Texas HSBC Customer Finds Shady Debt Cancellation Fee
MS in Texas says: “We purchased a LCD T.V. from Best Buy using a new Best Buy Card interest free promotion. At the time I think we were not made clear in what the sales associate whom was signing us up for the card; truly for what we signed. When my wife went to pay off the card in full before the promotion date she was told that we would pay only so much. Unbeknownst to us we had been accruing the shady “Debt Cancellation Fee”. When we received our next statement we expected to see the bill payed in full; it was not because it had a balance due because of this fee for $255. Looking closer at our statement we have been overlooking the fee and that it had been accruing ever since we took out the card.
I called them immediately and ask to dispute this charge and don’t recall requesting a fee such as this and kind of remember the sales associate not making clear to what we had signed. Which looking back we should of asked to better understand. The people at HBSC didn’t not state that we owed this when we called for the payoff amount. Then when I called to ask and dispute they stated, …”the amount owed is for the debt cancellation fee and if I would like to cancel this they will do so and if you would like to dispute the charge and request a credit I would have to write a letter”. So begins the challenge - how not to pay for this and I don’t have proof of what I signed or didn’t sign only the receipt for what I bought. Thoughts and suggestions?”
Editor’s note: Before HSBC bought Household International it was public knowledge that Hosehold International was the last finance company to stop padding accounts with insurance. Today, shady companies pad accounts with the debt cancellation fee. Others do it too, but shady refers to those that will not provide you with proof that you signed up for it in the first place.
You wrote a good narrative to us, and you should forward it to the Texas attorney general’s office, and the Illinois attorney general’s office, as HSBC Finance Corporation in headquartered there. Best Buy has headquarters in Minnesota, so their attorney general should get a copy too. What you experiencing is common practice for HSBC Finance Corporation, as they and their staff are the same predators as Household International, just with a new name and HSBC is the owner.
The way this scheme works is that Best Buy gets a portion of the fees from everything, including debt cancellation fees. It is called ongoing compensation, and is part of the contract between Best Buy and HSBC Finance Corporation. Some analysts think Best Buy, as HSBC’s biggest private label credit card contract, and HSBC will someday be charged with racketeering. The basis for that thinking is that aside from their normal course of business Best Buy hooks the customer and HSBC Finance pads their account, while at the same time the customer signed a contract that forbids you from suing them. Anything you bought is held as collateral, and the customer is forbidden from including any purchases in bankruptcy.
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I have fallen victim to this “program” as well! While reading your post, I was thinking that it is exactly the same story as mine, only in Indina. I am in the process of writting a letter to see what,if anything can be done about it. Please post what eventually happens with your situation, as I will too.
hi,
I’ve fallen victim to this “debt cancellation” program as well. How Do I proceed to dispute the charges and avoid paying the fees for debt-cancellation? This has been going on my card for last 18 months, so how do I avoid paying fees for last 18months! the total is 860$ which is a huge amount!!