Have HSBC Breached The CCA?

MattLFC

Right, I have a credit card with HSBC, which I was given in 2004 without any warning. Basically, I turned 18 and my account was changed over from a "Livecash" account to a full current account. I signed an agreement for this, and HSBC have been able to access this on their computer system.

To cut a long story short, I've always kept my current account and credit card with HSBC in very good standing, and have a generally quite good history with them, Barclays and Santander, never overdrawing etc, and always maintaining the ability to max out new ISA's within a few months of the tax year, whilst living in my own home since 19, with multiple regular (and always honoured) direct debits.

My credit card has always fluctuated between £300 and £2000 balance, though it has a £4000 limit on it, I have consistently made triple-minimum payments, often a lot more than this, and generally use it as flexible finance to buy luxury goods.

In the run-up to April this year, I went into my HSBC branch to ask if they had any decent ISA's and was somewhat disappointed with their response. Ended up going with the Barclays Golden ISA i3. I had £3300 in an Santander eSaver account not much use to me, and looking at all my savings and investments in other accounts, I felt it was high time I paid off the credit card and got rid of it, so had planned to do so using the eSaver money in July/August, and informed the HSBC that the card had been cut so it would not be used until I paid it off (basically, any transactions should be considered fraudualent - im security conscious). Anyway, within a week of me telling them this (March), they sent me a credit card statement saying my interest would be increased from 11.9% to 26.9% - which I thought was outrageous. So I immediately phoned them and asked for an explanation - to which they could not give me an answer other than the usual "we occasionally re-assess our credit rates blah blah".

Anyway, knowing I have never signed a credit agreement, I was in t wo minds; on the one hand, morally I felt I should just pay it and be gone with HSBC altogether, on the other hand however, I felt I had been poorly treated, their lack of customer service, and a complete lack of loyalty. Going through my credit card statements over the years, I have almost certainly paid more interest than I've actually spent, so in protest, I decided to play them at their own game, and went into a branch, and asked for a copy of my credit agreement - which the woman could not pull up on-screen (as expected). I explained the date I transferred to my current account she was able to pull up the agreement for that, but had nothing in relation to the credit card. She said she would send a request through to the branch I transferred my current account. I returned 4 weeks later, and she said they had not been able to trace it. I said I wanted a copy of it, or payments on the credit card would cease as of next-month (June at this point) unless the interest rate was either reduced back to 11.9% or a valid reason was provided with regards the increase. The woman said she would ask for the archives from London. I returned 2 weeks later, and was informed that they are unable to trace the credit cagreement, and are unable to comply with either of the two requests with regards interest rates. So I stopped paying the card with immediate effect.

Then I got a couple of letters and a notice of default, and thus far (my credit rating is monitored by Experian) I have recieved 3 default notices against me, and they are still pursuing me (I have removed all my savings and cash from HSBC accounts to prevent them using the set-aside rule).

Now I work on IT support for the Citizens Advice, so have already recieved a little advice from them, and some idea's (but don't really wish to discuss private and confidential matters with employees).

What I would like clarification over is:

1. Are they legally allowed to place a default on my credit agreement, without a signed credit agreement, given that the card was provided prior to the 2006 CCA?

2. Is the debt now un-enforcable - ie. they are not able/willing to provide me with a copy of my credit agreement within 12 days, and thus the agreement is, regardless of signature or not, unenforcable until such a time as they are able to (and additionally, they can no longer demand payment, simply request it).

3. If the credit agreement is found to be non-existent, will they have a legal obligation to remove the defaults off my credit record, once the dispute is resolved one way or another.

4. Also, should I been looking to report them to the FSO, as they are refusing to help me, engage in any dialogue with me, or accept a complaint, because they claim I must pay the amount overdue to return my account to good standing, and to recieve service.

You help is much appreciated.

izools

They aren't in breach of anything. The agreement will have been attached to the card on the reverse of the letter it was glued to. Your using the card will be considered tacit agreement to said... agreement.

The agreement contains a clause stating the rate is variable. You will have had the opportunity to disagree with the terms laid out on the letter the card was attached to by closing the account but you chose not to.

You also had the option of closing the account to "Repayment only" which would have frozen the interest rate at it's prior rate and immunized you from future increases, but prevented you from putting any further spending on the card.

If this was not made clear to you at the time, you need to raise a formal complaint with HSBC stating that they did not follow the government best practice guidelines in regards to allowing customers to opt out of APR increases.

Don't go down the CCA route. You won't win, and you'll ruin your good credit rating.

Good luck! :beer:

dzug1

But it's already ruined isn't it? 3 default notices.

