Is your HSBC interest free promotion misleading?
HSBC and others offer interest free promotions through merchants such as Best Buy. This blog is filled with complaints about how these accounts are handled, thus we publish this alert here. In fact only moments ago we received a new complaint about this practice, stating that the final payment was not credited for 11 days, thus HSBC claimed it was late. In these cases all interest becomes due, and the interest freee promotion is declared invalid and void. You can see where the problem is.
Canada took a different approach. In October 2007 the Supreme Court of Canada in April upheld the largest exemplary damages ever awarded in Quebec - the $2.5-million Household Finance Corp. was ordered to reimburse 25,000 credit-card holders over late-payment fees after the company lost a Quebec Superior Court class civil suit in May 2003. The lead plaintiff in that case was Brault & Martineau customer Lynda Gagné, who signed two contracts with the store on its buy now and pay later plan.
In another case furniture and appliance chain Brault & Martineau Inc. has again been severely reprimanded for its “buy now, pay in a year” promotion. Quebec Superior Court Justice Claudine Roy awarded $2 million this week in exemplary damages to 200,000 store customers ($10 each) misled by the advertised payment plan that she ruled contravenes several provisions of the provincial Consumer Protection Act.
In the United States HSBC was charged in Shea vs Household (HSBC owned Household International when the case was settled) and paid $11 million (USD). HSBC allegedly applied payments as late payments. It is interesting to note that the merchant may receive some of the profits as ‘ongoing compensation.’ Clearly HSBC made much more than $11 million, so the fine was just the cost of doing business while saying to hell with the customer and to hell with doing what is right and proper.
The SUpreme Court of Canada uncovered some intersting facts and figures which might set up a racketeering case in the United States. The judge pointed to a survey that showed 73 per cent of respondents were attracted to the financing terms while only 18 per cent were pulled into stores for the products and brands. Yves Des Groseillers, president and CEO of parent company Groupe BMTC Inc., testified revenues increased tenfold after introducing those payment plans in 1989.
Trudel had argued 70 per cent of consumers end up paying credit fees and he referred to a Brault & Martineau poll that revealed 19 per cent of the people interviewed didn’t know there are late fees added if they don’t make their scheduled payments.
Why do Americans shop at Best Buy? Is it because of the products or the financing? In one case HSBC did not mail a statement in the final month of the interest free promotion, trying very hard to get the customer to overlook or forget to make a payment. The customer was my wife. That is not an allegation, it is the truth, and one of the reasons we started Household - HSBC Watch consumer advocates.
As we advocate for you we will use the Canadian court’s findings and figures to request another investigation into HSBC’s interest free promotions. Duplicity from 1994 through 2007, with only one $11 million fine, is not the message our Supreme Court should send to honest hard working Americans. HSBC Finance is a ‘pay for performance’ company so they benefit in a multitude of ways if they can dupe you. By the way, my wife discovered the scam, paid by phone for an extra $15, and told HSBC to add the $15 to the payoff. Had she not done so HSBC would have declared the interest free promotion null and void because she had a balance of $15. Beware if the interest free scam.
Thinking of making a debt settlement offer? See common settlement scams and rip-offs first or get our free widget
