Commercial Credit Card - Can bank do this?

[bryan]

We are a relatively new business - trading since July 2007 and all was going well. We make a small profit each month whilst still increasing our stock. However, we do have a seasonal trend and December was not good for us, with half the sales we anticipated. It was just one month and January and February are going great with sales exceeding expectations.

We decided to be proactive in December and asked the bank to reduce the payments on our commercial card to the 3% rather than payment in full, as per our terms and conditions, for the 21st January payment. Our commercial manager refused without giving any explanation and this put us £3k overdrawn. We have tried to get an explanation but all she says is 'there are clauses within clauses'. Our company solicitor has reviewed the contract and he can see no clause that allows them to do this. Our contract says we have the choice of either payment in full (which we have always done) or 3% of the balance.

I have confirmed with the commercial card department on the bank that there is no reason why we could not have paid 3%.

Tomorrow we are having a face to face meeting with our commercial manager and her boss. So far they have refused every direct debit, charged us over £400 in bank charges and, as we cannot pay ourselves wages at the moment, our current account is now £178 o/d too so we are getting charges on that.

I worked out today that, had they allowed us to pay the 3% then we would have nearly 3k in the bank AFTER paying our suppliers, warehouse rent etc. At the moment we are still £1200 o/d and now in arrears with 2 suppliers and our rent.

Any advice on the best way to tackle this with them tomorrow? Our solicitor wants her to explain in writing how she reached this decision when the terms and conditions on the account clearly state we could adjust our payments.

[Alice3537]

Just to clarify - had you spoken directly to the department dealing with cards, they would have allowed this without question or referral? And it's an option clearly stated within the literature?

Who the heck do you bank with?

You need to write down your questions and points (so that you are able to fully cover everything you need to), take a full written record of their responses and hot foot it back to your solicitor if you don't hear what you want to!

What action did you take in December when your commercial manager refused? Did you question at that point? How long did you wait before ringing the card department? Was that before or after the total was deducted from your account?

[bryan]

I spoke to the commercial card department and they said it wouldn't be a problem and all cards had that option. However, as we have a commercial manager, she is the one who had to change the payment percentage, so I called her and she refused. It is clearly in our copy of the terms and conditions and it is also printed on the back of every statement. I telephoned the commercial card department again mid January to clarify one more time and was told that every commercial card has the option of payment in full or 3% and it can be chopped and changed monthly.

It was early January that she came back to us and refused (we were thinking we were being proactive by sorting it way before the card was due, as soon as realised sales were 1/2 of what we expected) We repeatedly asked for clarification as to why and she kept saying there are clauses within clauses. In the end, a fortnight ago we consulted our company solicitor and he reviewed the contract and sees no basis for her decision. I then contacted her boss and the meeting for tomorrow was arranged. In the meantime, she has actually cancelled our card completely..... heaven knows why.

We've spent the last 4 days pouring over figures and doing detailed figures, forecasts etc. I think we are fully prepared but wanted to ask the question of people who have been in business longer than us. We just have no idea where we went wrong, or even if we did go wrong. Our accountant says we are doing better than most businesses of less than a year old, as we owe very little and have over £80k of stock that we own (all bar £2k worth). This we have built up from a £10k initial bank loan and we have never defaulted on anything.

And we recieved a letter from the commercial manager stating that she believes we are running at a loss (utter rubbish), she is furious that we used the commercial card in Tescos and believes it was for personal use (it was staff Christmas presents!), she hasn't seen any accountant prepared figures (she's never asked for them) and if we are to move forward she wants monthly figures in a format that she dictates.

This is a new commercial manager who only took over our account in October when our old manager was promoted.

[Blush]

remind me never to ask for a commercial manager:eek: She sounds like a little hitler to be honest. Why couldn't the commecial card dept just sort it for you though? I don't understand why you had to go through her.And why is she checkign all your transactions on the card too?

[bryan]

She has tagged every single account that we have to her. So any enquiry on any account, be it mortgage, personal savings, personal current or business account has to be dealt with by her. And we didn't ask for her, we were allocated one when my husband opened the business account - it's his business and I work for him on a self employed basis.

Hitler isn't a term I'd thought of (although I'd thought of many, much to my husbands amusement!!) :rolleyes: :rolleyes:

[bryan]

Oh, we did learn one thing that never crossed our minds. Never put all your eggs in one basket. Today we opened a new personal current account with Lloyds and will be gradually moving all our accounts away from this bank, whose name I won't mention, but they are known by 4 letters and used to be what is commonly referred to as the middle part of England ;)

[Ashley]

I made the same mistake when i was green, it took years to get over. I feel for you and really been where you are.

Now I have 3 company (TSB, Barclays, Co-Op) bank accounts with different banks and a personal account with Abbey and a savings account with your lot. I will never give one bank control over my money again. Right of off set, god I wish I had understood that. Every time I talk to someone who tells me how good MR X from x is and he looks after their personal and business accounts and he really good, I try to explain it a trick and not to have personal accounts at the same place.

