- 24 August, 2008 -
- 2007 HSBC -
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With the United States in a recession the double-speak is interesting. Some call the recession of 2000-2001 a “mini-recession.” Now HSBC’s Douglas Flint has a “technical recession.” HSBC finance director Douglas Flint said: “The issue now is the US slowdown and whether it enters a technical recession, and what that does to the credit card and unsecured books.” They will take a pounding Douglas, and here is why: HSBC is not Chase or CitiGroup. Your credit card operation is predatory. Your processing centers are slow. And, most importantly, your customers are not stupid.
When cardholders make online payments for their Chase Card or Citi credit card the payments are processed immediately. With HSBC, customers are told that payments made one day early might be processed late. Customers are told that online payments should be made five days ahead of the due date.
When Citi and Chase cardholders pay by phone the payment is credited immediately. Not so with HSBC.
When Chase and Citi cardholders mail their credit card payments they are processed in a timely manner, as are payments made with automatic billpay from one’s bank. Not so with HSBC. So what do you think will happen? Is Douglas Flint hiding behind a false sense of security, knowing that all HSBC credit card holders are prohibited from suing, and have agreed to binding arbitration? (for readers, examine the fine print from HSBC)
It is a great possibility that HSBC Finance uses the delay time to factor the probability of making more money from the credit card holder, either by upselling, crediting the payment as a late payment, or simply extracting some other form of extortion. HSBC has a rating system that displays the value of the customer, based on factors such as credit scoring, number of late payments, products purchased, and home equity. Calculating the customer value and the binding arbitration clause allows HSBC to make certain decisions.
If someone with a FICO score of 800 and a perfect credit report actually applies for a Best Buy card, backed by HSBC, and has an interest-free promo for 6 months, that person will experience no problems. For someone with a FICO of 685, the person might be told that one payment arrived late, but the interest-free promo would not be declared invalid. Someone with a FICO of 590 would experience two late payments, all the interest would be due, and the interest-free promo would be invalidated.
Shady tactics, combined with delays in the HSBC system, means the customer has no way to prove their point or follow up. From the standpoint of HSBC it simply means the company is having their way with you. HSBC preys on the weakest people in the system.
Douglas, please tell us if “technical” is a result of the process, or a term defined by HSBC. For instance, as long as HSBC gets away with delays and shady tactics, that could be called a good thing. If lawsuits by regulators or the National Association of Attorneys General stopped the late processing payments, perhaps HSBC would call that a “technical recession” until HSBC finds another way to rape the customer.
Case in point. Household International was the last company to stop insurance packing. But now we see “Secure Plan” and delays if clients do not agree to one or two upsold products. That is the same thing as insurance packing. HSBC is not fooling anyone.
HSBC credit cards will take a pounding because people do not trust you. Those who can have already transferred away from HSBC. (Citi, Discover, and Chase send decent offers every month) HSBC credit card holders will exact some retribution by walking away from credit card debt just like they do with onnerous and oppressive home loans. Just because someone did not understand the contract and the upselling does not mean they will continue to pay after being socked with high fees. People know what is right and what is wrong.
People pay all of their bills on the same day. When all of them are received and the checks have cleared, EXCEPT FOR HSBC, then people know what is wrong. Do your homework Doug.