HSBC, Returned Direct Debit and Credit File

BusinessWoman

I had a direct debit that came out of my account a day earlier than i expected, HSBC returned it to bring my balance back to £0, so I was not overdrawn which was fine by me rather than getting charge £25 for them to pay it. This happened the month before as well but I only just realised

But I just checked my credit file and noticed they have given me a late payment TWO MONTHS RUNNING!!!

Can they do this?

Mikhail

Yes, HSBC and first direct are only 2 companies which doing it. I guess you don't have an authorised overdraft?

stclair

I have always found it really odd how HBSC only seem to be the only banking group that adopt this policy..

BusinessWoman

It's totally unfair in my opinion. Time to read the terms and conditions, hope its not there and ask for them to be removed as I do not owe them any money, i rather the charge

lmurthwaite

I had exactly the same thing with HSBC. I'm disgusted with them. I had a returned DD in January and I even called the collecting finance company to explain my situation (prior to the DD being returned unpaid) and we came to an agreement that worked for all. The result was a successful collection of their direct debit 5 days later. Imagine my shock when I get an alert on my Credit Expert service telling me of a change to my file to find a status of 1 from HSBC themselves ! I have since called HSBC and their technical explanation (from a woman called Lindsay Gibbs) is as follows.

"We report returned direct debit payments to the credit reference agencies but as they do not have a category for returned direct debit payments on your file they place a late payment status on instead"

So in other words HSBC are stating that the Credit Reference agencies are purposely misrepresenting the data on file as they don't have a category for returned direct debits. What's next? Bankruptcy for bounced cheques? Foreclosure for going over your overdraft? Death penalty for losing your wallet?

If I had owed HSBC money and not paid on time (such as my credit card bill) I would expect HSBC to send the correct status of missed payment on account to the credit reference agencies. But the fact that they have passed information of a returned direct debit (which was to pay a car finance company, not even HSBC) means that HSBC are now offering up information to the credit reference agencies that is not even theirs to offer up ! If anything the car finance company should reporting late payments.

I also applied for an extension of my overdraft facility last year as I had a temporary change in circumstances which has been ongoing for 6 months now (my company is in administration and my salary has gone down as a result and I will be moving to a new job in May). I knew my ouitgoings would leave me £300 - £500 short every month as my salary was £400 lower every month from November. Guess what? they said no and as a result I have been going over my overdraft facility and HSBC then happily charge me £25 per transaction to do so. Rather than give me the extra £500 on my OD on a temp basis they have charged me what amounts to nearly £300 since November and this will continue until I start my new job at which point my salary will be higher than current (even prior to administration).

I would like to take my business elsewhere but now I have this status of 1 on my credit file I will have no chance of opening up a new account with any facilities.

It seems that as the consumer we are completely at the mercy of whatever these companies feel like doing. There is obviously a massive disconnect between the banks and the credit reference agencies if provided information is re-translated at the credit reference company end to something other than what it really is.

:mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad:

noh

A status of "1" against a bank account has a different meaning to that of a credit account.
HSBC are correctly reporting it and the reference agency is correctly displaying it.
The explanation you received from the HSBC CS rep is incorrect.

See page 13 of http://www.experian.co.uk/assets/consumer/credit-score/files/CEUnderstanding.pdf

"How are status codes used on current accounts?
The status codes lenders use on current accounts can have a different meaning to those used on other accounts. This
is because current accounts are more flexible than other types of credit. For example, you may not have to repay your
overdraft at a set rate each month. The information on your credit report shows the status of your account when the
lender last updated our records."


"1 Agreed repayments are one to two months behind. Your overdraft balance has been greater than your
overdraft limit for one to two months Cheques, direct debits and standing orders may have been
bounced to keep the account in order"

lmurthwaite

I have to dispute your point

"1 Agreed repayments are one to two months behind. Your overdraft balance has been greater than your
overdraft limit for one to two months Cheques, direct debits and standing orders may have been
bounced to keep the account in order"

At no point were my agreed payments one or two months behind. In fact the payment was successfully made within 5 days of the returned DD and in any case the payment was to a car finance company not HSBC. If there was a late payment the car finance company would have filed the information to Experian not HSBC.

I have spoken with Experian today and they also agreed with me and that the status of 1 does not reflect the true conduct on account. They also completely disagreed with the HSBC CS statement around the translation of status (or is it stati being plural) as a result of not having a suitable status to fit this.

The Credit Reference companies have no ability to change anything that is sent to them. The originator of the data is the one that provides the status to the CR companies, so in this case HSBC have made a grave error by reporting a returned direct debit as a 1 status issue; which by the definition you found on page 13 is not actually the case.

I actually support the Experian data platform as part of my job in IT for a City Futures Broker which is why I am well aware that the information HSBC gave me is highly incorrect, plausibly libellous !

It's just a shame that us, the paying public have to be put to such extreme inconveniences as a result of these large corporation inadequacies. HSBC were number 2 on my list of 8 complaints to chase up on today. The were in front of EON, British Gas, O2, Newham Council to name but a few. Chasing down our rights and getting good service is becoming a full time job for some !

noh

Your overdraft balance has been greater than your
overdraft limit for one to two months Cheques, direct debits and standing orders may have been
bounced to keep the account in order"


Is the relevant wording and is a true reflection of the conduct of your account.

There is no "and" between the two conditions that cause a "1" status to be issued.

You have been over your overdraft limit for one or two months and a DD has been returned.

lmurthwaite

You are assuming that I have been over my overdraft limit for one to two months. This is NOT the case. the DD was returned because of insufficient funds but the recollection was succesful 5 days later as there were sufficient funds. So therefore the quote above is inaccurate on my account. My overdraft is paid back in full every month so there is no chance of my overdraft staying overdrawn for more than one month let alone any payments made over my overdraft limit.

lmurthwaite

I have had to go over my overdraft facility as a result of HSBC not allowing an increase for me but this has not been consistent every month. Months of Nov, Jan I have gone over but at the end of each of those months it has been repaid in full. So unless the statement above means that at any one of two months of the year you exceed your overdraft the bank can issue a status of 1 for every time this happens I would want to know how anyone in this country can obtain credit ! I pleaded with HSBC for an extra facility in advance of the situation I was about to face and they blankly refused and when the inevitable happens they charge me and destroy my credit file. Where is the fairness in that?

thatsean

I have had to go over my overdraft facility as a result of HSBC not allowing an increase for me but this has not been consistent every month.

- with respect, you went into your overdraft due to poor previous planning and a lack of an emergency fund


I pleaded with HSBC for an extra facility in advance of the situation I was about to face and they blankly refused and when the inevitable

- not inevitable

when the inevitable happens they charge me and destroy my credit file. Where is the fairness in that?

- hardly destroyed, if everything else is on order, i doubt many lenders will be concerned by one zero

I think you need to take responsibility for this situation, and plan your finances to a budget, what if HSBC pulled the overdraft? You need to be able to run your affairs above the £0 level.