ppi repayment by HSBC to a settled account thats closed??

mmmagazine

I need some help here. Bare with me, its a little long winded but could effect many people making claims.

I had a claim against a £1500 loan of over 10 years ago with HSBC. The loan was settled years ago, however, HSBC have admitted they mis-sold ppi to me as I was self employed and would pay £496. Thats the good news. But wait

I had a credit card with them that was in arrears for the last 5 years and I was paying back monthly through Metropolitan Collection Service (as we all know its HSBC's own collection company). Last May, I offered a £2500 payment to settle the £3500 outstanding debt. They accepted this and I have in writting that the account has been settled and closed. However, the ppi repayment, I am told, will be paid into the Credit Card Account because they reckon they can do this under clause 19?? They say even though the account is satisfied on the credit card, they can still pay back any monies into that account as the initial £3500 was not received and when settled there was a shortfall of £950. Surely, If they agree the credit card account has been settled, then they cant do this? The ppi repayment was to do with another product (ie the loan).

Can I demand payment back to myself? They say they will fight this all the way and have a right to set it off against the credit card account. I've argued this point on the phone but they are sticking to their guns. Any suggestions as to what I can do?

Nigel:(

dunstonh

Surely, If they agree the credit card account has been settled, then they cant do this?

Yes they can. An agreement for them to not chase you for the amount you havent paid does not entitle you to receive money from them later. They are allowed to use the redress against debts in arrears, defaults or amounts written off as part of a settlement.

That said, just recently there was an unusual case at the FOS where they ruled the bank couldnt use the right of set off. So, whilst generically, they can use that rule, there are certain times they cannot.

If they are using the right of set off then they should keep the capital element and return the interest element to you.

-taff

You made a complaint about PPI on your credit card too didn't you? How did that go?