HSBC Debt Collection Agency – Do You Need to Pay?

Have you been surprised by a letter from HSBC Debt Collection Agency? Are you unsure if you need to pay? You’re in the right place. Each month, more than 170,000 people visit our website for advice on debt matters. 

In this easy-to-follow guide, we will explore:

• Who HSBC Debt Collection Agency are and why they might be contacting you.
• Basic details about HSBC debts.
• How you might be able to write off some HSBC debt.
• The next steps if you can’t afford to pay your HSBC debts.
• How keeping up to date with your debts and your credit score may be affected.

We know that getting a letter from a debt collection agency can be scary. After all, nearly half of individuals who deal with debt collection agencies have experienced harassment or aggression¹.

Don’t worry! We’re here to help you understand and guide you through your options. 

The basics

If HSBC Debt has got in touch, you may be a little confused and worried. Why are they getting in touch? Who are they? What steps to take next? Understanding HSBC debt is the easiest way to work out your options when it comes to handling the matter.

Who they are

HSBC is one of the biggest banks in the UK – and one of the ‘Big Four’ major clearing banks in the UK. They have over 1800 physical sites in the UK, and 8 million customers to whom they provide services.

Globally, however, they provide banking services to over 40 million customers. So not only in the UK are they a major company, but also across the globe. 

On HSBC’s Companies House page², you can see that they have the company number of 00014259, and that their registered office address is 8 Canada Square, London, E14 5HQ. This information means that they are a legitimate company, so you should treat their correspondence seriously.

Why they’re getting in touch

HSBC Debt could be getting in touch for a variety of reasons. First and foremost, you would have to have an account or some sort of banking arrangement set up with HSBC. 

If you do not have, or have ever had, any dealings with HSBC, then you should get in touch with them as soon as you can with regards to HSBC debt, as it is highly unlikely the debt will be yours. It is, however, quite rare for them to contact you in error.

If you do have, or have had in the past, an account with HSBC, then it is likely that the debt is indeed yours. Make sure you read the letter that HSBC Debt sends you very carefully in order to find out what the debt is in regard of. 

It could be with regards to anything – from a missed payment towards your credit card through to a utility bill taking your account over your overdraft limit. HSBC Debt will specify why they are getting in touch though.

Typical Collection Process

HSBC will call or send a letter if you’ve missed a payment. This is completely normal, as it’s part of the first stage of the debt collection process.

Here’s a quick table that explains the debt collector timeline. If you want to learn more or require further advice, be sure to check out our specialized guide.

Stage	Actions	What you should do:
Missing one or two small payments	Calls and letters from the debt collector asking for payment. They may enquire about reasons for missing payments.	Contact the debt collector and offer to pay what you can. If you are struggling to pay the debt, get in touch with us to explore your options.
Missing large or multiple payments	Their contact will become more frequent, urgent, and threatening.	Contact the debt collection agency and offer to pay what you can. You may also make a complaint if you think the letters are a form of harassment.
Debt collector visit	After a few months, if the debt is significant (£200+) you will receive notice of a debt collector visit. They have to notify you before arriving. Debt collectors cannot take anything from your home – they may only ask for payment.	If a debt collector shows up at your home, ask them to show proof of the debt and their ID through a window. Do not open your door or let them in. You can arrange a payment plan with the debt collector, but make sure to get a receipt of this.
Court	If you still do not pay your debts to the original lender/debt collector agency, they will take you to court and either attempt to: – File a CCJ against you. – File an attachment of earnings order. – File a lawsuit against you.	You must show up to your court date. From here, you can either dispute the debt, or the judge will likely suggest a manageable repayment plan for you.

The next steps

Now you have the basics about HSBC Debt and why they might be getting in touch, we go into the next steps in dealing with them. You may even be able to beat the debt collectors at their own game.

» TAKE ACTION NOW: Fill out the short debt form

Collecting information

To make sure that the amounts and the numbers line up, you’ll want to have a look at any previous correspondence you might have received from HSBC Debt. 

These will have the details of any previous occasions HSBC Debt tried to reach out to you, and you may well have accidentally let these slip through the cracks. 

Compare the amounts on each letter. If the amount on the most recent letter from HSBC Debt is different, you may not have to pay them. But keep in mind that interest and other administrative fees can be added. This could mean that the amount owed will change from letter to letter.

Keeping track of HSBC debt and organising debt correspondence will help keep your records up to date. This will make communicating with companies about your debt much easier and they won’t be able to argue with you in the future!

Don’t ignore them

You may think that if you ignore HSBC Debt, they will simply leave you alone. This is never the case when it comes to debt collectors and debt collection agencies. They are notorious for their persistence, and they’ll keep on sending letters and calling your home until they get a reply from you. 

We always recommend responding to debt collectors – even just to question the debt’s validity. Remember, you have the right to request proof of the debt. They have to prove it or they can’t charge you.

There are consequences of ignoring HSBC debt that can be very difficult to overcome.

If you continue to ignore them, then HSBC Debt may take further action. They could either escalate the matter to a private debt collection agency, who will continue with the strongly-worded letters and calls to your home or they will issue a County Court Judgement against you.  

HSBC Debt could also contact some bailiffs to come to your home and recover goods to cover the value of the debt. So it’s important to reach out to them as soon as you can.

