Monday, July 30, 2007

Unfair Late Fees

My husband and many of his friends and co-workers were offered a credit card through their union a decade ago. The credit card has always offered incredibly low interest rates because they are union members and up until recently, we've been happy with the card. Now we are going to have to cancel it and run far, far away.

A while ago, HSBC took over the company who originally owned the credit card. Now, there may be some people out there who are happy with their service, but I am disgusted. First, they use a telemarking service, 800 446 1022, to call you dozens of times per day asking you to sign-up for their “credit protection” services. Both of us have declined the service numerous times. I've even spoken to a supervisor who promised to take me off their calling list to no avail. I see on the Internet discussion boards that I am not alone. This company starts calling at 8am and proceeds to continue until 9pm. I no longer answer my phone if I see it is that number because being on their do-not-call list means nothing to them and after talking to the state, they say there is little they can do because we are customers of the credit card company.

This alone is enough to make me switch banks, but the breaking point came last month. Usually, I pay online to save postage, but a rash of thunderstorms kept knocking out my power and/or Internet. Without Internet, I can't pay the bills online, so I opted instead to mail out the payment six days before it was due. I could have risked it, but if you pay the same day with the Union card now, they slap on a $15 rush fee to process your online payment. You can call in your payment, but again expect to pay a $15 fee.

I paid my car payment, satellite, and Union card bills on the same day. The car payment and Union card were going to the same state – Delaware. Prior experience shows me that it generally takes two days for mail to reach this area. The car payment was received two days later and they posted it to my account that day and the check cleared the next. Satellite does in North Carolina took three days, but the check cleared on the fourth day. By last week, Union card still hadn't gotten my payment so I called. I learned from “Steve” that they need ten days to process mailed in payments and that any payment without the account number written on the check is automatically delayed because they separate payment coupons and checks when they open their mail. I still cannot get an answer as to why they do this. I've worked in banking and know that writing your account number on a check is a great way to become a target of identity theft.

After talking to another woman higher up in the company, she informed me that the company promises that they do not process any transaction that does not require the three digit security code on the back of the card. Liars! I've used that card online and have only been asked for the code twice. If the website is set up to ask for the three digit code, you do have to give it, but many sites still do not, so anyone could take the account numbers that people write out and then have the means to go on a shopping spree.

By now, my mailed in payment is late because they claim it takes ten days to process a check payment. So they slapped on a $40 late fee because they say they may well have the check, but until their staff processes the payment, even if they have it in hand, the payment doesn't count. So some schmuck who hates his job can sit on payments for weeks and make you pay the late fee. This is not sitting right with me. I wound up paying again, online, just to make sure the money has been paid.

This infuriated both myself and my husband, so he started asking his co-workers if they are having problems with their card payments now too. He knows many of them do not have home computers and Internet access at work is forbidden. Turns out, every single one of the half dozen people in his department who use the Union card have had this happen. While we are not alone, it strikes me that it is time for cardholders to ban together and start going after HSBC for causing delays with payments. Unfortunately, it is also a very hard thing to prove. They say it might be the payment got lost in the mail, and I can't prove otherwise unless I start sending payments with return receipts.

This leads me to wonder. The government is cracking down on credit card companies who are now becoming overzealous charging fees. How long before HSBC is in their sights?

If you are a member of HSBC, be very careful with your mailed in payments. They say they need ten days to process a payment once they have it in hand. I say that is very wrong and ensures I will be cancelling this account immediately.