HSBC dirty tricks?

Infidel

Hi. I'm just wondering if this has happened to anyone else.

I had/have a graduate account with them and the interest free overdraft was £1500 and it's due to be cut by £500 each July over 3 years. Well this July (2011) was the first year of the 'cut' and instead of cutting my overdraft by £500 (to £1000 limit), they cut it by £550 (meaning the limit is now £950). Also I am within a few pounds of the £950 overdrawn mark and have a small DD amount (£12 for internet) that goes out every month.

So, not one to be cynical at all, but I think they have done this specifically so that when my DD goes out that I'll then be over the 'new overdraft limit' of £950 and then be hit with the 'overdraft limit charge'.
I can't think of any other reason why they'd do this.

What complete !!!!s, no?

Alter_ego

As you are aware, you can deal with it- Fool them!

jalexa

Infidel wrote: »

I had/have a graduate account with them and the interest free overdraft was £1500 and it's due to be cut by £500 each July over 3 years. Well this July (2011) was the first year of the 'cut' and instead of cutting my overdraft by £500 (to £1000 limit), they cut it by £550 (meaning the limit is now £950).

Have you asked for an explanation?

hello2007

Infidel wrote: »

Hi. I'm just wondering if this has happened to anyone else.

I had/have a graduate account with them and the interest free overdraft was £1500 and it's due to be cut by £500 each July over 3 years. Well this July (2011) was the first year of the 'cut' and instead of cutting my overdraft by £500 (to £1000 limit), they cut it by £550 (meaning the limit is now £950). Also I am within a few pounds of the £950 overdrawn mark and have a small DD amount (£12 for internet) that goes out every month.

So, not one to be cynical at all, but I think they have done this specifically so that when my DD goes out that I'll then be over the 'new overdraft limit' of £950 and then be hit with the 'overdraft limit charge'.
I can't think of any other reason why they'd do this.

What complete !!!!s, no?

I have a HSBC graduate account in its second year and my OD limit is £ 1,500 and they are only charged me interest on the £500 as the £1000 is interest free for another year. HSBC do not cut your OD limit they just charged interest on the amount that is no longer interest free. If they have cut your limit then there is something wrong with your account or your credit file.

Do you pay money into your account regularly and stay under the overdraft limit ?

izools

They should have given you 30 days advance warning of when they will reduce it and what they will reduce it to.

My advice, is cancel the DD ahead of time to avoid a fee, and call the company to pay by debit card and re-instate the DD when you have more money in the account.

Shouldn't have to worry about fees then; and assuming you're only a few days late won't affect your credit file either

EDIT: They're legally and contractually within their rights to remove the whole thing at 30 days notice, I'm afraid.

smartiedriver_2

Overdrafts are an on-demand form of borrowing and as such the bank can withdraw all or part of the facility at any time - they do not have to give you 30 days' notice. It clearly states this in all facility letters.

In terms of why, as previously mentioned, you must have a problem with your account. It sounds like they have reduced it to a covering limit only, and possible further reductions are on the cards. Normally, only the interest-free element is reduced; the limit stays as it was.

As for suggesting it was done deliberately so as to incur charges - somehow I think the bank and it's staff have better things to do with their time!

pqrdef

Certainly they've deliberately set your overdraft limit close to your actual debt. Your problem now is that if you fund the account at all they may instantly take up the slack by reducing your overdraft limit further. This makes the account useless for making payments out of.

They may not have looked at your DD, but in a general way they are of course aware that this sort of tactic is a prolific source of fees and charges.

Basically an overdraft facility is unusable if the limit is liable to be reduced without warning, since you can never know when your upcoming payments are safe. In other words, you never really know if you've got the overdraft facility or not. I'm surprised the OFT isn't on to this.

Infidel

jalexa wrote: »

Have you asked for an explanation?

Yeah. I'm still waiting for my tin can string to reach India.

Infidel

smartiedriver wrote: »

As for suggesting it was done deliberately so as to incur charges - somehow I think the bank and it's staff have better things to do with their time!

Like what?

Infidel

izools wrote: »

EDIT: They're legally and contractually within their rights to remove the whole thing at 30 days notice, I'm afraid.

I wonder if that's actually happened to anyone here. LOL, imagine if they did that, there's no way I'd be able to come up with a spare grand at short notice........perhaps I'd have to become a banker and steal it.