HSBC's Leadership in Private Label Financing

Claimed by HSBC: "New Merchant Relationship Underscores HSBC's Leadership in Private Label Financing"

Facts behind the story:

1. HSBC's private label financing is by troubled predatory lender Household International, now a wholly owned subsidiary of HSBC.

1. Merchants receive ongoing compensation from private label credit card accounts.

2. Household, even while owned by HSBC, credited customer payments late for a period of almost 10 years, although they admit no guilt. (re: Shea v Household)

1. Customers are bound by binding arbitration in most cases.

2. Law suit known as Shea v Household was the latest filed in the U.S. as of October 2004.

1. When Household - HSBC credited payments late, the average credit score dropped by 70 points.

2. Household collected illegal late fees, overlimit fees, and interest charges from consumers. (re: Shea v Household)

1. Credit applications contain a "Dual Application" whereby the customer may apply for a MasterCard.

2. Customers report receiving their MasterCard even after declining it on the application.

1. The MasterCard has a zero to annual fee, usually set at .

2. If you decline the MasterCard but receive it anyway, and you don't pay the you are sent to collections.

1. The average credit score drops 150 points or more for a consumer with an account in collections.

2. Former CEO of Household International, and now Chairman of HSBC North America, William Aldinger sits on the board at MasterCard International.

1. MasterCard agreed to pay billion (USD) to settle a class action lawsuit in the U.S.

2. Household - HSBC agreed to pay million (USD) to settle charges that it collected late fees, overlimit fees and illegal interest from October 1994 through March 2004.

1. Household and thusly HSBC have racketeering charges pending against them, filed in the state of Tennessee in October 2004.

2. Household has been charged with racketeering and corruption in conjunction with H&R Block, a U.S. tax preparer.

1. Regarding private label credit card financing, Household - HSBC would fail to mail a bill in the final months before interest free promotions were about to expire, thus trying to collect all interest on the account.

2. You cannot pay your private label credit card bill at the store that takes your card, such as Best Buy, Saks, Ruby Gordon and over 60 others.

1. Household agreed to pay 4 million (USD) to settle predatory lending charges in a U.S. multi-state settlement. Many homes were foreclosed and lives ruined.

2. Household agreed to a ceast and desist order from the Securities and Exchange Commission, relating to Household's "False and Misleading Statements Concerning Its Delinquent Loan Restructure and Forbearance Policies."

1. Household made so many bad loans that the majority of the more than billion of restructures per month were performed automatically, without any requirement that Household employees first contact the customer.

2. Insiders report that entire trays of payment envelopes mailed to Household - HSBC for the purpose of paying one's monthly bill were put back into the postal service, causing them to be "received late." (re: Shea v Household)

1. Household - HSBC customer service representatives, when questioned, stated that a monthly billing statement is a courtesy, not a requirement. United States Regulation Z, Fair Credit Billing Act, states otherwise, and the customer service representative's reply demonstrates lack of knowledge, training, leadership, poor supervision, and a legal liability for HSBC.