Can HSBC take £s from a loan a/c to fund main a/c?

bob_dob

Hi, a friend at work tells me he is using his overdraft+going over it sometimes+is incurring charges. He also has a loan with them. Apparently they recently took £300 from his loan a/c to fund his main a/c without telling him, thus undoing all his loan payments he has made in the last 3 months. Is this common practise please?

SalsaDanca

The terms and conditions of your friend's bank accounts will give the bank the right to do this. It's called the Right to Offset.

However, I don't think it's that common for the bank to use the right to offset. They shouldn't do it if the customer just goes over their limit once or twice, so the bank may be seriously concerned about your friend's ability to repay his debts. If so, your friend should be aware that the bank also has the right to remove his overdraft facility, and to demand that the overdraft is paid back immediately. I suggest that your friend takes steps to get his debts under control before the bank has the chance to make his situation any worse.

If your friend can post an SOA (a detailed list of income, outgoings, and debts) on the Debt Free Wanabee forum (http://forums.moneysavingexpert.com/forumdisplay.html?f=76) he will get lots of advice from the people on that forum. Good luck.

zppp

I think what has happened, only a guess, the loan account is showing a debit and credit around roughly the same time, indicating that he didn't have enough money to meet a loan payment. Just a thought though.

bob_dob

Hi and thanks for that.
Brilliant sensible advice about the SOA SalsaDancer, i totally agree and i will pass the message on.

However, after briefly discussing his finances with him and finding that he pays £47 per month for Sky, i advised him that surely this was one of the first things that he needs to rid himself of......but got the reply "No, i cant live without my Sky"!!!!!

Also, he mentioned that his car insurance was soon due for renewal but that he 'Couldn't be bothered' to phone/do a web search for the cheapest quote. My frustration,at that point, got the better of me im afraid.
Thanks for the advice though.

Ps- he went into his bank to discuss the bank charges of £100 he has received and the person who dealt with him tried, quite strongly, to get him to sign up for a HSBC credit card. My frustration at my friend's lack of willingness to take action over his own finances was, at that point, matched by my anger for sales reps/bank workers like that. My only surprise is that my friend at least saw sense for once and refused the offer.
Unbelievable.