Welshdresser:

Can't really answer your exact question. Two years ago was the right time to fight this. Really depends whether there is a clause in the loan terms & conditions that requires it. Obtain the agreement and go through it with a fine tooth comb. If you cannot see the applicable clause you will need to ask HSBC to point it out. If they can't I would be very surprised if they are not sympathetic. Complain formally if you are not satisfied.

Next issue, its not obvious that in the circumstances it was right for HSBC to levy a first charge in 6 months and also not to give notice. You need to obtain the charges leaflet, link below but seems a bit long so no idea if it will work.

http://www.hsbc.co.uk/1/PA_1_5_S5/content/uk/pdfs/en/90030_9_bankacctcards_trav_q4_web.pdf;jsessionid=0000qtQpBG7Yk2j9-PbgD2Fc8WC:12c58nvti

Go through the leaflet with another fine tooth comb. If you cannot see the grounds for the charge ask HSBC to explain. Complain formally if you are not satisfied with the explanation.

Good luck.

Hi, my little sis has a HSBC loan and a HSBC bank account. When she opened her new Natwest bank account a couple of years ago she tried to close her HSBC account but they wouldn;t let her because she has a loan. They insisted that she keep the account open and pay a Standing Order into it every month for the loan amount so they could take the loan payment from her by DD.

She did as was asked and everything has been fine for the last 2 years or so. Unfortunately, due to the easter bank holiday in April, her usual standing order reached her account 2 days later than usual. Therefore, they called for the loan DD the day before her standing order payment went in. They paid themselves - putting her overdrawn and then charged her £30.00. They failed to tell her about this and now they want to charge her a further £30.00 for this month as she didn't realise there was a problem. My sis is only 22 and finds it hard to deal with things like this so i'm going into the branch with her on Thursday to try and get the charges waived.

I don't think its ethical for them to charge her after taking a payment for themselves, and I'm going to insist they set up a DD from her natwest account for future payments and close the HSBC account - the recent dely was only due to their insistance that she have this stupid system of moving money from one account to another.

Does anyone know if they are in their rights to refuse to close the account? Any advice before I go in with all guns blazing would be appreciated.