Interesting Bank Responsibility Question .....

[Snoopy1948]

I hold a joint HSBC bank current account with my daughter. Although I receive statements and debit cards for this account, I pay no money into it nor do I use it in any way. Effectively, the account is for the sole use of my daughter ( as I have my own HSBC current account ) but was set up about twelve years ago or so as my daughter needed a bank account and alas had not been responsible with a previous HSBC account that was closed as a result. HSBC agreed to set up a new current account for her on the basis that I held it jointly and as such became responsible for all losses on the account ( if any ). That account has been maintained in good order ever since.

I have recently changed my current account from HSBC to another bank although I still have internet banking access to my joint HSBC account with my daughter. Within the last year, HSBC have agreed on a personal loan for my daughter, some £5000 I believe, and I saw the loan amount be credited to the account and repayment now debited monthly. My daughter has not told me about this loan but it was obviously agreed that our joint current current account would be credited with the loan and repayment from it. I have had no part in obtaining this loan nor have I received any advices regarding it.

MY question is has HSBC committed any offence in agreeing this loan to my daughter knowing ( or perhaps they did not know these consequences ) that should she default and our joint account goes into debit as a result of no funds to fund the monthly repayment, I automatically stand to be responsible for the balance deficit ( of any outstanding repayments under the terms of the joint account? Should I have been notified of the bank loan or been party to setting it up? Personally I think HSBC are out of order here but I would appreciate comments before I make a complaint in writing.

Cheers in advance!

[leclerc]

Re: Interesting Bank Responsibility Question .....

Ask the bank the question that there is a loan on the joint account that you have not signed for. My understanding is that because it is on the joint account that both of you have to sign the loan paperwork since you cannot be held liable for her loan and that credit cannot simply be given on the basis of your credit history.

Ask them to clarify why the loan is on your joint account when you have not signed the paperwork.

[nemesis45]

Re: Interesting Bank Responsibility Question .....

Hi Snoopy,

I think what you must find out as a matter of urgency is if this loan has been obtained in joint names, or if the loan is in your daughters name alone.

If it's the latter then I can see no liability falling upon you, if the loan in in joint names ( fraudulently obtained) you will need to inform the bank asap.

nem

[nemesis45]

Re: Interesting Bank Responsibility Question .....

Ask the bank the question that there is a loan on the joint account that you have not signed for. My understanding is that because it is on the joint account that both of you have to sign the loan paperwork since you cannot be held liable for her loan and that credit cannot simply be given on the basis of your credit history.

Ask them to clarify why the loan is on your joint account when you have not signed the paperwork.

A party to a joint account can independently apply for a bank/ personal loan without reference to the other party, and I can see no reason why the money
cannot be paid into that account. Liability would be for overdrawing/ charges should they occur not for an independently sourced loan.
As the OP has not either paid any funds into or withdrawn fund from the account.

My thoughts and opinion.

nem

[Snoopy1948]

Re: Interesting Bank Responsibility Question .....

"A party to a joint account can independently apply for a bank/ personal loan without reference to the other party, and I can see no reason why the money
cannot be paid into that account. Liability would be for overdrawing/ charges should they occur not for an independently sourced loan.
As the OP has not either paid any funds into or withdrawn fund from the account."

Hi guys and thanks for the input.

Can I safely assume therefore that my daughter would have no trouble legally obtaining that loan in her sole name, subject to status ( which frankly I would question anyway )?

I really don't think this is a matter of fraud as the bank would have corresponded directly with me and a recent credit reference search showed zero borrowing for me anyway.

I accept and understand that the contract lies between my daughter and the bank and I can therefore not be help liable for the loan balance in any way. But, if she ( for example ) became erratic and for whatever reason failed to continue funding the account with credits, the repayments could fall due, putting the account into debit and possibly facing closure. As I have signed for the joint account, and effectively assuring the bank of paying all shortages, they would chase me for any monies outstanding on closure. That's my assumption and the one that I am beefing about.

But even though this loan in her sole name has been paid into my joint account, and repaid from my joint account, you bet that HSBC will bring in the data protection curtain and refuse to discuss any of it with me, even though possibly they have failed to see the bigger picture. The fact remains that I am perfectly at liberty to use this account, credit and debit it and I do have a Visa debit card.

I will write to them, pointing out my initial concerns, and see what they say. Knowing the bank, probably not a lot.

[nemesis45]

Re: Interesting Bank Responsibility Question .....

"A party to a joint account can independently apply for a bank/ personal loan without reference to the other party, and I can see no reason why the money
cannot be paid into that account. Liability would be for overdrawing/ charges should they occur not for an independently sourced loan.
As the OP has not either paid any funds into or withdrawn fund from the account."

Hi guys and thanks for the input.

Can I safely assume therefore that my daughter would have no trouble legally obtaining that loan in her sole name, subject to status ( which frankly I would question anyway )?

I really don't think this is a matter of fraud as the bank would have corresponded directly with me and a recent credit reference search showed zero borrowing for me anyway.

I accept and understand that the contract lies between my daughter and the bank and I can therefore not be help liable for the loan balance in any way. But, if she ( for example ) became erratic and for whatever reason failed to continue funding the account with credits, the repayments could fall due, putting the account into debit and possibly facing closure. As I have signed for the joint account, and effectively assuring the bank of paying all shortages, they would chase me for any monies outstanding on closure. That's my assumption and the one that I am beefing about.

But even though this loan in her sole name has been paid into my joint account, and repaid from my joint account, you bet that HSBC will bring in the data protection curtain and refuse to discuss any of it with me, even though possibly they have failed to see the bigger picture. The fact remains that I am perfectly at liberty to use this account, credit and debit it and I do have a Visa debit card.

I will write to them, pointing out my initial concerns, and see what they say. Knowing the bank, probably not a lot.

It is of course impossible for you or us to know under what terms your daughter managed to obtain a loan, the possibilities are there, e.g. she has shown the lender she has the means to service such a loan, or she has a guarantor, the more unpleasant possibilities being dishonesty about means, or employment.

All you need I think is the banks assurance that you are in now way connected to or liable for the loan.

nem