HSBC Overdrawn business account (Sole trader)

[Adinuff]

Hi there,
We had a business account with HSBC acct with an overdraft. We went into finacial meltdown in 2005/6(libor rates didnt help). The account went over the overdraft and into severe debt of around £26k. Alot of it was charges and penalties. it was in my mine and wifes name trading under business name. We also are in alot of other finacial debt. we joined payplan to sort this mess out for us. And have been paying on time for the last 6 years but have another 30 years to go !!!. this year i wanted to get a grip of my debt and find out what i really owe. total debt reckoned by payplan reckoning is nearly £100k. the business is still going and we are now LTD and have relevant acct with HSBC. I have started the process of sending SAR and CCA to all of the Credit card companies. But im at a loss to where we stand with HSBC business account. Can we CCA and SAR them? or is just a case of pay them off till we die? You help would be much appreciated :-)

[brummie]

Re: HSBC Overdrawn business account (Sole trader)

Hi and welcome

I presume you gave a personal guarantee for the buisiness loan? Have payplan combined your buisiness debt with your personal debt?

[Adinuff]

Re: HSBC Overdrawn business account (Sole trader)

Hi Brummie,
No there was no guantee with the overdraft. There is no loan involved. Just a straight business account with overdraft. Yes payplan have combines with personal plan

[Adinuff]

Re: HSBC Overdrawn business account (Sole trader)

Hi there,
Can anyone help?

[Kafka]

Re: HSBC Overdrawn business account (Sole trader)

The CCA doesn't apply to overdrafts as they are not loans and there is no regulated agreement.

SAR is your right to receive all the personal details held on you, but business accounts are not personal. What were you hoping to achieve by sending for data regarding the business OD?

[Adinuff]

Re: HSBC Overdrawn business account (Sole trader)

Hi Kafka,
i was hoping to try and get charges and interest back at least. There was alot put onto this account. So Basically its a case of just paying this off slowly then?

[Kafka]

Re: HSBC Overdrawn business account (Sole trader)

Very difficult now to reclaim default charges on current accounts since the Test Case a few years ago. Although the Commercial Court didn't examine business accounts, it did state that HSBC default charges on current accounts were "not capable of being penalties". That ruling was not appealed, so basically it is used by banks as a way of refusing to repay such charges.

[Adinuff]

Re: HSBC Overdrawn business account (Sole trader)

Would the best option be to ask for a full and final settlement then? And hope they knock a hefty % off. as its HSBC i wont be holding my breath.

[FlamingParrot]

Re: HSBC Overdrawn business account (Sole trader)

The CCA doesn't apply to overdrafts as they are not loans and there is no regulated agreement.

Indeed there would be no credit agreement as such because they are part of a current account, however, there's still some rules governing them:
See the The Consumer Credit (EU Directive) Regulations 2010 and the addition of c.39 (s.74 (A&B) (VA)) CCA(1974 ---> (Consumer Credit Act 1974) <-- to allow overdrafts within legislation.

Which means that if you do not have an overdraft in the first place, or you go over your arranged overdraft limit, the lending becomes regulated in line with Part VA (s.74) (s.1(b)) meaning the normal rules apply.

The lender also needs to send an annual reminder to you regards the overdraft, this is why most overdrafts only run a year - so at the end of each year you *should* be supplied with a renewal form detailing the O/D PT's which should be in the form of:

Quote:

s.74A(2) The current account agreement must include the following information at the time it is made: (a)the rate of interest charged on the amount by which an account-holder overdraws on the current account or exceeds the pre-arranged overdraft limit, (b)any conditions applicable to that rate, (c)any reference rate on which that rate is based, (d)information on any changes to the rate of interest (including the periods that the rate applies and any conditions or procedure applicable to changing that rate), and (e)any other charges payable by the debtor under the agreement (and the conditions under which those charges may be varied).

If you have an arranged overdraft and go over the limit, or do not have an overdraft but they still allow you to go overdrawn, they have to provide the following information:

Quote:

s.74B(2) The matters referred to in subsection (1) are: (a)the fact that the current account is overdrawn or the overdraft limit has been exceeded, (b)the amount of that overdraft or excess, (c)the rate of interest charged on it, and (d)any other charges payable by the debtor in relation to it (including any penalties and any interest on those charges).

SAR is your right to receive all the personal details held on you, but business accounts are not personal. What were you hoping to achieve by sending for data regarding the business OD?

The OP has stated they are sole traders, so the account, even if used for business purposes, would have to be in their name rather than a company name, so I'd say they'd still have to comply with a SAR. If you are worried about potentially wasting £10 + PO + postage, you may want to contact the ICO helpline to clarify this ---> https://www.ico.gov.uk/Global/contact_us.aspx

Very difficult now to reclaim default charges on current accounts since the Test Case a few years ago. Although the Commercial Court didn't examine business accounts, it did state that HSBC default charges on current accounts were "not capable of being penalties". That ruling was not appealed, so basically it is used by banks as a way of refusing to repay such charges.

Yes, you can usually only reclaim charges when they would have caused hardship, for example, when your income was made up mostly of benefits. I doubt this would be the case with an account used mainly for business.

[Adinuff]

Re: HSBC Overdrawn business account (Sole trader)

Hi there,
Thanks for the detailed reply. Im still none the wiser on how to apporach them regarding the debt. Can i pay them £1 token payment and try and force them into a F&F. Btw the account was registered under the business name with the wife and i named on it. We are now LTD company and dont trade under the old name. What can HSBC do to reclaim the debt?

[wales01man]

Re: HSBC Overdrawn business account (Sole trader)

If the business was not LTD. just your business in your names you are liable for the debt not the LTD company as in the case of a LTD company owned by you and your wife the debts are not your liabilith unless you guaranteed them or have broken the law

[Adinuff]

Re: HSBC Overdrawn business account (Sole trader)

Can we therefore offer them a £1 token payment a month. And try to entice them into a F&F payment offer talks? We can only afford 10% max on this debt. wondering if they will agree?

[wales01man]

Re: HSBC Overdrawn business account (Sole trader)

i owe hsbc 28 grand plus the last i heard they were after all of it as ive moved and they dont know where i am i havent had any mail from them,others on here a more knowlegable about debt than i am but im sure offering a final settlement might be worth the cost of a stamp,
Good luck wish you well

[Adinuff]

Re: HSBC Overdrawn business account (Sole trader)

hi Wales01man,
trust me i have comtemplate moving away. Got family and kids too consider nowadays. Just things went pear shaped for me for years back, now im trying to sort. but i just havent got the cash to pay them. And they wont let sleeping dogs lie. which means i cant move on with my life. Seems like we will paying all our life for problems earlier on in life. Just gets you down sometimes.

[Somecamel]

Re: HSBC Overdrawn business account (Sole trader)

Can you bring losses forward when you convert from a Sole Trader to a Ltd Company?