This report defines what happens inside HSBC, at HFC and Beneficial, as outlined in their branch policies and product line. This is how it is described by a potential customer: “This is the height of predatory lending. I am a customer of HFC. I made the mistake years ago and cashed a check they sent me at a rate of 25.6987. Not a real smart thing to do. After receiving about 50 calls to come into the office to get a “better rate” I told them to leave me alone and eventually the calls stopped. Now I am receiving almost daily calls to get a new loan for again a lower rate and lower monthly payment.
I finally asked for details and was told the new rate is 22.5% and guaranteed. I sounded good to me so I decided to take them up on the offer thinking that my rate and payment would be lowered for the remaining term of my loan (11 mos). No such luck. HSBC wanted to re-write my loan to an adjustable rate loan of 18.5% plus the prime rate of 4% or 22.5% today. This loan is a credit line with no term! I was told I would have to take their insurance and an auto service plan which would raise the amount I owed them by $600.00. What a trap! I have already paid the majority of the intrest on my loan.
Now HSBC wants me to take a loan where my monthly payment is almost all interest! On top of that they had the audacity to suggest that I trade in my 6.25% mortgage to take a 10.93% mortgage from them that would pay off my HFC loan, Auto loan (4.25% 2 years left to pay) and discover card (6.99%) but save me $180.00 per month on a 30 year loan by their calculations.
All I can say is buyer beware. Ask questions. These people invent new ways of putting people further into debt. Instead of bailing out these finance companies, someone should investigate the way this company preys on people in these tough times. Needless to say I walked out of the office without my new loan or new guaranteed rate. To add to this insanity, the solicitation calls keep coming at least weekly. I am so sorry I got involved with HFC or HSBC what ever they are calling themselves.”
In another article, titled “Former employee explains live checks” we see the employee side of this issue. A quote form that articles says “Be wary because usually they include a proposal that consolidates your 4 year car loan over 25 to 30 years, which obviously shows a monthly savings.”
What we have is a business trying to sell a product, a method for finding potential borrowers, and a borrower that thinks they deserve to be in the subprime market. But is that really true? Many borrowers who qualified for prime loans actually were given subprime loans. During the height of the mortgage bubble many people did not care at all, assuming that home prices would increase, and refinancing would solve the problem.
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