

My mother has recently discovered that her HSBC Visa Gold Card has had a £10,000 limit on it and was getting 'topped up' automatically from her current account on a monthly basis to stay within the £10,000 limit and not, as she had assumed, to clear it to £0 as was the case with my father's identical Gold Card. In other words, she has been paying interest on up to £10,000 (hovering around £9000 for the last year at least) for more than the last five years. This mistake has come about, we believe, due to the belief that my mother's credit card was the same as my late father's who passed away last year. Both were set up oround 15 years ago and his card was set up to be automatically cleared each month from his bank account. For some reason my mother's was set up differently. (or maybe changed at some point) The result had been £100-£250+ interest average over the last five years plus. Unfortunately she has been misreading her statements and thinking that that figure (wavering between 8-£10,000) was a 'credit' on her account and that the £250 charge, for example, was a debit on the credit card and not an interest charge. (Apart from the 'Gold Card' at the top of the page, the statement looks like a regular HSBC statement.) The result has been £10-15,000 interest over the last five years.
The $1000 Question (literally):
Can she reclaim the money or part of it? Why wasn't a warning letter sent when it was and is clear that she had more than enough money in her current account to completely clear the debt? Can we go through the steps as on the moneysavingexpert website or is this case different? We have already gone to see our local branch assistant to be told that 'there is nothing we can do' and that it is clear from the statements that the balance was a 'credit' on the credit card and the other figures were both automatic payments to maintain the £10,000 threshold and the interest charges. Any help/advice would be greatly appreciated.
Thanks.

dunstonh

For some reason my mother's was set up differently.

You get to choose if you want 100% of the balance or the minimum payment.

Can she reclaim the money or part of it?

From a technical point of view, no. Nothing immediately seems to have been done wrong.

Why wasn't a warning letter sent when it was and is clear that she had more than enough money in her current account to completely clear the debt?

The credit card company is a subsidiary of the bank and doesn't have access to balances on her banking accounts.

Can we go through the steps as on the moneysavingexpert website or is this case different?

There is nothing on the website to reflect this case.

The best you can hope for is a goodwill gesture from the bank (or more likely the credit card arm). However, as there has been no wrong doing on their part, there is no reason for them to refund any more. Financial redress is to correct errors and mistakes by the firm. The firm hasnt made a mistake in this case. Not unless you can provide evidence that a monthly payment of 100% of the balance was requested. However, after 15 years of statements, that is unlikely to be a realistic complaint.

Ballyhoo

Gwanso wrote: »

Can she reclaim the money or part of it? Why wasn't a warning letter sent when it was and is clear that she had more than enough money in her current account to completely clear the debt?

As I understand it, the payments she made each month were covering the interest only, and not the capital sum. As long as your mum's payments were meeting the minimum required monthly payments on the card, my understanding is that the bank's systems wouldn't notice that anything was wrong.

I'm afraid it might be down to your mother to have kept an eye on things. It may be worth writing to the bank if you feel that something has gone horribly wrong, but they will ask why your mother wasn't checking her statements.


(EDIT: just reread and saw that your mum had misread the statements - the bank might feel generous, but if it's down to her misunderstanding then they may say that's tough, unfortunately. If your mum has a reason she might be more likely to have misunderstood what was going on, for instance if she's very elderly, you could see if the bank might refund a proportion of the charges. But, as Dunstonh wisely says, the bank is under no obligation and if it is her error then they will quite frankly have to be feeling very generous.)

bengal-stripe

Gwanso wrote: »

.....she has been paying interest on up to £10,000 (hovering around £9000 for the last year at least) for more than the last five years. This mistake has come about, we believe, due to the belief that my mother's credit card was the same as my late father's who passed away last year.

If your mother is incapable of reading a bank statement, why didn't your late father keep an eye over her financial affairs?

Wobblydeb

At some point she must have been buying a lot more than she was paying off each month.... Did she not notice the balance increasing each month?

tyllwyd

So your mum had a debt of approx £10,000 but she thought it was £10,000 in savings? Or are you saying that she knew it was a credit card, but she thought that the statement for a credit card would show a negative number if she owed money on it, so because the statement said £10,000 rather than -£10,000, she thought it was in credit? Does she have any other credit cards?

The bank was taking money every month out of her current account, and adding it to her credit card account, but she wasn't surprised that the balance didn't increase gradually over the years? Was she still spending on it?

She thought she had £10,000 credit on the card but if so, why didn't it earn any interest over the years?

If she thought that the card was getting paid off in full every month, why didn't she wonder why the statements said £10,000 rather than £0?


To be honest, it sounds as if she has been receiving perfectly standard credit card statements over the past 15 years, and she's not looked at them properly. I guess you can try to argue with the bank, but I don't really see what they've done wrong. They could have been more pro-active if she really did have £10,000 in her current account and could have cleared the card, but then again, she was comfortably paying the interest charges, they were sending her statements every month - why shouldn't they assume that she was aware of the situation and happy for it to continue?

Gwanso

Thanks for the above helpful statements. Most of your replies have been helpful and as I suspected. I don't appreciate the rude and unhelpful remarks of some, however. My mother is 75 this year and had been consumed by looking after my sick father for the last five years (even the last 10 years). About this same time he stopped looking after financial affairs and I have been looking after his affairs, filing his tax return etc. Unfortunately, I had not been aware of my mother's credit card statements until she noticed the problem after my father had passed away. English is also not her first language. Yes, clearly I am aware that she has misread her statements and was also very sensitive about me looking into her affairs, until now. I posted the thread under the heading 'deceptive' due to no replies when I posted it under a different heading. Perhaps the credit card company could have sent her a letter of advice as to the type of payment scheme she had and whether it was still appropriate? I guess I will count it as a loss and pursue it no further.

EB69

I would have thought it was worth writing to the credit card company and explaining the position, if only to see whether there are willing to do anything as a gesture? I doubt they will, but if you dont ask you dont get.

Mallotum_X

I cant see the bank doing anything other than saying the charges stand, you might get lucky i guess but it sounds like its your mothers mistake in not noticing the balance wasnt paid for 5 years. Did her current account have the 10k sat in it ready to pay off the balance?

ERICS_MUM

I would definitely write to see if they could do something in the circumstances. However "goodwill gestures" are more likely for an error etc over the short term, maybe a one-off, rather than a long-running misunderstanding over years.

Good luck anyway and let us know what they say.


Linda xx