Questionable Loan Handling

Silmaril

Hi,

I recently sent my bank, HSBC, a SAR to look at PPI (though ten years old, will let you know how that goes) and found that their handling of my loan account is questionable at best.

The loan started its life as a personal loan with an APR (i believe) of around 8% but i later ran into some difficulties and was forced as i see it into a Managed Loan which doubled the rate of interest.

So, in my SAR i expected to see;

Original documentation
APR of personal loan
APR of managed loan
etc..

However what i found was their records seem to show that i have had a managed loan at the rate of 15% APR since inception. Its rather complicated to digest but there are also other loans on their, ie. different account numbers but no individual history associated with them

2 x Personal Loans
2 x Managed Loans

But they are all for the same loan.

I feel that i was forced into the managed loan and that this is the cause of the problems i have had, I have only just been able to clear this loan after being fortunate enough to land on my feet with a new job. a £3,000 loan cost me in total £8,100.

I had previously explained my situation and requested that they freeze the interest however unlike my other creditors they refused. This loan would never have cost me that amount of money had it remained at the original rate - For a long time due to the level of payments i was forced into (£29/pcm) it felt like it was an interest only loan!

Is there anything i can do about this? I feel that they have greatly taken advantage of my situation and want to fight them to get some of this interest back (along with the PPI which I am certain i said no to when asked!)

Any advice greatly appreciated, please ask if you need more information - I have several thousand A4 sheets of the stuff which they hold on me!

~SiL

P.s. SAR your bank! It may just make you want to move somewhere else if you have the slightest bit of bad history, i certainly will be!

Clive_Woody

Not sure what you mean by 'Managed Loan'?

You started off with a loan and then couldn't make repayments so they refinanced the loan over a longer term but at a higher APR. Is that right?

I would guess the higher APR was because they now rated you as a higher risk (because you couldn't repay the original loan). Refinancing it over a longer term worked in your favour allowing you to pay it off more slowly.

They are under no obligation to freeze interest or everyone would ask them to do this.

On the plus side you should be able to get any PPI back.

Silmaril

Managed Loan is what HSBC refer to it as, Basically its a loan where by the payments were set up and could not be amended or cancelled by myself at any point. I wasn't offered this, i was literally told i have to have this.

I have had another loan and ran into difficulties with that however in that instance i was able to stop the payments and pay them on my terms at a fair rate. This led to a default in the end.

I could have defaulted on that HSBC loan were i not forced into the managed loan and therefore i would have paid interest at the rate i signed up to until the point where i defaulted and the debt was frozen.... They made this impossible and made me incurr more costs.

It has taken me far longer to pay this back than it would have had it been left as the original agreement and been paid back or been left at the original rate and then defaulted, I feel they must have known this and so forced me into this agreement which i did not want or ask for.

Silmaril

Also, as the payments could not be amended or cancelled by me there were many times where they charged me for the failed payments, i was able to get some of these charges back but still i feel this is all part of the same plot, putting me in a position that has taken me 10 years to crawl out of and i still have the aftermath to deal with

iolanthe07

You may struggle witha PPI claim going back ten years. The bank may use the Statute Barred get out that many of their customers use on them. Statute Barred works both ways.

Thrugelmir

Silmaril wrote: »

It has taken me far longer to pay this back than it would have had it been left as the original agreement and been paid back or been left at the original rate and then defaulted, I feel they must have known this and so forced me into this agreement which i did not want or ask for.

Did you ever bother read the small print of the loan agreement (i.e. contract) that you signed up to.

Banks are a business and lend money on commercial terms. I doubt they actually forced you to do anything. They made an offer which you accepted. Given your position and the fact that your were incurring the bank additional unbudgeted for expenses. The lender is well within their rights to recoup the cost as a matter of principle. No different to any other business.

poppasmurf_bewdley

Silmaril wrote: »

Managed Loan is what HSBC refer to it as, Basically its a loan where by the payments were set up and could not be amended or cancelled by myself at any point. I wasn't offered this, i was literally told i have to have this.

I have had another loan and ran into difficulties with that however in that instance i was able to stop the payments and pay them on my terms at a fair rate. This led to a default in the end.

I could have defaulted on that HSBC loan were i not forced into the managed loan and therefore i would have paid interest at the rate i signed up to until the point where i defaulted and the debt was frozen.... They made this impossible and made me incurr more costs.

It has taken me far longer to pay this back than it would have had it been left as the original agreement and been paid back or been left at the original rate and then defaulted, I feel they must have known this and so forced me into this agreement which i did not want or ask for.

As far as I am aware, there is no requirement for the bank to freeze the debt on default. They can still charge interest and fees.

The option to stop making payment into the loan account was also open to you at any time. The bank couldn't force you to make payments.

opinions4u

So you had a debt at 8%.

You couldn't afford it and, to help you, they extended the term as a "managed loan". As you were now a higher risk they increased the rate. But payments were more affordable.

You now seem to think they should have let you off paying?

This loan would never have cost me that amount of money had it remained at the original rate

But you couldn't afford your contractual monthly payment. So this is irrelevant.

- For a long time due to the level of payments i was forced into (£29/pcm) it felt like it was an interest only loan!

Did you ever consider paying more?

DevCoder

Silmaril wrote: »

Managed Loan is what HSBC refer to it as, Basically its a loan where by the payments were set up and could not be amended or cancelled by myself at any point. I wasn't offered this, i was literally told i have to have this.

Managed loans are the way a bank helps you out but the rules and payment structure is stricter. You could have canelled (not paid) the loan amounts, this would have led to the loans being defaulted and then the entire lot being asked back, prbably via the courts and a CCJ.

I have had another loan and ran into difficulties with that however in that instance i was able to stop the payments and pay them on my terms at a fair rate. This led to a default in the end.

I could have defaulted on that HSBC loan were i not forced into the managed loan and therefore i would have paid interest at the rate i signed up to until the point where i defaulted and the debt was frozen.... They made this impossible and made me incurr more costs.

As mentioned, banks do not have to freeze interest or charges.

It has taken me far longer to pay this back than it would have had it been left as the original agreement and been paid back or been left at the original rate and then defaulted, I feel they must have known this and so forced me into this agreement which i did not want or ask for.

No the bank was helping you out of your financial mis-management.

Apples2

Silmaril wrote: »

P.s. SAR your bank! It may just make you want to move somewhere else if you have the slightest bit of bad history, i certainly will be!

I can't see any banks queueing up for your custom with your history of not repaying but good luck with that.

jonesMUFCforever

Silmaril wrote: »

Also, as the payments could not be amended or cancelled by me there were many times where they charged me for the failed payments, i was able to get some of these charges back but still i feel this is all part of the same plot, putting me in a position that has taken me 10 years to crawl out of and i still have the aftermath to deal with

You could have at any time paid off what you owed HSBC.
All you had to do was get another loan to pay them off - what do you mean you could not get another loan? Surely you would have had loan companies throwing money at you - oh yeah you didn't pay back what you borrowed did you? So who's fault was it again?