HSBC is this a big con they are pulling over me, maths brains are needed

mickmaddy

Hi folks can somebody out there please tell me if these figures add up from an old loan I had with HSBC.

Amount of loan £9700
PPI £1860
PPI INSURANCE £460.39
Charge for interest £2400.94 @ 11.9% over 48 months
Total 14421.33

1 payment at £300.15 then 47 @ £300.45

Now here's the part I would like somebody to figure as I cant and nor can my friend who is a maths teacher.

I made 15 payments of £300 which totals around £4509, the reason for only 15 payments was I wanted the PPI removed.

HSBC Gave my an end balance of £9175.75 but said they would refund me back £787 from the PPI which leaves £8610. Is this right, so from me paying back nearly £4500 i have only paid back around £1000 of my debt.

I am trying to claim back all of the PPI but thats a different issue and will keep people informed if I win etc. They said that my loan was like a mortgage and that I only pay the interest and all the PPI in the start of the loan. I know HSBC puts everythink onto at the start of the loan but what the hell is going on. In page 2 of my loan agreement it clearly states that if I had paid a quarter of the loan the end balance would be £7808.22 have I been ripped off. Where has all the other money gone or have they just made me pay dearly for closing the loan early.

Thanks for you help Mick

PS good luck to anybody trying to get bank charges back I did before the suspension of cases.:T:eek:

scotsgirl_3

Hi

Are your payments up to date at the moment? How far into the loan period are you(i.e. when was it taken out)

You mention that page 2 of your loan agreement gives you figures for ending the loan after you have paid a quarter. Does this definitely include your PPP? this is often on a "second schedule" which may mean that the figure they give then needs the PPP on top which could explain the discrepency

Sorry for all the questions

gordo43

HSBC (as do most other lenders) make sure that in the early months of your loan a greater weighting is given to paying off the interest first, and less of the capital borrowed. Of course, by the end of the loan this has changed and you are paying back barely any interest and the majority capital. PPI works the same way the bank argue that because you owe a greater sum at the start of the loan (and are therefore a greater possible risk should you enter into a long term PPI claim) a greater proportion of your PPI premium is paid to align with this risk at the beginning.

So... unfortunately mickmaddy the sums look about right, unless you can come up with some proof that you shouldn't have been sold the PPI to begin with and enter into discussions with the bank - I take it thats what you are doing at present? Did you sign a PPI declaration / go through a factfind with the sales advisor when you took the loan out? This should always be done now as is compulsory.

[Deleted User]

Another bank con...

They are getting exposed left right and centre this year.

The public must be getting wise to there devious ways.

CLAPTON

I'm guessing but it might be like this

loan 9700 at 11.9% over 48 months

so repayments are about 252 per month

and after 15month balance should be about =7123 but add two months interest as penalty for early settlement = about 7,256

now PPI is 1860 which they lend you at 11.9% interest so total interest is 460
so monthly payment for PPI is about 48
per month

which gives your actually monthly payment of about 300.


So i think you have been charged as follows

settlement figure on loan about after 15 months is 7,256 (and in line with CCA guidelines)

but they add the full cost of the PPI = 1860+460=2320
less discount of a misery 787 giving 1533

so total settlement figure is 7256 + 1533 = 8789

which while not exact is approximately how I think they have worked it out.


the figure of 7808 for settlement after a year is almostly certainly for the loan only and not the PPI

Have to been ripped off?
Well yes, but its probably legal as the CCA regs dont seems to apply to the PPI element but it's a grey area.

jay78

gordo43 wrote: »

HSBC (as do most other lenders) make sure that in the early months of your loan a greater weighting is given to paying off the interest first, and less of the capital borrowed.

Sounds like rule 78, which has been abolished.

mickmaddy

Thanks so much for everybody's help, I think I have a better picture of how they have charged me.

Just a bit of back ground to all is this loan dates back from July 2005 and was taken out over the phone. When I went to my branch to sign paperwork the PPI was added and I did ask for it to be taken off but the sales women said it was part of the loan. As I needed the loan I signed the paperwork. After about 2 months I call HSBC customer services to cancel but again told it was part of the loan. Well in Jan 2006 I did go into the branch spoke to the same women who completed the loan paperwork and she said the same thing. No I had to keep the PPI and she said she would have to go and get the bank manager about this. That seemed like a sort of threat like I was a naughty school child and she was getting the head master.lol anyway it still was not removed and the women said I would have to take out a new loan and she was unsure as I might not get another loan.

I just left and made a complaint about the way I was dealt with. All that happened was I was sent a letter saying sorry blah blah no PPI removed.

I think over the next few months Ive called HSBC about 5 more times and told the same thing no. So in Oct 2006 I visited the branch again as I just could not affort the £300 monthly repayment and again spoke to this women. Again it was not removed and made again another complaint but threaten legal action I did read that the PPI was optional. The branch manager got involved and the PPI was then removed.

The other day I was looking over the old loan agreement and read on this site about PPI and I do thing I was mis sold. I have an ongoing complaint now with HSBC and about to sent them a letter as well. Ive also spoke to the FOB and they will help but I know of course HBSC has 8 weeks to respond

What do you guys think, HSBC does have 2 complaints on there system that I made and it does say that I wanted the PPI removed and I am not sure yet if they have other records when Ive call for PPI cancel information.

Thanks again for you help.

PS i am not afraid to take HSBC on as last Dec I claim back £1800 in charges.

CLAPTON

Don't asssume they have any complaints on their system unless you have complained in writing.
Write (obviously sending by recorded delivery and keeping copies) briefly summarising the full situation especially about being adviced that the loan was dependent upon taking the PPI.