Household HSBC Watch

Customer service representatives - and Best Buy employees - are reported as telling the customer about their ‘no interest no payment’ plans for 90 days, all the way up 12 months. these reps are wrong. The Best Buy website clearly states this:

No interest for 12 months. Offer applies on qualifying purchases only. As of 12/07/2005, required minimum monthly payment is greater of $10 or 1% balance plus billed Finance Charges plus any late fees (if applicable). Interest will be charged to your account from the date of purchase if plan balance is not paid in full within 12 months or if minimum monthly payments are not made.

Why do Best Buy store clerks and/or HSBC CSR’s (customer service representatives) tell the customer they don’t owe any payments? Because it immediately puts the customer in default. Many people won’t open their statements if they think they don’t owe anything for a year. Why bother. Little know to many is the fact that Best Buy gets part of the additional profit from resulting late fees, higher interest, past due fees, etc. The percentage given to Best Buy is called ‘ongoing compensation’.

While there is little or no profit from zero percent financing, there is a huge profit from lying to the customer, telling them about ficticious ‘no interest no payment’ plans. One question remains. Do they do it on purpose or are they just ignorant of the facts? Are they poorly trained by Best Buy, or trained to stab customers in the back? Either way the practice fits the description of predatory lending. HSBC’s part of the Best Buy Consumer Electronics credit card operation is operated by Household International. One of the nation’s biggest predatory lenders, Household is now called HSBC Finance Corporation as part of HSBC North America.