Household HSBC Watch

The final outcome of Shea vs Household was as follows, and is filed in Superior Court for the State of California, Case Number 00CC12585, published March 19, 2004. The Honorable Stephen J. Sundvold presided.

The lawsuit alleged that Household imposed certain finance charges, late fees, a overlimit fees between October 20, 1994 and March 18, 2004 that were not authorized by Household’s credit card agreements and were in violation of state law. Household denied wrongdoing and said they would vigorously defend the lawsuit if the settlement is not approved. Household, now owned by HSBC, and the Plaintiffs agreed, nevertheless, to settle the lawsuit to avoid the risk and uncertainty inherent in any litigation.

The original suit by Shea revolved around his unwillingness to accept changes to his credit card agreement. The final outcome, published by the State of California, joined Shea’s suit with other suits. JAMES B. SHEA, an individual, ELLEN MANDEL, an individual, MARK CASAS, an individual, MARTHA VASQUEZ, an individual, and VELMA TEVIS, an individual, on behalf of themselves and all others similarly situated.

HSBC owned Household International at the time of the settlement. Court documents address all individuals who incurred finance charges on their accounts; and/or incurred late fees for payments credited on the business day immediately following payment due date; and/or incurred an overlimit fee in at least one month under specific circumstances.

The final award was $10 million. Cardholders were granted relief through late fee awards, overlimit fee awards, and finance charge awards. Members of the class were required to release Household from all future claims, including any that could have arisen out of any negative credit report of a Class Member.

Late application of payments, often one day after the due date, is a serious matter which negatively effects the consumer and their credit score. Each week we receive similar complaints from states other than California. While legal precedent covers the period from 1994 through 2004, new reports from 2004 through the present indicate that the National Association of Attorney’s General should revisit the matter.

New reports frequently state that payments to other companies, including credit card companies, are mailed on the same date as the payment to HSBC. However, while all other payments are credited in a timely manner, HSBC payments are credited as late payments, often one or two days immediately following the payment due date. While credit card holders are required to submit to binding arbitration to resolve the matter such a requirement does not pertain to state and federal investigators. Customers know what happened but are helpless to defend themselves.