Balance transfers to a new credit card with 0% interest for a fixed period are a popular and sensible way to handle debt. The new bank will allow you to pay off other bank borrowing over a certain period with regular direct debit payments. But what if the new bank increases your credit limit to allow you to spend on the new card? In the case below, HSBC allocated payments in to the account towards the new borrowing against the transferred 0% balance, thus ensuring that you remain indebted to the bank on a high interest rate, in breach of their own terms and conditions, which state that payments will the allocated to the highest interest bearing part of your debt.
Clearly this wasn’t one person that made a mistake. HSBC’s software must be programmed to allow this to happen. When caught out, in this instance, HSBC put their hands up and reallocated the payment. But how many other customers are they defrauding in this way, and are other banks also in on the scam?
abiye