Consumers and consumer advocate groups have looked carefully at the overdraft practices of some large banks from the last several years questioning the fairness of the application and certain fees for account holders.

HSBC Bank overdraft practices have specifically been under scrutiny, as some HSBC customers feel they have been treated unfairly.

By law, banks must allow their customers to opt-in to their overdraft protection service if they have one. Overdraft protection is a service that many banks offer to help customers when the money in their bank account cannot cover a transaction that has been made.

Many banks charge their customer a fee for these transactions that can be as high as $35 or $40 per overdrawn transaction.

HSBC Bank Overdraft Practices

HSBC Bank is one of the world’s largest financial companies. HSBC claims that over 45 million customers are served around the world. It has been operating for over 150 years.

HSBC Bank has named their overdraft protection program “Select Credit of Overdraft Protection.” HSBC Bank overdraft practices include a $10 fee per day when a bank account is overdrawn. This may seem low compared to fees that other banks may charge under their overdraft protection programs.

According to the HSBC website, the Select Credit account is a “personal line of credit only available for customers who are opening and are approved for or hold an existing consumer deposit relationship (Checking, Savings or Certificate of Deposit) with HSBC Bank USA, N.A.”

There is a fixed introductory annual percentage rate, or APR, based on a customer’s creditworthiness for cash advances. This can range from 6.49% to 14.49%. Then, the variable APR will range from 6.49% to 16.99%, also based on a customer’s creditworthiness.

However, if a customer with Select Credit overdraws his or her account at HSBC Bank, this balance will be shifted into the Select Credit account where the APR is 18.99%. In essence, a customer may be charged nearly 19% of their overdrawn transaction annually and a fee of $10 per day until they pay their Select Credit balance.

The balance of this Select Credit account will be calculated daily. This is called the average daily balance and it is what the APR is based on. “The APRs are divided by 365 and rounded to the next highest hundred-thousandth of a percentage point to determine your Daily Periodic Rate. The Daily Periodic Rate is used to determine the amount of the periodic Interest Charge,” the HSBC Bank website reads.

When one attempts to navigate the HSBC Bank website, it may be considered confusing to some customers. The HSBC Bank overdraft practices are complex and for the regular checking account holder, this may prove to be too confusing to understand correctly.

Consmer advocates are concerned HSBC Bank overdraft practices may not benefit the customer and may serve to increase the bottom line of the bank itself. There are many customers who believe that HSBC Bank overdraft practices are unfair.

If you have been a customer of HSBC Bank and believe you have been charged unfairly for overdraft protection fees, you may benefit from speaking with an attorney.

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