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HSBC Glitch Causes Wrong Names On Thousands Of SMB Loans

July 08, 2020 at 01:44AM

Due to a technical glitch, thousands of U.K. government small- to medium-sized business (SMB) loans to HSBC customers were sent under incorrect names, BBC News reported.

In one instance, a customer named Cesar Basanta said he had been waiting weeks on a 50,000 pound ($62,800) bounce back loan, which had been made in his name rather than his company’s as was needed, BBC News reported.

In response, HSBC has said it’s working on the problem and that customers won’t be held liable. The bank has been writing to customers who accepted the loans in their own names in order to make changes.

In April, when government financial aid to help with the pandemic was announced, banks were instructed to skip asking for personal guarantees for loans below 250,000 pounds ($314,000). But the mix-up has not been well-received by those like Basanta, who told BBC News that waiting so long had not been a help for him.

He said when he opened the letter regarding the loan and saw it addressed to him, he hadn’t wanted to use it due to fearing he’d be personally liable. He told BBC News that the loan was definitely for his business and not him as a person. But the letter from HSBC maintains that borrowers are responsible for repaying the whole loan, according to the document seen by BBC News.

The U.K.’s Bounce Back Loans Scheme (BBLS) began in May, allowing for loans up to 50,000 pounds, available in a simpler and easier manner than the comparable Coronavirus Business Interruption Loan Scheme (CBILS), BBC News wrote. Bounce back loan terms dictate that the government cover the costs for the first year with 100 percent guarantees. After a year, businesses will begin paying back the loans with a 2.5 percent flat rate, lasting up to six years.

In response to problems like Basanta’s, HSBC has pledged to fix the issues and insisted that the errors had only impacted “a small number” of their proceedings, BBC News reported.

HSBC, along with other institutions like Santander, Deutsche Bank and Barclays, will face an investigation over allegations that they took advantage of clients to persuade them to purchase other products while counseling for pandemic services.

HSBC Glitch Causes Wrong Names On Thousands Of SMB Loans …

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