One woman’s life became a nightmare when HSBC started harassing her for money she didn’t need to pay
Phone Sarah Willis’s mobile from an unknown number and you can hear the dread in her voice as she answers. This normally strong woman, who runs a consultancy firm advising some of the UK’s biggest business leaders, was almost reduced to a wreck after being subjected to a four-year campaign of harassment by HSBC after she took out a loan to fund her postgraduate degree.
At its worst point, she says, people representing the bank were phoning her 17 times a day asking why she hadn’t made repayments – even though she was paying exactly as agreed by the bank staff.
Each time she would explain it was an administrative cock-up, and each time the caller would ignore what she had just said and ask again how she was going to pay back the loan. These calls to her mobile – which she relies on for work – came again, and again, and again.
Willis’s case goes back to 2000 when she took out the professional studies loan to fund her MBA, and which she serviced perfectly well for years. At the time she was told she could raise or lower the size of her repayments during its term, according to her income.
Having previously increased her payments, in 2008 she chose to lower them and went into her local branch to arrange it. The branch manager made the adjustment, and she left considering it had been done.
However, within a few days of the new payment going through, she started receiving calls asking why she wasn’t making all the repayments and demanding the higher previous monthly amount. She later learned that a staff member had failed to amend the HSBC system correctly.
When she queried it, she says her bank manager confirmed her account was in order, but that it was impossible for him to contact anyone else in HSBC to stop the calls, and she should just ignore them.
However, they kept coming, and the problems worsened.
When she made a formal complaint, the bank denied that any new repayment arrangement had been made. Only when a letter later surfaced detailing the new schedule, HSBC admitted it was “mistaken” and the new arrangement had actually been in place all along. Even so, the harassing calls continued.
Part of the problem was that HSBC had stopped offering the type of loan she took out and no longer had the systems to deal with them in place.
“I was being called at least every week for over a year,” she says. “In total the calls have gone on for three years. During one three-week period I would be called by them 17 times a day, from 8.30am to 9pm at night weekdays, and 9-5 at weekends, seven days a week. It’s hard to describe the effect this has.”
When she told staff at her north London branch that she was going to complain to the Financial Ombudsman Service (FOS) they told her all the paperwork for her loan from the outset had disappeared.
By now there was also a series of default notices appearing on her credit record. When she complained they would disappear for a few days. But then the chasing phone calls would resume and so would the default notices. One day, after being assured she’d never be called again because it was all resolved, a final demand for more than £9,000 landed. HSBC said it didn’t know why.
After a two-year investigation, involving two senior staff – the first case handler left – the FOS found in Willis’s favour. It ordered HSBC to stop calling her and remove any default notices, and told the bank to pay her £600 – a figure she says barely covered her costs and doesn’t even touch on compensation for distress.
She says the executive assistant to the FOS’s chief executive, who was at one point handling the case, said he had never seen anything like this behaviour from a bank.
But it was not the end of the story. Extraordinarily, in November 2012 the money-demanding calls started again, this time from Metropolitan Collection Services, a wholly owned subsidiary of HSBC.
“The ombudsman has demanded that it never call me and that all communication must be from HSBC, but Metropolitan routinely ignores this,” she says.
“The next evening I spoke with another subsidiary at HSBC, DG Solicitors, which assured me I would receive no more calls from HSBC or Metropolitan. At 8.30am the following morning, Metropolitan called me again.”
Having lost faith in the ombudsman to resolve the situation, Willis consulted a barrister who described it as “being trapped in a Kafka-esque nightmare”. She has considered suing the bank but fears the cost would outweigh the return.
“There seems no way out of this nightmare. Throughout both my professional and personal dealings I have never encountered an organisation so negligent, so full of incompetence and so desperately out of control,” she says.
“The FSA won’t investigate individual cases. There is no authority in Britain that will step in, punish them and stop them; they are making a laughing stock of the ombudsman.”
A spokesman for HSBC says: “We apologise to Ms Willis for the unacceptable level of service she received from the bank over her professional studies loan. We can confirm that no negative data is on her credit file relating to the loan, and we hope she will accept one of the two offers in excess of the ombudsman’s agreed compensation we have offered and agree a way forward for her to repay her outstanding loan.”
Since Guardian Money became involved, the bank has agreed to reduce the £9,500 outstanding balance to £8,000 provided she pays it off before the end of January, and only if it is in “full and final settlement”, on top of £600 awarded by FOS.
It has offered a lesser amount if she resumes paying the loan. She describes the settlement as “derisory”.
Meanwhile, an FOS spokesman declined to deal with her allegations that it had failed to stand up to HSBC. “It’s highly unusual for a business not to abide by our decision – and we take a dim view of this,” he says. “On the occasions a consumer tells us there’s been a delay or a problem, we will take it up with the business – and notify the regulator if things aren’t sorted out.
“In this instance, the consumer told us that the bank had failed to resolve some problems with her credit file. We asked both sides to provide proof that the matter had been sorted out as our binding decision specified.
“The bank provided this proof, but the consumer has continued to contact us to say she remains unhappy for a number of reasons. We’ll investigate any errors as a new complaint if the evidence shows further problems have occurred after our original judgment.”
*Sarah Willis is not her real name.
Personal finance and money news, analysis and comment | guardian.co.uk
There are no comments yet. Why not be the first to speak your mind.