HSBC Premier Credit card started charging Cash Advance Fee for paying Freetrade subs

Ulrich

Hi All,

Starting from September 2022 HSBC has started charging me Cash Advance Fee (£3) and Interest on Standard Balance (Cash) every time a Freetrade subscription fee was collected.

I opened a Freetrade account (stock & shares ISA) in 2021 and subscribed to a Plus plan with subscription fees being taken from my HSBC Premier credit card.

Had no problem with it until I changed my plan to Standard (cheaper) in August 2022.

Since then every time Freetrade collected fees from my credit card, a £3 Cash Advance Fee was charged the same day and some Interest on Standard Balance (Cash) by the end of each billing period as well.

I phoned the Bank and they said they'd "fixed" something recently so now it works how it always should have worked according to CC T&Cs (https://www.hsbc.co.uk/content/dam/hsbc/gb/pdf/credit-cards/HSBC_Premier_Terms_and_Conditions.pdf). They don't admit they should have notified me about it as there was no change to T&Cs.

Freetrade says they did not charge me anything extra and they did not change anything on their end (but now if you want to change your payment card' details for the subscription, they display a message that it's recommended to use a debit card as some credit card providers may charge an additional fee - something that definitely wasn't there when I registered my credit card in 2021).

They think it's most likely that when I changed my plan in August 2022, the Bank has changed the category of that payment and now it is categorised as Cash related payment, i.e "Buying travellers’ cheques, foreign currency, purchasing money orders and other similar payments" according to the T&Cs (page 2).

Of course, I changed my payment card details to the debit card straight away.

However, I'm not happy that the Bank charged me for something they didn't charge me in the past without any notice - in fact, I'd expect both HSBC and Freetrade to inform me about seemingly nationwide change in the way some payments are categorised.

What is the advised course of actions? Should I complain to HSBC stating what I mentioned above and asking for a refund or there is something I need to add or refer to?

Thanks in advance
Ulrich

SaverRate

Put in a complaint to HSBC and they may refund the fees + some compensation 

DullGreyGuy

Cash like transactions are normally identified by the MCC associated with the merchant's MID, its in control of neither the merchant nor your bank but the merchant's acquiring bank. Many companies have more than one MID to represent different channels, services etc. 

So either Freetrade's acquiring have corrected the MCC, the change of product resulted in it going via a different MID being used which has a different MCC or HSBC has changed which MCCs are flagged as cash like. MCCs dont change very often so the last one is probably the least likely.

The fact that a warning now appears on the website probably reconfirms that it isnt option 3 but there isnt really anyone "at fault" here.

Ulrich

DullGreyGuy said:

The fact that a warning now appears on the website probably reconfirms that it isnt option 3 but there isnt really anyone "at fault" here.

Well, maybe "at fault" is not the right term here but does it sound right that a customer was charged for a complicated change outside of their control? It just sounds weird, who would want to use CCs if one day it turns out they owe their bank a pretty penny just because "computer says so"?

The_Urbanite

I’ve had HSBC Premier for a while. They weren’t charging cash advance fees for anything. You could buy £100k of GBP stablecoins a month or do card to card transfers to your debit card account for free and get points. It shouldn’t have been that way and was never going to last forever. 

They have now fixed the logic so several MCCs are correctly treated as cash advances. The problem is they won’t disclose which ones, but I have compiled a list of known ones. The people I get through to haven’t got a scooby doo who to ask about cash advance categories, there’ll be somebody who works in IT that knows about MCCs who could answer the question!

Ulrich

The_Urbanite said:

I’ve had HSBC Premier for a while. They weren’t charging cash advance fees for anything. You could buy £100k of GBP stablecoins a month or do card to card transfers to your debit card account for free and get points.

I can confirm that - actually, in August I payed £80 from my HSBC CC to Revolut and thought the cash advance fee and interest in my September's statement was related to that payment.
Only when I got me October CC statement and noticed another cash advance fee and interest and then started to investigate and came to a conclusion that it's not related to the £80 payment but to something else.

They have now fixed the logic so several MCCs are correctly treated as cash advances. The problem is they won’t disclose which ones, but I have compiled a list of known ones.

Yes, they said something had been fixed recently when I phoned the Customer Service. The issue is they not only won't disclose which ones but didn't communicate it to the customers at all, which led to the latter being charged for the Bank's mistakes.
That's not right. Already put a complaint in, let's see how it goes.

DullGreyGuy

Ulrich said:
Yes, they said something had been fixed recently when I phoned the Customer Service. The issue is they not only won't disclose which ones but didn't communicate it to the customers at all, which led to the latter being charged for the Bank's mistakes.

