Household HSBC Watch

AK in Oregon sent this op-ed piece. We are publishing it here instead of in our complaints blog:
“HSBC- predatory lenders who slam insurance, offer over market rates and fees, and treat employees with disrespect.

When I started working at HFC I was just out of college. I was excited to have a job that paid more than minimum wage, and the idea of eating more than Top Ramen for every meal. I was very young, and had no idea how finance or mortgages worked. I found this was common with most other people I worked with. I also found this gave the company an advantage because it left me vulnerable and eager to please. This left me in a position to believe everything I was told, as well as accept standard company practices as normality. It wasn’t until after I experienced working for another company, as well as growing and maturing myself that I realized nothing about working for the company was normal, let alone acceptable.

I find it best to start from the beginning, to give the best understanding not only of what I went through with the company, but also show that the company encourages demeaning behavior, customer deceit and predatory lending.

I began work with HFC in December 2003. I had no idea what a mortgage was, let alone a refinance. I received training on the basics, but my third day on the job I was put on the phone to solicit. I was told this was because it didn’t matter if I knew what I was selling, as long as I could get people excited enough to buy it. As my training continued, I was told time and time again that HFC offered programs that no other lender offered, primarily 100% financing, and a rate reduction program for on-time payments. I pushed this strongly on all my customers. It wasn’t until later I realized that many companies offer 100% financing, and other companies such as Countrywide offered the same type of rate reduction program.

During the first year of my job I was working constantly. Not only a normal Monday through Friday, but most Saturdays as well. We were not authorized to have overtime, yet would be required to solicit until 9pm to ensure we met application quota for the day. In order to ensure no overtime, they told all of the young aspiring account executives that promotions and advancements in the company will only come if we go beyond the call of duty and rise above the mediocrity. They also avoided overtime by telling us we had to take longer lunches during the day, or take more breaks throughout the day because we needed to be at the phones when customers were available. According to the company, that included morning, afternoon and evening.

The company also liked to give back to the community. As most companies do, especially ones like HFC that had suffered so much after a debilitating lawsuit. Of course employees were always reminded that participating was going above and beyond, that upper management took notice and things would not go unnoticed. Soon though a District Manager in Oregon was making philanthropic events mandatory. Employees from Bend, Hillsboro and Eugene were forced to drive all the way to Washougal for a 4 hour event, were not offered accommodations or meals, and were still not authorized to have overtime. If employees refused to participate, they faced the potential of corrective action. Is not the definition of a philanthropic event one where people volunteer their time?

One of the practices the company encouraged was having Account Executives use fake titles, such as Regional Account Manager, so that customers would be more encouraged to take an application. If we were questioned on how we received their information, I was trained to tell them that we worked with local title companies to help customers get out of an ARM, which was a lie. If a customer was asked to be put on the DNS (Do Not Solicit) list, often times it would then be a joke in the office and the customer would still receive solicitation calls. Even if the office knew a customer was on the DNS, we were advised to still call the customer and tell them it was just a courtesy call even though we were just trying to get an application and up sell out of it.

In that time I learned how to sell a 1st mortgage to a customer even if it didn’t make sense, and a 2nd mortgage was a better option, but they never knew that because I wanted to avoid corrective action for not having enough 1st mortgages in a month. We were trained how the borrower would save money over 30 years even though company statistics showed our customers refinanced every 14-18 months. We would use the HOLP (home owner loan proposal) and conjunction with a T-chart to show how the 5% origination, monthly cost of the loan or high interest rate were worth it because we would meet the customer needs. Often times the customer would pay $10,000 in total fees and origination just to take a few thousand dollars of equity out of their home. But we would always advise it was worth it because our understanding was that is was all a tax write-off. We would continuously rewrite current customers, not because the customer necessarily needed it, but because it we would normally give them a higher interest rates, more cash out and just more fees for the company. The company used NTB (net tangible benefit) guidelines as a way to justify putting borrower’s into 10% 1st mortgages as well as a façade to the government to help avoid another costly lawsuit.

I was able to sell insurance because often times I would have to resort to arguing and belittling the customer into taking it to avoid having to call my district manager and divisional manager and explain otherwise. There were even times when a customer did not take insurance on small NEW or NRL (consumer loans); often time management would not allow loan paperwork to be run. While Account Executives were the only employees not directly paid on insurance because of the lawsuit HFC went through, it was a large factor in annual reviews as well as a requirement for advancement. Sales staff was also continuously pressured by BSM’s and DSM’s to sell as much insurance and other add-on’s, such as Home and Auto, because it was a large part of their compensation plan. I even had an Insurance Manager tell me I would go no where in the company and would never get a raise or promotion, unless I exceeded insurance quotas. This was the same manager who went throughout the division training employees’ bait and switch selling techniques.

