HSBC - irresponsible lending

jmenzies

I will say this with my tin hat ready, because a large part of this was clearly my fault, but I thought I would share details of a complaint I made to HSBC and the outcome.

HSBC was my student bank during my three years at university. I had the £500 credit card, a £2000 overdraft (interest free) and no job. Over the three years I did work during some holidays part time, but due to personal circumstances (family illness related) I ended up having to use my overdraft and my credit card to cover living costs.

Over my three years course HSBC increased my credit limit from £500 to £12,000 without any requests from me. Being rather irresponsible and having a lot of problems, I slowly but surely racked up a lot of debt on the credit card with an interest rate of 15% APR.

2 years after graduating and still slowly trying to clear the debt and having become a bit more wise to the world of banks, credit ect, I decided to write to HSBC and blame them for irresponsible lending. I asked that the card's interest rate be frozen at 0% until it was cleared, I estimated that would take me 48 months.

They agreed, having looked back at the process under which my credit was automatically increased, that they shouldn't have extended me such a large credit line. They accepted and applied a 48 month 0% rate to my account (no fees for doing so obviously). I am pretty close to repaying it now.

I probably had no leg to stand on and I know I was to blame and they may well have had a very good argument for telling me where to go, but I thought I'd share this experience and "victory" so others who have had similar situations can give it a go.

[Deleted User]

You were very fortunate. Has this been recorded as an arrangement on your credit files, or are they clean?

Remember next time though, if you don't want the increase, just tell them no.

CLAPTON

jmenzies wrote: »

I will say this with my tin hat ready, because a large part of this was clearly my fault, but I thought I would share details of a complaint I made to HSBC and the outcome.

HSBC was my student bank during my three years at university. I had the £500 credit card, a £2000 overdraft (interest free) and no job. Over the three years I did work during some holidays part time, but due to personal circumstances (family illness related) I ended up having to use my overdraft and my credit card to cover living costs.

Over my three years course HSBC increased my credit limit from £500 to £12,000 without any requests from me. Being rather irresponsible and having a lot of problems, I slowly but surely racked up a lot of debt on the credit card with an interest rate of 15% APR.

2 years after graduating and still slowly trying to clear the debt and having become a bit more wise to the world of banks, credit ect, I decided to write to HSBC and blame them for irresponsible lending. I asked that the card's interest rate be frozen at 0% until it was cleared, I estimated that would take me 48 months.

They agreed, having looked back at the process under which my credit was automatically increased, that they shouldn't have extended me such a large credit line. They accepted and applied a 48 month 0% rate to my account (no fees for doing so obviously). I am pretty close to repaying it now.

I probably had no leg to stand on and I know I was to blame and they may well have had a very good argument for telling me where to go, but I thought I'd share this experience and "victory" so others who have had similar situations can give it a go.

you have probably trashed your credit record as any arrangement will stay there for 6 years

agrinnall

I think you're probably right that there was an element of fault at HSBC, and I'm glad to see that you acknowledge a considerable degree of responsibility on your part, but I feel that Irresponsible Borrowing would have been a more appropriate thread title.

Paully232000

Good that you are on the way to sorting it, and I feel, based on what you have said, that you were very lucky for HSBC to agree to this.

I cant see from what you have said how this is anything other than your own fault, possibly they shouldnt have upped your limit, however, they did and you didnt have to spend it.

Hope it all works out in the end, you pay it off eventually, learn from it, and eventually are able to obtain credit in the future.

jmenzies

No this didn't alter my credit record - it had nothing to do with my ability to afford the debt so wasn't an arrangement - I made this very clear when corresponding with them and this was done about two years ago and I regularly check my credit rating which remains excellent.

One thing that I did omit, and no doubt made a big difference, is I actually declined one of the first increases by calling them and saying I didn't want it and subsequent increase letters were sent out to my home address, rather than the term time address I provided them with.

knightstyle

Just to say well done for getting to grips with your debt. If more people acted like you there would be a lot less people in serious financial trouble. As soon as it is all paid off have a holiday, you deserve it!