Good luck tomorrow, and ember they would not wee on you if you where on fire if they try the nice guy game. BTW IMO you do not need any luck as these meetings are pointless but you find that out in time also :D

[bryan]

There's only one question we really want answering tomorrow and our solicitor has asked for it in writing. What gave her the right to insist on full repayment when our account had not had any problems and our contract states we have the option of payment in full or 3%. It also states in the contract that they can vary the terms by giving 30 days notice in writing. We have not had any such variation served on us. If they cannot give an answer and prove our agreement to vary the terms, our solicitor has advised we look at pursuing further actions, although I don't know what that would be at this point.

[INDIZINE]

Take your complaint beyond her and the manager if you get no joy. Obviosuly she is out of her depth.

[shibs]

If things don't go smoothly tomorrow, I would suggest visiting your GP for official confirmation and diagnosis of the STRESS you are suffering to include in any future action against the bank. (Just a suggestion, as you may not realise the stress this has caused you or even that you are suffering) ... Best of Luck ,,, though by what you have stated the bank should be grovelling and offering you an apology with compensation ,,, accept no less !! :):cool:

[maxine]

Hiya Bryan

I think your treatment by the bank concerned is disgusting. I have called the financial ombudsman for you just to check if they would deal with this sort of case and you can contact them on 020 7964 1000 (switchboard) Link to their website below.

http://www.financial-ombudsman.org.uk/contact/index.html

Good luck
Max

[bryan]

Thank you for that Max. The meeting is at 2 so I'll give them a call prior to that.
I will update you after the meeting.

Cheers
Di

[Jenni@FarrantFrost]

Agreed, this is absolutely disgusting, and this needs taking higher up, all penalty bank charges an associated costs refunded and a grovelling apology from this woman.

Best of luck

[maxine]

Hi Di (sorry thought your name was Bryan!)

Yes let us know how it goes :) we are all routing for you!

[bryan]

I can't work out how to change my name. I started typing in one of our email addresses and that's how I ended up with Bryan. It's our surname (although I answer to anything that isn't rude!)

Have now got all the information we need to make a complaint to the FSA. 30 minutes to go and we are making sure we have everything we need. I'll be sitting back and taking notes as it's my husbands business.

Thanks everyone who's offered help and support.

Di
x

[Blush]

Think that is my business account:eek: I don't have any other accounts with them though and I opened it online so haven't dealt with anyone in person.....yet:eek:

Oh, we did learn one thing that never crossed our minds. Never put all your eggs in one basket. Today we opened a new personal current account with Lloyds and will be gradually moving all our accounts away from this bank, whose name I won't mention, but they are known by 4 letters and used to be what is commonly referred to as the middle part of England ;)

[Jenni@FarrantFrost]

Think that is my business account:eek: I don't have any other accounts with them though and I opened it online so haven't dealt with anyone in person.....yet:eek:

I think the problem with business accounts comes when you need their co-operation, eg getting credit. If you think you will need this with them in future, talk to them in good time, and make sure you read the fine print. Remember business banks are robbing ba$tards so make sure you look after number 1!! ;)

I hope the meeting with the OP went well this afternoon. Fingers crossed :)

[bryan]

Glad that's over. The outcome is that we are getting all charges back, our commercial card is reinstated and letters will go to whoever needs them explaining that the bank was in error. We are happy with the result. It was claimed that we were informed that our card was set up as payment in full and that it couldn't be altered. This is not true and they were asked to provide documentary evidence to support this claim, which they couldn't. It was then claimed that we were running at a loss and would have gone overdrawn in any event - at which point I pulled out all the figures that we had from our book keeper showing the last 6 months trading, plus the account summary I'd done showing our balance had they accepted the 3%. And by the end of it they had reinstated our card and our account is now back in credit - where it should have been all along.

And on that note, I'm going to spend some time with my horses and relax as the past couple of weeks have given me so many grey hairs it's unreal :eek:

[Jenni@FarrantFrost]

Woohoo! Congratulations, Di, I am SO glad it turned out in your favour.
Still such a shame it had to happen at all, but hopfully they won't dare mess you about in the future.

Enjoy your R&R, you deserve it.

Jenni :)

[maxine]

HEY HEY!! Well done - that's great :) Pity it had to happen but you got there in the end.

[lockie]

Are you going to stay with them after all this ?

[Alice3537]

Are you going to stay with them after all this ?

Changing banks is up to them - changing account manager is a MUST!! :)

A/M clearly knows little to nothing about running a business or looking after a business account - very different to overseeing a personal one.

[CKG]

Glad it's all sorted.

I'm having awful trouble with HSBC at the moment and know how pathetic thier 'systems' are.

They don't seem to grasp the concepts of cash flow in any way shape or form.

[bryan]

Not sure what we are going to do re the business accounts. Plans have already been put into place for the personal accounts.

It's been a tough but rewarding first 6 months or so and we have just launched an online side to our business as well as the face to face and mail order side (we sell equestrian goods). All looking good so far and I'm now a lot more optimistic. Everything is in writing (or will be by Friday), we know our responsibilities and they know theirs and it's been made clear that unless it's in writing - it doesn't exist!!

[Blush]

glad you got it sorted it in the end:D

[just.b]

Glad you won! This was just complete nonesense. I am having problems with HSBC too and keep complaining to them. I'll be moving my personal account away from them as soon as I can! And the mortgage, and the joint account, and the credit card. Might take me a few more months but can't wait for the day. Thieving b@$t@rds$!