Proving the debt

If you are still uncertain as to whether you owe the debt, you can request them to prove the debt to you. This requires you to send them a ‘Prove the Debt’ letter, which they are then obliged to respond to, with all the details of the debt they say you owe. If they can’t prove it, then you won’t have to pay HSBC Debt anything.

From our experience, requesting debt verification is a step that too many people overlook!

Follow our ‘prove it’ guide with letter templates and get them to prove that you owe the money.

Statute-barred debts

If it has been 6 years – or 5 years in Scotland – since you last paid towards your unsecured debts and you have not written to your creditor about your debt during this time, it is statute-barred.

This means that the debt is not enforceable. It still technically exists, and you still technically owe the money, but there is no legal way for you to be forced to pay or for the debt to be enforced.

Keep in mind that not all debts become statute-barred!

Any HMRC debts, for example, will stay enforceable for decades. Any debt that had a County Court Judgement (CCJ) attached to it during the 5 or 6-year window it will be enforceable for the duration of the CCJ. 

If your debt is statute-barred, you can use our free letter template to write to the debt collectors from HSBC and explain the situation.

Understanding statute-barred debts can be challenging, so if you are unsure about the status of your debt, you can contact a debt charity for some advice. Their advisors will be able to look at the debt in question, determine its status, and advise you on your next steps.

In these situations, we don’t recommend writing about your debt as this may reset the statute-barred timer.

What If I Can’t Afford to Pay?

If you can’t afford to pay your HSBC debts, or if you have other unsecured debts that you are struggling to balance, you may benefit from a debt solution.

There are several different debt solutions available in the UK, so we recommend speaking to a debt charity as soon as possible. Their advisors will be able to look at your finances in detail and help you work out which debt solution will work best for you. They will also be able to provide you with more general advice for managing unaffordable debt.

We have linked a few charities that offer these advisory services for free below.

There are several different debt solutions available in the UK, so we recommend speaking to a debt charity as soon as possible. Their advisors will be able to look at your finances in detail and help you work out which debt solution will work best for you.

We have linked a few charities that offer these advisory services for free below.

Debt Management Plan (DMP)

A DMP is an informal debt solution that lets you pay off your debts via a single monthly payment.

Because it is informal, it is not legally binding so you are not tied into a DMP for a minimum number of payments.

Individual Voluntary Arrangement (IVA)

An IVA is a formal agreement between you and your creditors. You agree to pay a monthly sum that is distributed amongst your debts, and your creditors agree not to contact you during your IVA.

IVAs typically last for 5 or 6 years, and any outstanding debt is wiped off when it ends.

Keep in mind that IVAs are not suitable for everyone. You need to owe several thousand pounds to more than one creditor to be eligible. You also need to demonstrate that you have some disposable income every month.

Trust Deed

IVAs are not available in Scotland. Instead, you will need to opt for a Trust Deed.

Trust Deeds work in the same way as an IVA – you pay an agreed sum each month that is shared amongst your creditors, they can’t contact you, and any leftover debt at the end of your Trust Deed term is written off.

Debt Relief Order (DRO)

A DRO is a good option for those facing financial hardship with no assets and little income.

For 12 months, you make no payments, but your creditors freeze your interest and don’t contact you.

If your finances haven’t improved during this year, you may be able to write off your unsecured debts.

Bankruptcy

If you have debts but no realistic possibility of ever paying them off, you may need to declare bankruptcy.

Bankruptcy has an unfair stigma attached to it as it may be your only way of getting a financial fresh start. That said, it is a serious financial situation that should not be taken lightly.

Sequestration

Sequestration is the Scottish version of bankruptcy.

If you have little income and no valuable assets, you may be able to apply for a minimal asset process bankruptcy (MAP). A MAP is a quicker, cheaper, and more straightforward version of sequestration, so worth considering.

Can It Affect My Credit Score?

Yes, HSBC debts can affect your credit score.

Once you have missed a few payments or defaulted on an account with your original creditor – which negatively impacts your credit score, too – and your debt is sold to collectors, it may appear as a second collection account on your credit file. If they don’t add a second entry to your credit file, the entry for your original debt can be changed to add the debt collection company’s information.

These collection accounts will negatively impact your credit. They are visible for 6 years and will impact your ability to get credit or use some credit products during this time.

This is because companies use your credit file to see if you are a ‘high-risk’ customer – someone who might have difficulty paying their bills on time. If you have a CCJ, you have had such trouble paying back your debt that someone had to go to court about it.

Understandably, companies are going to be reluctant to give you credit!

After 6 years, it is no longer visible on your credit report and you should find it easier to get credit again.

You also need to be aware that there are effects of debt solutions on your credit score. Any debt solutions that you use will also be visible on your credit file for 6 years, and your credit score may be affected. However, once these 6 years are over, your debt solution will no longer be visible, and you may find it easier to get credit again.

HSBC Contact Information

Website:	https://www.hsbc.co.uk/
Phone:	Existing customers 03457 404 404 from the UK +44 1226 261 010 outside the UK 08:00–20:00 every day Non-HSBC customers 03455 873 444 Within UK +44 1226 261 010 From outside the UK

That should bring you up to speed with HSBC Debt, and how to deal with them. Below, we will answer some of the more commonly asked questions about HSBC Debt, and debt collectors in general.

References

1. Indebted Debt Collection Survey
2. GOV.UK – HSBC Bank PLC Overview