Defaults! Stupid HSBC!

MikeAUK

Guys quick summary.

-I had a CC with around £440 on it
-Paid it all off in May, told by HSBC over phone that I wanted card cancelled and account closed. I ask them to confirm the balance was now zero, they confirmed this.
- The card was removed from my online banking, I don't recieve paper statements anyways due to having a "green" account so thought no more of it. I cancelled the direct debit I had set up to pay it off monthly.
- Then on August 7th I get a letter saying I defaulted twice for amounts of £1.06 and £1.07.

I paid this as soon as letter arrived but now am concerned my credit file has taken a dive. I called HSBC and they said it was some interest that was added when account was closed....this seems really unfair.
HSBC confirmed that the account was closed and did not notify me that any outstanding charges needed paying. They even confirmed to me over the phone it was now settled.

HSBC have advised me to contact Experian but I don't really know what to do. Can these be removed? HSBC even said they understood my fustrations. What more could I have done than pay it off and ask for confirmation of it being closed....I could easily have afforded to pay back the £1.06 and £1.07 I defaulted for. Does it even show on a credit file the amount you defaulted over? How serious are defaults on your file and when do they expire?

Grrr

Cheers,
Mike

fermi

Well, Experian will simply mark the defaults as disputed and query them with HSBC. So worth doing, but ultimately it is passing the ball back to HSBC and Experian may well no joy either.

Also place a notice of correction.

But complain again to HSBC. It is their responsibility to sort it if these defaults were applied unfairly, not Experian's.

If they don't sort it then complain via the FOS and ICO.

Defaults last for 6 years and badly mar your credit record, so if you think these are unfair then complain again and take the complaint forward via official channels if you get stonewalled.

bargainbetty

Open a formal complaint with HSBC. Advise them in writing that you feel the defaults were unfairly applied and you were given no information about the monies owing or the ability to resolve them before default.

State that you require the defaults to be removed due to the inappropriate nature of their application and ask that they do so immediately.

You can't do the ombudsman until you have complained to the bank - eight weeks from the day of complaint. If you make enough of a stink with HSBC (politely at first) you might find they remove them anyway.

MikeAUK

Guys what do you think of the below to send?

Dear HSBC,
I recently received the attached letter dated 7th August 2012 with reference to two defaulted payments on my Credit Card number xxxxxxxxxxxxxx. The letter indicates that I have twice failed to pay off the remaining balance of my card, just over £1 by the due date.
I called HSBC in May before either of these two payments were due and asked you to close my Credit Card account. At this point it was confirmed to me that there was no outstanding balance and at that point the card also disappeared from my online banking account. I specifically asked the Customer Service agent to clarify that my account was now fully settled which he confirmed. I therefore closed my direct debit I had set up and cut my card up. At this point HSBC removed the card from my online banking. I have a “green” paperless account which also meant there was no means by which I could check that any additional charges needing paying. It is also worth noting that I recieved no notification of any default in July until the default in August



I have now made a payment of £1.08 to the account but am extremely frustrated that these defaults have occurred despite me clarifying with your Customer Service team that my balance had moved to zero and that no further payments were required. I am concerned that my credit rating will now be affected, especially as in the next year I was hoping to take at a mortgage with HSBC who I have banked with for nearly 10 years.



Having spoken to xxxxx from the Advance team on 19/08/2012, he understood that the circumstances surrounding these defaults were not my fault. Upon account closure I had no reasonable means by which I could have expected to meet these late charges of £1.06 and £1.07 which were only added when the card was removed from my online banking and the account was closed.
I would please request that as a loyal HSBC customer you formally contact Credit Referencing Agencies to fully remove these defaults from my Credit History. They are not an accurate reflection of my banking history and I have been unfairly penalised. Please can you confirm your intention to undertake such action by corresponding formally to me at the above address.

Lensman_2

There is another way of putting it.

Dear Sirs.

OFFICIAL COMPLAINT

I note that you have defaulted me for sums due, subsequent to my satisfactory payment and closing of the account on XX/XX/XX. That no further sums were due was confirmed by the representative on the telephone call at that time.

Your are therefore required to do the following:
1. Explain how the sums became due after you assured me that all sums due had been paid by me. I require not only your justification, but an explanation as to how your procedures allowed this to happen.
2. Explain how these sums became defaults without writing to me and allowing me to correct them with fair notice.
3. Explain how your conduct is compliant with the Banking Code of Business sourcebook and OFT guidelines.
4. Apologise
and
5. Remove any record of the default that you have placed with the credit reference agencies.

Non compliance with any of the above requirements will result in complaints to the regulatory authorities and may result in legal action on my part for compensation for recording an inaccurate record on my credit file. Compensation in such cases typically amounts to £5,000.

I require a resonse within 7 days that includes your plan for dealing with this complaint and a copy of your complaints procedure.

For the abundance of clarity, I consider that you have behaved with extreme unfairness. If you do not resolve the above completely, I will prosecute complaints and action accordingly.

MikeAUK

Thanks mate, but would you really be so extreme?

I wondered if a gentle approach was the right way forward to start with?

Do banks respond well to letters like yours? Does it not just make them more inclined to screw me over?

FYI the £1.06 was charged to my account after closure. It was some interest on a cash advance. I was however not notified of this, I had no way of accessing the account online and I don't recieve paper statements. I literally have no idea how they could have expected me to pay it...it seems so unfair that I'm going to be stuck with defaults for this....

Lensman_2

Perhaps you could be a bit more gentle, but I would recommend that you don't give them too much wiggle room or they will use it.

I do believe that they have treated you unfairly. I think you should say so, loud and clear. (In good faith, you closed the account and you confirmed "no sums owing". Clearly their mistake and they should have written off those sums).

I also think you should head your letter "COMPLAINT". They have a duty to investigate a complaint and you can elevate it to the FOS if they fail to resolve it after 8 weeks.

Have they actually recorded defaults on your credit reference file? (You can check with Noddle - it is free for life). If so, they have seriously broken the rules. However institutions do not remove default notices lightly - even if wrongly applied - and may need more pressure than a gentle request.

Please check your credit file and confirm.

Experian_company_representative

Lenders can't register a £1 default. It's more likely they have registered a few late payments, if anything at all. Best to get hold of your credit reports to check this, then you know exactly what you're dealing with. If you do this and find data you disagree with, you can ask the CRAs to dispute it with the lender for you.

James Jones