HSBC Class Action Says Bank Adds Useless Insurance to Mortgages

HSBC Bank USA NA has been hit with a class action lawsuit alleging it took advantage of consumers by inducing them to purchase mortgages under false pretenses and pay higher mortgage payments than promised.

Plaintiff Saber Ahmed of California claims he entered into a mortgage agreement with HSBC which stated that he was to pay $1,773.94 per month.

However, on Sept. 14, 2016, he noticed that HSBC was charging him for hazard escrow insurance without his knowledge or consent.

According to the HSBC class action lawsuit, he was charged for this hazard escrow insurance even though he already had homeowner’s insurance through a different company.

Ahmed states in the HSBC class action lawsuit that his insurance company had provided the necessary declarations to HSBC in April 2016. Despite this, HSBC allegedly charged him for “unnecessary and duplicative” homeowners’ insurance.

“To date, Defendants have charged Plaintiff thousands of dollars that he does not owe as a result of [their] deceptive business practices,” the HSBC class action lawsuit states. Ahmed says he is not alone and that many other consumers have likely been misled by HSBC’s conduct.

Ahmed argues that HSBC was fully aware when it agreed to certain mortgage payment amounts that it would actually charge consumers a higher amount than indicated in the agreement.

According to the HSBC class action lawsuit, HSBC made these false representations “in order to induce consumers to purchase mortgages from Defendant under false pretenses and take advantage of them.”

The HSBC mortgage agreements allegedly misrepresented the nature of the mortgages. The HSBC class action lawsuit states that HSBC should have known that the statements included in the mortgage agreements were misleading and deceptive.

“Often times, Defendant would represent that consumers were forced to pay for insurance in order to deceive its consumers into believing that they owed a higher mortgage payment,” Ahmed argues in the HSBC class action lawsuit. He states that he purchased the mortgage from HSBC based on the agreed-upon mortgage payments. He says he feels misled by HSBC’s conduct.

By filing the HSBC class action lawsuit, Ahmed seeks to represent a Class of consumers who were charged by HSBC, without authorization, higher payments than they had agreed to.

The HSBC class action lawsuit asserts violations of several California business laws, including fraudulent business acts and practices, misleading and deceptive advertising and untrue advertising.

Ahmed claims that HSBC’s unlawful conduct poses a threat and a reasonable likelihood of continued injury to the proposed Class, and seeks an order prohibiting HSBC from continuing to engage in the allegedly illegal conduct.

Ahmed seeks injunctive, equitable and declaratory relief; damages; restitution and disgorgement of ill-gotten gains; attorneys’ fees and costs; and other relief deemed proper by the court.

The plaintiff is represented by Todd M. Friedman and Adrian R. Bacon of the Law Offices of Todd M. Friedman PC.

The HSBC Mortgage Payment Class Action Lawsuit is Saber Ahmed v. HSBC Bank USA National Association, Case No. 5:16-cv-02289, in the U.S. District Court for the Central District of California.