Wrong way round... you werent charged previously because of the banks mistakes. They havent retrospectively gone back and charged you but just applied it on a go forward basis. This is inline with the T&Cs you agreed to and so you've benefited from their mistake not been made worse off. 

Most customers know neither what MID or MCC codes are. Most shop cashiers dont know either. Many merchants have more than one ID and one MCC and the shop cashier is even less likely to know which one will be used for a transaction. It'd be a major shift in all areas for banks to identify the MCCs they count as cash and merchants to advise which MCC a transaction will go through against before doing so.

Unfortunately people dont read T&Cs often and even those that do often misread them... we've had a few posts about probate office being charged as cash and posters saying its only governmental fines that should be whereas governmental fees were also included in the terms.

There are cases where you can have some sympathy though... the FX store that does a small side line in travel wallets. Person goes in and just buys a wallet but gets charged a cash advance fee because the store only has one MID as 99% of transactions are for foreign currency.

[Deleted User]

SaverRate said:

Put in a complaint to HSBC and they may refund the fees + some compensation 

Why would they refund, let alone offer compensation for their own mistake which has saved the customer money because they didn't charge something they should have?

Ulrich

DullGreyGuy said:

Ulrich said:
Yes, they said something had been fixed recently when I phoned the Customer Service. The issue is they not only won't disclose which ones but didn't communicate it to the customers at all, which led to the latter being charged for the Bank's mistakes.

Wrong way round... you werent charged previously because of the banks mistakes. They havent retrospectively gone back and charged you but just applied it on a go forward basis. This is inline with the T&Cs you agreed to and so you've benefited from their mistake not been made worse off. 

Well, they made a change to they way they treat payments and according to the T&Cs they should inform me about it. They didn't, which resulted in some fees and interest they charged me.
That's what I think is wrong from a customer point of view.

Most customers know neither what MID or MCC codes are. Most shop cashiers dont know either. Many merchants have more than one ID and one MCC and the shop cashier is even less likely to know which one will be used for a transaction. It'd be a major shift in all areas for banks to identify the MCCs they count as cash and merchants to advise which MCC a transaction will go through against before doing so.

yes, it's very complicated indeed and as an ordinary customer I should not be aware of all that, really.

Unfortunately people dont read T&Cs often and even those that do often misread them...

I included a link to the current HSBC Credit Card T&Cs in my original post. I read the document through and honestly, as a normal person I'm unable to link that Cash related payment term with monthly subscription fees Freetrade charges me. Could you point out where it says that? I suspect that banks are not interested in making things like that clear because that's the way they make money.

On top of that, I mentioned in my original post that when I subscribed to a Freetrade plan, there was no message advising to use debit cards as some credit card providers may charge extra fees. Now Freetrade displays such a message.
I combine it with the fact that RECENTLY HSBC changed/fixed something in the way they treat some payments and it leads me to a conclusion that something industry-wide or bigger has changed or was introduced (new legislation, tax rules or something like that), which resulted in actions HSBC and Freetrade both undertook in that direction.
They both fixed something so there are probably no questions to them from the Government or any regulatory body it that regard.
On the flipside, as they did not communicate the change to their clients, the latter have been made worse off as they had to pay fees and charges they did'n previously pay under the same T&Cs.

I personally believe that as the Bank knew about the changes and didn't inform me about them, it's reasonable to refund me but let's see how they feel about it.

Ulrich

Deleted_User said:

SaverRate said:

Put in a complaint to HSBC and they may refund the fees + some compensation 

Why would they refund, let alone offer compensation for their own mistake which has saved the customer money because they didn't charge something they should have?

I think it's all about communication. According T&Cs the Bank should inform their customers about changes that affect them.
Customers haven't changed anything it the way they use the Bank's services but the Bank made a change that affects these services and failed to communicate it, which resulted in customers being charged extra.

[Deleted User]

Ulrich said:

Deleted_User said:

SaverRate said:

Put in a complaint to HSBC and they may refund the fees + some compensation 

Why would they refund, let alone offer compensation for their own mistake which has saved the customer money because they didn't charge something they should have?

I think it's all about communication. According T&Cs the Bank should inform their customers about changes that affect them.
Customers haven't changed anything it the way they use the Bank's services but the Bank made a change that affects these services and failed to communicate it, which resulted in customers being charged extra.

No they didn't, please re-read the terms and bank explanation - their terms always allowed them to charge you for this. What happened is that due to their mistake they didn't charge you for something they were allowed to charge for. They didn't change the terms, they started correctly applying them. You saved money by not having these charges, it didn't cost you anything.