I am a keyworker and Hsbc have left me penniless

robbiec4

eskbanker said:

robbiec4 said:
the bank switch was completed on the day my wage got payed but was too late to go into my new Santander account. Once it went it to my hsbc account the closed my overdraft swiping £800 of my wage and sent over the remaining 200 credit to Santander. When I contacted hsbc they said they never received paperwork but when I asked step change about this they said hsbc are lying because it’s all digital and hsbc viewed my debt management plan to pay off my overdraft on the a week before my wage went in, cancelled my overdraft Taking the £800 and then declined the dmp offer the day after 

So because of the timing issue, your wage (which you presumably hadn't asked your payroll department to start sending to Santander?) went to HSBC, thereby putting your account in credit, and shortly thereafter they transferred the residual £200 balance to Santander and closed your account as an inherent part of the switching process (which they couldn't do if it was overdrawn)?  If that was the sequence of events then it's not clear to me that HSBC have done anything wrong, unless there was a clear agreement between you and/or Step Change and HSBC as to how and when your overdraft debt to HSBC was going to be repaid?

Due to the banks being shut and my appt being cancelled my sort code and account number for my new Santander account only came to me 3 days before my wage was due and was not enough time for the payroll dept to stop it going to hsbc. hsbc received my dmp from StepChange a week before my wage entered the account and it stated I would repay my overdraft monthly until it was cleared 

robbiec4

eskbanker said:

robbiec4 said:
the bank switch was completed on the day my wage got payed but was too late to go into my new Santander account. Once it went it to my hsbc account the closed my overdraft swiping £800 of my wage and sent over the remaining 200 credit to Santander. When I contacted hsbc they said they never received paperwork but when I asked step change about this they said hsbc are lying because it’s all digital and hsbc viewed my debt management plan to pay off my overdraft on the a week before my wage went in, cancelled my overdraft Taking the £800 and then declined the dmp offer the day after 

So because of the timing issue, your wage (which you presumably hadn't asked your payroll department to start sending to Santander?) went to HSBC, thereby putting your account in credit, and shortly thereafter they transferred the residual £200 balance to Santander and closed your account as an inherent part of the switching process (which they couldn't do if it was overdrawn)?  If that was the sequence of events then it's not clear to me that HSBC have done anything wrong, unless there was a clear agreement between you and/or Step Change and HSBC as to how and when your overdraft debt to HSBC was going to be repaid?

Step change told me Hsbc must have viewed the dmp before my wage entered the account or else they would not have activated the right of set off. Sorry if my wording is wrong but I have never been involved with these terms and how they work before 

Mrs_Ryan

If I remember rightly, first right of appropriation only applies to state benefits and certain ones at that (ESA, JSA and UC) as they are paid at the level that the government states you need to  live on. It does not apply to wage payments or unbelievably any other benefits (I had this row with Santander many moons ago when they took OH’s full wage in charges- they said they can take wage payments but they gave him back three months of DLA payments that they had also taken) 

eskbanker

robbiec4 said:
Due to the banks being shut and my appt being cancelled my sort code and account number for my new Santander account only came to me 3 days before my wage was due and was not enough time for the payroll dept to stop it going to hsbc.

Too late for your situation but for the benefit of others, this is yet another example of the dangers of rushing a switch through before being ready - it's always best to have the new account fully up and running, and properly tested with money in and out, use of online banking, etc, before initiating a switch.

robbiec4 said:
hsbc received my dmp from StepChange a week before my wage entered the account and it stated I would repay my overdraft monthly until it was cleared 

robbiec4 said:
Step change told me Hsbc must have viewed the dmp before my wage entered the account or else they would not have activated the right of set off. Sorry if my wording is wrong but I have never been involved with these terms and how they work before 

I'm no expert in the workings of DMPs but to the best of my knowledge it's not up to you or Step Change to inform HSBC of when you'd wish to repay the debt when trying to walk away from the account, but it needs to be agreed with them.  Ceasing to fund an overdrawn account with regular wages is always a red flag, which often results in immediate withdrawal of overdraft facilities, but Step Change should know that.

mwarby

OP have you spoken to HSBC yet ? If so what are they saying ? If you haven’t gently gently at first emphasise that you need money to live on, rather than they are wrong an you must get all the money now

OP do you have any withdrawals funds at HSBC, if so I’d transfer them now.

