HSBC asking for repayment of overdraft

FireWyrm

What you could or could not have done in the past 10 years is beside the point. If you had simply defaulted, your sentence would have lasted only 6 years. If you had gone bankrupt, you would have been free in 1 year, but you didnt. You carried on faithfully paying and you have, to date, paid them nearly THREE times what was originally owed. I think you've done your bit and I'm pretty sure a court would take the same view.

Ring the bank, point this out, tell them what you have paid and that since they have withdrawn the 'service' you have decided your obligation is complete. They might see sense and write it off, but if they dont, I would be writing a stiff letter requesting that it was anyway. It's simply ridiculous and unreasonable to hold this around your neck for 10 years and more.

AndyPanned

badger_ wrote: »

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.

what he/she said

paulmapp8306

FireWyrm wrote: »

Ring the bank, point this out, tell them what you have paid and that since they have withdrawn the 'service' you have decided your obligation is complete. They might see sense and write it off, but if they dont, I would be writing a stiff letter requesting that it was anyway. It's simply ridiculous and unreasonable to hold this around your neck for 10 years and more.

Not sure it will hold any water with OFT. The "service" has only just been removed and nothing has been paid since that time (well maybe one £15 payment). This has not been "hanging over" anyone for 10 years, it was an agreed OD - NOT a defaulted loan.

There was an agreed overdraft in place on the account, which would have been charged at an interest rate in the terms and conditions of the account and possibly an annual agreed overdraft fee. The account was never defaulted on as the agreed overdraft was never exceeded, and has been run just like any other account and not considered a debt as such. The bank has done nothing wrong - it was never a defaulted on debt for the "6 years sentence" doesnt come into play.

What has happened now is they have reviewed the account, and decided there is not enough being paid into the account to warrant the overdraft facility. Having done that, and informed the holder (as they can do) the money outstanding is no longer an agreed overdraft and as such requires paying immediately. If that cant be dont - THEN the amount owed becomes an unpaid debt. initially you will get charged a HIGH amount for borrowing over your agreed limit (which is now £0). That can amount to £35 per month PLUS a much higher rate of interest. After a while the debt will be registered as defaulted on your credit file and passed to a collections agency.

What I would do is IMMEDIATELY tell them you cannot pay. Ask them to default the debt immediately and suspend interest on the account. Send them an SOA showing your other debts along with your income/outgoings and make them an offer in line with those figures (probably what your already paying). At least you should get the interest frozen and charges stopped (before they are applied) - then you can make inroads to clearing the actual debt.

If you ignore it - your debt to them will rise considerably before anything else happens.

What i will say - is if they have been taking £9/month in charges and you have been paying £15 - thats still £6/month or £72/year. 10 years later you SHOULD have paid off £720 which is more than the £650 OD. im assuming there was an agreed overdraft fee in the T&C accounting for 1/10th/year of what they say you now owe. Might be worth asking for a full breakdown for the account over the last 10 years including all interest, charges and payments - along with a copy f the original T&Cs.

mwddrwg

paulmapp8306 wrote: »

Not sure it will hold any water with OFT. The "service" has only just been removed and nothing has been paid since that time (well maybe one £15 payment). This has not been "hanging over" anyone for 10 years, it was an agreed OD - NOT a defaulted loan.

There was an agreed overdraft in place on the account, which would have been charged at an interest rate in the terms and conditions of the account and possibly an annual agreed overdraft fee. The account was never defaulted on as the agreed overdraft was never exceeded, and has been run just like any other account and not considered a debt as such. The bank has done nothing wrong - it was never a defaulted on debt for the "6 years sentence" doesnt come into play.

What has happened now is they have reviewed the account, and decided there is not enough being paid into the account to warrant the overdraft facility. Having done that, and informed the holder (as they can do) the money outstanding is no longer an agreed overdraft and as such requires paying immediately. If that cant be dont - THEN the amount owed becomes an unpaid debt. initially you will get charged a HIGH amount for borrowing over your agreed limit (which is now £0). That can amount to £35 per month PLUS a much higher rate of interest. After a while the debt will be registered as defaulted on your credit file and passed to a collections agency.

What I would do is IMMEDIATELY tell them you cannot pay. Ask them to default the debt immediately and suspend interest on the account. Send them an SOA showing your other debts along with your income/outgoings and make them an offer in line with those figures (probably what your already paying). At least you should get the interest frozen and charges stopped (before they are applied) - then you can make inroads to clearing the actual debt.

If you ignore it - your debt to them will rise considerably before anything else happens.

What i will say - is if they have been taking £9/month in charges and you have been paying £15 - thats still £6/month or £72/year. 10 years later you SHOULD have paid off £720 which is more than the £650 OD. im assuming there was an agreed overdraft fee in the T&C accounting for 1/10th/year of what they say you now owe. Might be worth asking for a full breakdown for the account over the last 10 years including all interest, charges and payments - along with a copy f the original T&Cs.

Thanks for taking the time to write this long reply.

I have been paying £15 every month for as long as I care to remember and they have been charging interest at between £9 and £12 every month. The limito of the account was much higher than it is now - they reduced the limit to £750 when I'd reached that level of OD.

I phoned them back yesterday and got through to their collections dept. After arguing the toss for about 30 minutes and stating clearly that I cannot afford any more than £15-20 a month the operator tried to put me through to their financial management team who go through all your finances with you. At this point I was cut off so might ring them back today. I have already provided an SOA to my local branch who have scanned it onto their system so they know what my income/bills are. I made it clear that I'm willing to pay it all off - just not as quickly as they want as I can't afford to. They're making £10 a month from me so why they don't want my charges for as long as possible is beyond me. I pay back at a rate I can afford, they win by gaining interest charges - win-win as far as I can see!