Where do I stand with my bank???

Question

I started uni back in sept 2003 and opened a student account with HSBC. This account was used rarely but was in CREDIT by about £3k for the 3 years i was at uni.

On completion of my course in June last year, my account was automatically "converted" into a graduate account. This account had a £1500 interest free overdraft up until May of this year.

I withdrew my £3000 and shoved it into an ISA last summer. I then withdrew another £1300 (from my £1500 interest free overdraft). My account has not been used since.

Then, after recently applying for a credit card (last wk), it got rejected. Pulling up my credit record showed HSBC had marked 3 months (sep-nov 06) as "unpaid", linking it to non activity on my account while it was in debit.

This has seriously screwed my credit rating. I was not aware they would/could do this.This overdraft was mis sold to me otherwise i would not have used it.

HSBC are arguing its correct,when I was 100% unaware they could do this! What can i do?

Answer 1

you should always read the small print,if it sounds to good to be true then it is.

Answer 2

The bank has simply reported facts i.e. you've not paid in any money into your OVERDRAWN bank account for over 6 months.

An overdraft isn't a free loan, you still need to pay it back. The T&Cs of the account will tell you that there is an expectation that a minimum amount will be deposited in the account on a regular (usually monthly basis).

If you did not pay any money into the account and worse still have not paid back the overdraft yet, then they have every right to reflect this in the data they provide to the credit reference agencies. I.e. you have not "paid" in any money against the overdraft which is offered based on monthly income into the account to cover the overdrawn amount. This will all be detailed in the T&Cs.

Furthermore, the company you applied to will not only look at one single factor like "unpaid" status on your credit file. They will allocate a score to a number of different factors such as:
-how long you've been at your current address
-how many addresses you've had in the last 6 years
-how much total credit you have outstanding
-if you are a homeowner or not
-your payment record across all accounts, not just 1 credit card

If you have been refused credit, you need to go back to the institution who refused you and ask why - they will NOT be specific, they probably just tell you what I wrote above, if not more vague.

It is highly unlikely that 3 months "unpaid" on its own would result in a credit refusal unless you are applying to a particularly strict company like AMEX, or for a godl/platinum card. There are likely to be other factors i.e. is the debt still outstanding, what's your record of payment like on other accounts, do you have other "dormant" accounts etc...

What you can do is:
a) take responsibility for YOUR actions
b) pay off the overdraft if you have not already done so - you were daft to use it in the first place if you had £3k in savings
c) go back to the place that refused you and ask why, ask them to review your application personally rather than rely on a computer score and explain about the HSBC account (though given the above, this will probably lead them to refuse you again!)

Answer 3

You DELIBERATELY overdrew your account and made NO payments for over 6 months. Now your surprised they want paid? Remember the little booklet you received when you opened the account? Try reading it. I bet it explained in great detail what would happen if you didn't pay your overdraft. The bank didn't 'screw' your credit rating, YOU did. Its not the banks fault you didn't read the terms of the account.

Answer 4

Trading Standards

Answer 5

For a start, they have absolutely no right to "automatically" convert your account to another one. It's probably a fiddle, so some clerk will get commission for "selling" you another account.

Seek legal advice. Financial Ombudsman, Citizens Advice Bureau etc.

The tide is turning for the banks, people are getting fed up of being ripped off by their dubious practices (like illegal charges for overdrafts etc).

Don't let them get away with it.

Answer 6

I suggest that you gather any documentary evidence which showed this and take them to the FOS (Financial Ombudsman Service, South Quay Plaza, 183 Marsh Wall, London)

Answer 7

sorry to tell u
u can't do much