There are many things which could have been done better, but it’s a bit late now

stepchange IMVHO shouldn’t have made any contact with the old bank until the OP safely had his salary going in. As estbanker says it’s hardly something the banks agree too and they can’t be relied upon to act nicely 

colsten

Not that it helps the OP, but I think the problem was created by requesting a switch. A switch closes the old account after any overdraft has been settled. So it's not surprising to hear what has happened - this is how a switch is supposed to work.

What should have happened is

1. OP should have opened a new bank account
2. Once in possession of the debit card for, and online access to the new account, OP should have notified payroll to pay into the new account
3. in parallel, OP/their debt charity should have negotiated a payment plan with HSBC. The HSBC account should never have been closed in a rush.
   
   

Obviously all too late now. The only potential upside of what actually happened is that OP doesn't owe HSBC anything any longer.

In the short term, would the £500 interest-free overdraft (temporary, for 3 months) be of any help for you, OP? Please read the terms in detail, get back here if you have any questions.

sheramber

from HSBC website
If your new bank or building society agrees, bank accounts that include an overdraft can switch using the Current Account Switch Service. And if you’d like to have an overdraft with your new bank account, speak to your new bank or building society before starting your switch. 

You  would to have arranged for an overdraft on your Santander account and used that to pay off the overdraft at HSBC before 
switching.

mwarby

Tbh a switch is probably a bad idea, the bank know for 7 days your leaving, much better to get salary in and then move manually. Don’t get me wrong when leaving on good terms it’s fine, but a DMP or insolvency your typically not doing so

Once the money you need to live off and pay for life’s essentials your safe. Moving direct debits manually doesn’t take that long and gives you the chance to avoid moving any you don’t need (you don’t want say a credit card trying to take full payment)

born_again

colsten said:

In the short term, would the £500 interest-free overdraft (temporary, for 3 months) be of any help for you, OP? Please read the terms in detail, get back here if you have any questions.

Will this apply to basic bank accounts that have no O/D facility?

https://www.fca.org.uk/publications/guidance-consultations/overdrafts-coronavirus-firms

>>Where a firm provides an arranged overdraft to a customer, and the customer has difficulties with their finances, or reasonably expects to have difficulties with their finances, due to the impacts of coronavirus, the firm should, at the customer’s request, assist the customer in the following way.

No interest should be payable in respect of up to £500 of the balance of the arranged overdraft for a period of no less than three months, when requested. If the arranged overdraft limit is lower than £500, no interest should accrue on the overdraft balance up to that limit for three months. Where an arranged overdraft has a limit of over £500, firms should not charge interest on the first £500 irrespective of whether the balance exceeds that amount. In the case of an arranged overdraft with a limit below £500, the entire balance should be fee-free for three months.

Customers may apply for new or increased overdraft facilities in the normal manner. The provision of new or increased arranged overdraft facilities is subject to the standard creditworthiness assessment by lenders. In carrying out this assessment lenders should take into account individual circumstances especially during this exceptional period. Creditworthiness assessments can look beyond current stressed circumstances if it is reasonable to expect the consumer’s financial position will improve in the future and can take account of historic information.

Where an impacted customer holds an arranged overdraft facility that presently exceeds £500 (or which the lender is willing to increase beyond £500) the interest free amount may be restricted to £500. Firms may offer interest free overdrafts of more than £500 (again new or increased overdraft facilities, will be subject to the normal creditworthiness assessment, as set out above).<<

Also the use of Keyworker. Remember BANK STAFF are also keyworkers.

colsten

born_again said:

Will this apply to basic bank accounts that have no O/D facility?

Probably not - but did the OP say they have a basic account at Santander? Anyway, let's see what the OP says about the temporary £500 O/D arrangement.