Unsecured Loan Claiming as Overdraft

[RedFinn2012]

Hi guys,

Really feeling a bit as though I'm in over my head and could do with a bit of help from you. Without going into masses of detail straight off the bat, the background is:-

In 2005, I got into difficulty and my bank (HSBC) wrapped up all my credit card debt, overdraft, and loan into a 'managed loan', total of which was circa £10K. Not allowed any further credit or overdraft.

Fast forward to 2011, I was again in trouble, had an accident in August 2010 in which I broke both legs, which was the start of the slippery slope and to cut a long story short, I defaulted on this loan, of which there was £3193.00 outstanding (for every £100 I paid they took about £60 as interest, so feel I did rather well to get to this point)

Also took a parachute account and left my current account, which was £59.00 O/D due to charges.

Various letters received over the years but I've now had one from Restons Solicitors on behalf of Arrow Global, claiming £3252.00 for an overdraft, how convenient. They also quote my old current a/c number and not the loan a/c number.

I sent a letter back requesting that they comply with pre-action protocol and stating that as I have never had an overdraft even approaching that amount, could they provide the detail.

They have responded basically telling me to review my own paperwork etc.

Can you help me please?

[Amethyst]

Re: Unsecured Loan Claiming as Overdraft

Morning, Is the letter one you would class as a letter before action?

When the loan was merged to the current account was a new agreement made as far as you recall or was it done unilaterally by hsbc ?

Do you recall when you last made a payment / had contact with hsbc on this account ?

It may be worthwhile sending a subject access request to HSBC for all your personal data and transaction lists to give yourself ammunition to evidence your defence of the claim - you could also ( if it is a lba from resting) send arrow a formal cca request if you haven't already.

[RedFinn2012]

Re: Unsecured Loan Claiming as Overdraft

Hi Amethyst,

Yes, in their reply to me they refer to their first letter as a letter before action. They also say that their initial letter is compliant with Paragraph 3 of the practice direction - Pre-Action Conduct and Protocols.

The merging of accounts was done with my knowledge, HSBC called me (sometime in 2005 or thereabouts) to discuss my accounts (I remember I had my daughter in the bath) and the managed loan was sold to me as the answer to my problems, a pity they neglected to tell me that I would be enslaved to it for far longer and much more costly.

Last made payment & contact circa Nov. 2011.

I'll look into the SAR and CCA, I just don't know how Restons can claim it's an overdraft when I didn't have an overdraft on my current account, not really what I'd call compliant with PAP.

My concern is though, that they're trying to circumvent having to provide a CCA by claiming it's an overdraft.

[RedFinn2012]

Re: Unsecured Loan Claiming as Overdraft

This is the letter they sent to me in response.

[nemesis45]

Re: Unsecured Loan Claiming as Overdraft

Hi Amethyst,

Yes, in their reply to me they refer to their first letter as a letter before action. They also say that their initial letter is compliant with Paragraph 3 of the practice direction - Pre-Action Conduct and Protocols.

The merging of accounts was done with my knowledge, HSBC called me (sometime in 2005 or thereabouts) to discuss my accounts (I remember I had my daughter in the bath) and the managed loan was sold to me as the answer to my problems, a pity they neglected to tell me that I would be enslaved to it for far longer and much more costly.

Last made payment & contact circa Nov. 2011.

I'll look into the SAR and CCA, I just don't know how Restons can claim it's an overdraft when I didn't have an overdraft on my current account, not really what I'd call compliant with PAP.

My concern is though, that they're trying to circumvent having to provide a CCA by claiming it's an overdraft.

Hi,

It would be worthwhile checking your credit reference files to see 1. If the account is there and 2 to see how it is described.

It's quite common for these managed loans to be wrongly described as an overdraft.

nem

[RedFinn2012]

Re: Unsecured Loan Claiming as Overdraft

Hi Nemesis,

Already done that, nope they are listed separately Current A/C £59.00 - Default 19/06/2012 & Unsecured Loan £3193.00 - Default 23/07/2012.

Bundled together by Restons as Overdraft and using the Current A/C number.

Thanks for your help guys, it's much appreciated.

[nemesis45]

Re: Unsecured Loan Claiming as Overdraft

Hi Nemesis,

Already done that, nope they are listed separately Current A/C £59.00 - Default 19/06/2012 & Unsecured Loan £3193.00 - Default 23/07/2012.

Bundled together by Restons as Overdraft and using the Current A/C number.

Thanks for your help guys, it's much appreciated.

Well you can prove that you never had an overdraft of that size, and I suspect Arrow Global have instructed Restons that the debt is solely for an OD, they do like to pull stunts like that.
nem

[Diana M]

Re: Unsecured Loan Claiming as Overdraft

Send Arrow a section 77 CCA Request immediately. You must include a £1 postal order for the statutory fee.

Send a copy of it to Restons with a covering letter stating that you "categorically deny this debt was an overdraft with HSBC" (if that's the case since you say it was a loan).