Dave101t

you already said you signed the agreement, then said you never signed.
you were arsey with them 'im cutting this up so bla bla bla' - you do know cutting your card up wont stop it being used?
you never made a full payment of the balance during the life of the card....they reflect this by increasing their %.
standard practise, and your a fool to mess around like this.
why not go the whole hog and pay a fly by night company to 'reclaim all your charges for a flat fee!'??

CLAPTON

you seem to have kept balances on your CC costing 14% yet had money in ISAs paying 3-5% maybe?
why would you do that?
it costs you money and it makes your credit records worse than they need to be

MattLFC

Gosh, some of us have got out of bed the wrong side this morning, do you really all hate you jobs that much lol?? Chill out for crying out loud, lose the attitude!!

1. I never said I signed an agreement for the credit card, I signed an agreement (okay, lets make it simple for those who are unable to grasp the words current account and agreement in the sentence, not automatically meaning credit agreement - I signed the current account terms and conditions) for the current account (the terms of which did not include the credit card, as confirmed by the HSBC themselves - the mere fact that they are unable to provide a copy of the credit agreement, should tell you this).

2. Strange how HSBC have not mentioned (as yet) your use of the card is acts as your acceptance of the credit agreement - maybe you know something they don't?

3. Indeed, I would assume "the agreement" does stipulate the interest can vary - however, HSBC have thus far been, by their own admission, unable to trace any credit agreement, and are thus unable to provide me with it.

4. Under sections 77, 78 and 79 of the Consumer Credit Act 1974 (any agreement made, was prior to the 2006 Consumer Credit Act), the lender must be able to provide a copy of the credit agreement within 12 days, else the debt becomes "unenforceable" - in this case, it has been longer than 12 weeks since my request.

5. Additionally, under section 61 of the Consumer Credit Act 1974, it suggests that the agreement is not legal unless it is signed by the debtor and creditor, and section 65 suggests that the debt is not enforceable under law if section 61 was not complied with.

I don't need credit - if I was worried, I'd pay the debt today lol, I have far too much money in savings for that (though try telling that to Barclays, who despite never having my current account go below £1000 credit in the 3 years I've used them and having a couple of maxxed ISA's with them, keep trying to sell me an overdraft facility every time I use telephone banking lol), so the credit-record problems are not really a worry for me; however, I am annoyed that if by not providing a copy of the credit agreement within a reasonable period of time (or 12 days as the CCA suggests), that HSBC are now slamming me for a debt they know should be currently invalid/unlawful until such a time as they can meet their own obligations.

MattLFC

CLAPTON wrote: »

you seem to have kept balances on your CC costing 14% yet had money in ISAs paying 3-5% maybe?
why would you do that?
it costs you money and it makes your credit records worse than they need to be

We all live and learn don't we, besides which, I've always been led to believe that having some form of credit, and using it, facilitates your ability to gain a good credit record, which certainly did me no harm, providing me with a mortgage at the age of 19 lol.

suehippo

I think you are right to stick by your guns but I think you need to go through the HSBC complaints procedure (put everything in writing and send it recorded delivery) and if you still get no joy take it to the FOS.

Good luck.

[Deleted User]

MattLFC wrote: »

, I've always been led to believe that having some form of credit, and using it, facilitates your ability to gain a good credit record.

You're right to use credit to improve your rating, but there's no need to go paying interest on it. Spend and pay in full each month.

MattLFC

suehippo wrote: »

I think you are right to stick by your guns but I think you need to go through the HSBC complaints procedure (put everything in writing and send it recorded delivery) and if you still get no joy take it to the FOS.

Good luck.

Cheers, I have contacted them (before they locked me out of their internet banking due to not sending me a secure key), and was contacted by an "American" representative of their collections agency, who did not seem to have a clue about the Consumer Credit Act, in fact she deemed the Consumer Credit Act "irrelevant" which was highly surprising. She actually believed that HSBC have no obligation to provide me with a copy of my credit agreement, and that I should just pay it - and basically kept fobbing me off.

I have telephone to make an official complaint yesterday, but got put through to collections, who were again refusing to escalate the complaint, and simply asked am I in employment or unemployed, as they can be more lenient if I say I am unemployed...

I guess I will hand deliver the complaint to my local branch and await the outcome, make sure a British person, who understands British legislation deals with it.

MattLFC

Deleted_User wrote: »

You're right to use credit to improve your rating, but there's no need to go paying interest on it. Spend and pay in full each month.

I know, I know, silly of me, it took me until the end of last year to click on to it though, I guess I mistakenly thought that making a payment every month on a credit agreement with used credit was better than clearing it all in one go or as fast as possible - though I did understand the interest implications, so a bit silly of me.

Glad I learnt it sooner rather than later in life lol.