HSBC asking for repayment of overdraft

mwddrwg

Hi all,

After your opinions and advice on this issue please.

I have a long-standing overdraft with HSBC of around £650 which I have been repaying at a small monthly rate of £15 whilst they are charging interest of around £9 a month. I've been doing this for years as it's the only amount I can afford to put towards it.

They are now saying that the overdraft facility has been terminated as I'm not paying the £269 a month they 'suggested' that I pay to clear the balance quicker. I wrote to them with a copy of my budget and made it clear that I can't afford any more than £15 a month.

Heard nothing so I phoned them before the overdraft was terminated to ask them if I could carry on paying like I have been doing. I pointed out that I'd never missed a payment in 10ish years and that they were actually making money from me so why was there a problem?? This didn't wash and they are now referring me to their collections department.

Do you think I'm being unreasonable by asking to carry on with my small repayments given that that's what I can afford? After all it's not the biggest overdraft in the world! I would've thought that they'd be happy to still make money out of me for as long as they can...

Any advice on how to tackle this would be appreciated. Thanks!

david39

They will be within their T&Cs in demanding repayment as they can do so at any time and without notice.

However, it does seem a strange course of action by them considering your payment history and that they receive a regular (albeit small) income from you.

Maybe there are other changes in your circumstances that make them think that their money is at more risk than it used to be. Alternatively, there may be changes in their circumstances that dictate the recalling of some overdrafts as a blanket policy, thinking that they can get a better return elsewhere.

It is a problem with overdrafts that they can be recalled at any time and not necessarily because of some change in the borrower's circumstances.

amiehall

Is this your only debt?

mwddrwg

Thanks for the replies.

I know that overdrafts can be recalled at any time but it seems harsh for a relatively small balance. I'll keep paying until they contact me again I think.

No, it's far from our only debt but these are being paid as well and we've never missed a payment on any loan/card/overdraft before.

amiehall

There's not really much you can do beyond keeping paying them what you've calculated you can afford. It does seem quite petty of them as they can't really expect to get more money by going down this road.

It could end up being positive for you though as it could end in them stopping interest payments when obviously your payments would clear the balance much more quickly.

Good luck getting sorted

badger_

If it's the account your salary gets paid into would it be worth opening a basic account elsewhere and moving your debits & credits to another bank. Then ask HSBC for a payment plan, if repaying it all at once is going to be a financial struggle for you.

paulmapp8306

They are perfectly in their rights.

I had a £3000 OD which I used to the hilt, and that got reduced to £2200 without warning. This was done because my wages paid into my account went down - so they reduced my credit facility (which is what an overdraft is) accordingly. I had to pay the £800 - though they did agree to a 6 month period before they enforced the new limit as I couldnt pay the whole £800 in one month.

Ultimately - they can reduce your overdraft facility, or remove it completely at any time, and if that leaves you in the red, and you cant clear it, it then becomes an unauthorised OD whcih they can charge you heaps for - OR is classified as a debt they cant recover (as you cant pay it) in which case refering it to collections is a reasonable course of action.

meer53

If you've been trying to repay this overdraft for the last 10 years, i'm surprised they've not withdrawn it before now !

They won't let a situation go on indefinately. You need to discuss it with their collections department.

mwddrwg

Luckily it's not an account that is used to pay in my wages. It's just the account I used at university which I haven't actively tried to reduce the balance other than repaying what I can afford over and above their interest rate they charge me. They didn't mention any extra charges being levied from yesterday due to removing the OD facility but I have a feeling that's a surprise which will come in due course

FireWyrm

If you've been doing this for 10 years, you've paid back £1800, nearly three times what was owed. I'd be inclined to tell them to get a ticket and go to the back of the line. You'll pay them when you're good and ready - and I'd do it in a letter setting out what you have paid and what they have 'taken' in interest during that time, and invite them to explain themselves to OFT and the Financial Ombundsman.

mwddrwg

FireWyrm - that's tempting, but I suppose I could have paid more when I was more flush but haven't been able to up the payments since the kids arrived 7 years ago.

Just had a text from HSBC asking me to ring them...intruiging...will ring them when I get home and let you know what they said