This forum has a template letter here > http://legalbeagles.info/forums/show...=7670#post7670

That letter from Restons gives you a deadline of 18th April before they will issue legal proceedings so make sure you reply as soon as possible by Royal Mail Recorded Delivery.

Ditto the s.77 CCA Request to Arrow (Recorded Delivery) asap.

Di

[Diana M]

Re: Unsecured Loan Claiming as Overdraft

Last made payment & contact circa Nov. 2011.

If the last payment and/or contact was in November 2011 then this debt is due to go Statute Barred in November this year.

If you send a CCA Request now I expect they'll have to approach HSBC (the original creditor) for the documents which could take months.

During this period of non compliance with your s.77 CCA Request a firm must make the debtor aware that the debt is unenforceable so shouldn't issue legal proceedings under the FCA Handbook rules CONC 13.1.6 >

https://handbook.fca.org.uk/handbook...&timeline=True

There's no guarantee they'll voluntarily respect the FCA guidance so you may wish to include reference to it in your letter to Restons. Let them see you're not daft.

In another post you say the account(s) were defaulted in July 2011 so the DN would have been before that date. You need to check when that last payment was made (could it have been before November 2011?) in case SB is sooner than you think.

Di

[Diana M]

Re: Unsecured Loan Claiming as Overdraft

Already done that, nope they are listed separately Current A/C £59.00 - Default 19/06/2012 & Unsecured Loan £3193.00 - Default 23/07/2012.

Bundled together by Restons as Overdraft and using the Current A/C number.

If they plead the wrong account number in the Particulars of Claim (if they issue proceedings) then they'll have some difficulty in winning the case.

It may not have been Restons who bundled the numbers together. In my experience HSBC amalgamate accounts/debts before they assign them. In most cases they give the 'account' a new reference number.

Send a Subject Access Request to HSBC now to get the full history of what really happened and when.

Di

[RedFinn2012]

Re: Unsecured Loan Claiming as Overdraft

Hi Diana,

Thanks for your advice, I will send off the CCA tomorrow and a copy to Restons, I've attached a reply to them also. Do you think it'll do?

"Dear Sir,

I refer to your letter of March 29th in which you again state that you intend to commence court proceedings concerning an alleged overdraft balance of £3252.05. I have indeed checked my records and categorically deny even having an overdraft with HSBC, namely because I wasn’t allowed to have one.

To that end, I have formally sent your client a section 77 CCA request (copy enclosed) and respectfully ask that you halt any further proceedings on this account until such time as their documents have been received by myself."

[Diana M]

Re: Unsecured Loan Claiming as Overdraft

Hi Diana,
Thanks for your advice, I will send off the CCA tomorrow and a copy to Restons, I've attached a reply to them also. Do you think it'll do?

Yes

Di

[RedFinn2012]

Re: Unsecured Loan Claiming as Overdraft

If they plead the wrong account number in the Particulars of Claim (if they issue proceedings) then they'll have some difficulty in winning the case.

It may not have been Restons who bundled the numbers together. In my experience HSBC amalgamate accounts/debts before they assign them. In most cases they give the 'account' a new reference number.

Send a Subject Access Request to HSBC now to get the full history of what really happened and when.

Di

It's possible but wouldn't it be displayed on my credit file that way? As it stands, my credit file accurately displays the info separately,

[RedFinn2012]

Re: Unsecured Loan Claiming as Overdraft

If the last payment and/or contact was in November 2011 then this debt is due to go Statute Barred in November this year.

If you send a CCA Request now I expect they'll have to approach HSBC (the original creditor) for the documents which could take months.

During this period of non compliance with your s.77 CCA Request a firm must make the debtor aware that the debt is unenforceable so shouldn't issue legal proceedings under the FCA Handbook rules CONC 13.1.6 >

https://handbook.fca.org.uk/handbook...&timeline=True

There's no guarantee they'll voluntarily respect the FCA guidance so you may wish to include reference to it in your letter to Restons. Let them see you're not daft.

In another post you say the account(s) were defaulted in July 2011 so the DN would have been before that date. You need to check when that last payment was made (could it have been before November 2011?) in case SB is sooner than you think.

Di

It could have been sooner, albeit not by much, so I'm guesstimating November as SB time. This was created circa July 2005, when they amalgamated all my HSBC debt, overdraft, credit cards, and loan into this 'Managed Loan' and I was not allowed any further credit with them, so it's definitely no overdraft. I'm wondering if they'll have a hard time getting the documents after 12 years......

[Diana M]

Re: Unsecured Loan Claiming as Overdraft

wouldn't it be displayed on my credit file that way? As it stands, my credit file accurately displays the info separately,

I'm aware of a similar situation (with Arrow) where the current account OD is on the CRA files as HSBC and the loan element is reported by Arrow. In that case Arrow is pursuing both amounts as one debt which will give them assignment issues.

My advice is to take a screenshot of both entries before they fall off the CRA files in July which is the sixth anniversary of the defaults. You may need it as evidence further down the line.

Let's hope that the CCA Request puts a stop on things for now as you limp towards SB.

Di