After a year or so with HFC they came out with the AIB (auto refinancing) program. I convinced customers to take AIB applications even though it resulted in multiple credit report pulls, and justifying it to the customer that it didn’t really affect their credit. We were told to sell customers on the benefit of being able to skip 1 month payment since the payoff of their old line and pushing out the new loan payment 45 days. We were told it didn’t matter if we were extending their term a few more years or raising their interest rate, often times to 13% or higher.

Soon the company was giving me promising hopes of managing a branch. I look back now and wonder why they would want an inexperienced 23 year old managing other employees and realize that such a young age only made it easier for them to mold into what they wanted. I received ongoing promises about my potential and plans for me, only to have a all of them left empty a year later. I found opportunity in California with the company in December 2005, and took it.

When I was first in California I was an Assistant Manager, and was quickly doing management relief assignments. Within 2 months, I was offered a Branch Manager position and took it. I was told what a great branch I was taking, what great employees, what great money, etc. Soon that turned into employees that were already transferring to branches closer to home, an assistant that were constantly under corrective action, and not seeing an increase in income. All the while my District Sales Manager (DSM) and HR manager, Kristi Heimmermann, were telling me time and time again what a great job I was doing, that I was a leader for the district, and what an asset I was to the company. Yet things seem to unravel quickly.

In June 2006 I lost my assistant, and at the same time was responsible for interviewing for 10 other offices as well as training 2 new employees in my office. I called my DSM and HR multiple times a week asking for help because I was overwhelmed. There was an office 1 mile from mine, which had a manager, 3 seasoned employees and an assistant. I asked if the assistant could come time my office for 4 hours every Monday to help mandatory things like loan shipments, audits and payments. I had no assistant and 3 new hires and was advised that there was no office that could spare anyone for 4 hours a week to help me. I became more and more frustrated and burnt out. I was working in the Bay Area where rent was $1000 a month, and they expected to hire an assistant at $12 an hour. Most people would laugh when I told them what the pay was. Starbuck’s was offering a hire starting pay than we were. And we were supposed to be the 3rd largest bank in the world.

During all of this I also let my district manager and HR know that my plans were to eventually move back to Portland. I had also emailed Pacific Northwest Headquarters and while they advised I would have management opportunities north of Seattle they could not talk to me formally until California Headquarters authorized it. I understood and was advised by my management they supported my move. At the same time I was still looking for an assistant, even if I wasn’t going to be with them long term bottom line was it is a position required to help any office be successful. Finally after hundreds of screenings and countless interviews, I found a sales assistant.

The same day I extended the offer to my new assistant, I received a surprising phone call from my DSM and Kristi Heimmermann. After all the reassuring of what a great job I was doing, I was told that they would only transfer me if I immediately stepped down to Assistant Manager. Needless to say I was shocked, especially when they told me it would also be an immediate 33% pay cut. They were reducing my salary to that a newly hired employees, and when I said I needed to move to Oregon as soon as possible because I couldn’t afford my rent on such a reduced salary, they said I would have to stay in California for at least 1 month before they would authorize a transfer. I again said it was not financially feasible for me, and I was told I could just stay longer and try to bonus, even though bonuses are paid out the end of the following month. Even then they took over 2 weeks to let the Northwest know they could talk to me about transferring.

While it was good to be back in the Northwest, things were still doing downhill. The market and economy took a sharp decline and this was seen, felt and heard throughout all offices. Soon the company rolled out a new corrective action process that ultimately was a form of optimization. When I say optimization it is only a fancy, corporate word for layoffs, and the company offered small severances to help offset any guilt or backlash. Employees not only saw the 500 branch closings nationwide as a loss in job security, but also the ongoing optimization. Many began to look for other jobs; they had to prioritize their families and responsibilities. Headquarters and HR started to search popular job sites like Monster.com to see if current employees had their resume posted. If an employee was found, they received a call from the DSM and HR, and then were lead through a series of questions towards company integrity and loyalty, and in ending be advised this would be noted and on their employee record.

In closing I realize there is even more to this that I could add, but feel I have already given more than enough. While writing this I took time to reflect on all my experience with HFC, Beneficial and HSBC. Sadly I look back with disappointment and failure, and am ashamed to have 4 years of my life invested in a company that lacks integrity and character. Frank Outlaw said “Watch your thoughts; they become words. Watch your words; they become actions. Watch your actions; they become habits. Watch your habits; they become character. Watch your character; it becomes your destiny.” HFC, Beneficial and HSBC have created their own destiny, and one that I do not agree with morally, ethically or professionally. “