HSBC inserted delayed payment in Credit History for account overdrawn

TheEnglishMan

Once I had account overdrawn and HSBC, obviously, charged for it. I had letter communications with me and got back partial refund though not full.

However not only they charged but also they put a Delayed Payment (Yellow) Mark in my credit file (Both in Experien and Equifax)

I again sent them few letters and argued that this is disgusting and they have to remove it but they didn't oblige.

They send a final letter highlighting the terms and conditions under which they have done so. I've gone thru all these t&cs but can't find if any of them indicate that they can put delayed mark in Credit file.

I want to get it removed ASAP as my credit rating is affected. And apart from other (Read my other post on Barclays) my history is clean no delayed payment.

How to deal with this?

I hesitate to proceed with FOS as they are too slow. Last time I dealt with them they took over 1 yr to resolve the case and that too they took favor of bank.

Graham_Devon

I've never heard of this. However, that is what credit reports are for. If you did delay payment, then other establishments have a right to know about it.

Just like if I miss a credit card payment, they will say I missed it, which I did.

TheEnglishMan

Graham_Devon wrote: »

I've never heard of this. However, that is what credit reports are for. If you did delay payment, then other establishments have a right to know about it.

Just like if I miss a credit card payment, they will say I missed it, which I did.

Sorry if I didn't make it clear that it is my Current Bank Account.

Delay payment for Credit Card can be understood but how can overdrawn account can be qualified for delay payment?

Also it is logical if someone say hey you owe me money and you need to pay to me by this date and if you don't pay by this day then it will be considered as delay payment like in credit card. you get statement which says you have to pay it by this date if you don't pay then it is case of late payment.

And in my case I paid back whole amount in less than a week.

I'm still exploring the rules but it doesn't seem to me that they can mess up with my credit file for account overdrawn.

Graham_Devon

TheEnglishMan wrote: »

Sorry if I didn't make it clear that it is my Current Bank Account.

Delay payment for Credit Card can be understood but how can overdrawn account can be qualified for delay payment?

Also it is logical if someone say hey you owe me money and you need to pay to me by this date and if you don't pay by this day then it will be considered as delay payment like in credit card. you get statement which says you have to pay it by this date if you don't pay then it is case of late payment.

And in my case I paid back whole amount in less than a week.

I'm still exploring the rules but it doesn't seem to me that they can mess up with my credit file for account overdrawn.

If it's just an overdraft on your current account then it does seem extremely strange!

MarkyMarkD

I presume that you mean you have a "1" in your payment status codes on your credit report? If so, Experian's site explains what these mean in the context of current accounts:

Current account status codes The status codes lenders use on current accounts can have a different meaning to those used on other accounts. This is because current accounts are more flexible than other types of credit. For example, you may not have to repay your overdraft at a set rate each month. The information on your credit report shows the status of your account when the lender last updated our records.
Your overdraft limit is the largest overdraft the lender has agreed you can have.
Your overdraft balance shows how much your account is overdrawn by. If your account is not overdrawn, your credit report will show that your balance is zero. If your overdraft balance is higher than your overdraft limit, the lender might use status codes to show that you are outside the terms of your agreement.
The following table gives you some examples of when lenders may use each status code on current accounts. Before deciding which status codes to use, lenders will often use their own internal systems to estimate the risk associated with the accounts.
<table title="Explanation of credit account payment history codes" width="70%"><tbody><tr><th>Status Code </th><th>Meaning</th></tr> <tr><td class="centered">0</td><td>

• Your account is in credit.
• Your account is not overdrawn.
• You are managing your account within the terms of your agreement.

</td></tr> <tr class="shaded"><td class="centered">1</td><td>

• Agreed repayments are one to two months behind.
• Your overdraft balance has been greater than your overdraft limit for one to two months.
• Cheques, direct debits and standing orders may have been bounced to keep the account in order.

</td></tr> <tr><td class="centered">2</td><td>

• Agreed repayments are two to three months behind.
• Your overdraft balance has been greater than your overdraft limit for two to three months.
• Cheques, direct debits and standing orders may have been bounced for a second month to keep the account in order.

</td></tr> <tr class="shaded"><td class="centered">3</td><td>

• Agreed repayments are three or more months behind.
• Your overdraft balance has been greater than your overdraft limit for two to three months.
• Cheques, direct debits and standing orders may have been bounced for a third month to keep the account in order.

</td></tr> <tr><td class="centered">4 - 6</td><td>

• Agreed repayments are more than three months behind but you have agreed new repayments with the lender to bring the account in order.

</td></tr> <tr class="shaded"><td class="centered">8</td><td>

• Your overdraft balance has been greater than your overdraft limit for more than three months and you have not agreed new repayments to bring the account in order.
• The lender has decided that you have broken the terms of your agreement and has told you that your account is now in 'default'.
• The lender has closed your account.

</td></tr> <tr><td class="centered">U</td><td>

• Your account has just been opened.
• Your account is more than three months old, has a zero balance and has not been used in the last month.

</td></tr></tbody></table>

So "1" can just mean that you've had payments rejected in order to keep the account in order, or basically anything which made your account be overdrawn.

What exactly did you resolve with HSBC, given that you didn't get all your charges back?

Banks can all record information on credit reference agencies with respect to account conduct in breach of terms & conditions; it would seem that's why HSBC have done so and are right to do so in your case.

TheEnglishMan

Thanks GD and MMD for reply.

MMD the 1 is the mark and thanks for providing explanation from CRA. I should have read it.

I don't have overdraft facility and my account went into debit resulting in a number of rejected payments for which HSBC charged as many times as it payment were rejected. I restored my account back to credit in just 12 days.

I'm new to this forum and what I communicated to HSBC was based on my own intuition and common sense without mentioning any Law as I was not aware of the same. I've been doing the same for quite some time and in most cases it worked sometimes fully sometimes partially.

I just finished drafting a letter based on the template provided in http://www.consumeractiongroup.co.uk in which I mentioned the rules this time

However I think I need to hold my horses as you guys are clearing the clouds and I may require further help.

HSBC charged £100 for the various rejected payments. £50 they refunded as goodwill.

£50 remaining, I never accept partial claims and so case is still open.

For £50 refund I think I can send them letter as per templates provided on http://www.consumeractiongroup.co.uk.

For removing the default register from credit file I need more help..
What should be my wordings to get it removed?

I've been reading to HSBC T&C and just found that they have a clause in section 2.2.4 of Personal Banking T&C which says that they can register default if they demand for repayment and if their demand is not met withing 28 days. This is the clause which comes closer to my case. This clause and few others were highlighted by them when they replied to my letter.

I'm not sure if this clause covers my case or not. I can't find any other nearest clause to cover this case.

Any further help?

MarkyMarkD

You made payments when you didn't have funds.

There's nothing wrong with HSBC's credit reference agency reporting on your account.

I don't see any reason why they should remove these marks - they are correct.

Registering a default is far more significant than registering a "1" and the clause in your Ts & Cs refers to that, not to registering a "1".