Following a $484 million settlement between Household Finance and 50 states in 2002, Household International is now a subsidiary of HSBC Group plc. The company sold 2,188 high-rate loans in the Carolinas in 2004.
Since the settlement agreement, HSBC has adopted standards that consumer advocates regard as among the most stringent in the industry. Much of what recently sued Ameriquest has agreed to do, HSBC already does. “We committed to taking human decision-making out of the process as much as we could,” removing opportunities for abuse, said Tom Detlich, the head of consumer lending. The company also made customer satisfaction a measure of success. “It’s a different way of doing business,” he said. HSBC now uses a blind system to assign appraisers to loans. It uses computers to set prices, with little discretion available to employees. And it gives customers a one-page summary of the cost of the loan. Of course, just like ACC Capital, HSBC has a subsidiary that works with independent brokers under different rules. That arm, Decision One, is based in the Charlotte area. Last year, it made 2,257 high-rate loans in the Carolinas, more than any other lender. See more on this subject here.
Consumer advocates say HSBC is not concerned with consumer satisfaction over time. Polling immediately after a loan closes and before the consumer is abused is not a real measure of satisfaction. Advocates also point out that HSBC’s former Household International division turned to credit cards as a primary source of profits and does not make first mortgage loans at all any more. HSBC prefers to secure collateral interest in property through refinancing. “Before anyone regards Tom Detlich as an authority let’s examine his actions while threatening customers as Aldinger’s underling” said a member of Household - HSBC Watch. “The bottom line is HSBC didn’t change much if they didn’t have to following Household’s predatory lending embarassment.”
Ameriquest’s settlement, and Household International’s settlement, did not cover those who got loans through brokers, leaving thousands of people with high cost predatory loans and no recourse, excluded from the settlements and headed to foreclosure.
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When it announced its $14.6 billion purchase of North Fork Bancorp last month (March 2006), Capital One Financial said the New York market would be its focus as it moved away from credit cards to become a retail and commercial bank. HSBC remains heavy into credit cards as signalled by HSBC’s acquisition of Metris. There is plenty of room for tricks, scams, shady tactics and late payment lies to make credit cards profitable for HSBC. Their credit card operation is run by Household International, which is still equated with predatory lending and high interest loans!
Moments ago a hotline caller told us HSBC charges $6 for using the online payment website and $15 to pay by phone. She went on to say all payments to the account are applied to the lowest interest rate. HSBC charges the fees as a new purchse to the account. The $6 or $15 fee to is accumulated as new purchases and charged the highest interest rate. Why would anyone tolerate this predatory action? This credit card rates the lowest possible score, in the callers opinion.