You couldn’t successfully argue that Nicholas Wilson wasn’t persistent. That’s because he spent 16 years on a crusade to establish that HFC Bank and John Lewis Financial Services had overcharged thousands of people on debt payments. Both lenders are now part of HSBC.

When a person is in arrears with their credit card payments, the creditor will attempt recovery of the outstanding amounts. This may involve them referring the matter to a debt collection agency or lawyer who will take action on their behalf to recover the arrears. This could involve phoning, texting, sending letters before legal action, or possibly legal action. The terms of the contract between creditor and lender will likely provide that the foregoing recovery costs, borne by the lender, should be the debtor’s responsibility. However, what is a reasonable charge? Both lenders referred to those which fell into arrears as much as 16.4% of the balance to the account as a “debt collection charge”.

As far back as 2010, the Office of Fair Trading (The Financial Conduct Authority's predecessor) said that that this did not reflect the actual cost of recovering the debt, hence the charge was unfair.

Whilst HSBC has already paid out £4m to 6,700 people by way of compensation for the overcharging, this is not the end of the story. The FCA has now said that it is extending the compensation scheme and has written to another 18,500 people who have not previously been contacted as they may also be entitled to some compensation. Indeed, if all of the 18,500 benefit, the final payout could total £11m, although Mr. Wilson believes that the figure could well be greater than that.

Mr. Wilson has spent the last 16 years seeking justice and he has to be congratulated for his persistence. Apparently, he told HFC as far back as 2003 that what they were doing was illegally overcharging its customers. When the Financial Services Authority said that the matter was outwith its remit, he referred the matter to its successor, the FCA. However, the FCA decided to take no action. Following on from this, Mr. Wilson made a complaint to Office of the Complaints Commissioner. In a 2015 ruling, they said that the FCA had presided over a series of events “bordering on the farcical”, was “negligent” and “defensive” and had even tried to shift the blame on to Mr. Wilson.

The FCA then reconsidered its position and, in 2017, HSBC commenced a voluntary redress examination. The result of this is that HSBC has contacted the 18,500 customers to advise them that they may be entitled to compensation for the overcharge and, indeed, they will be compensated where records indicate a customer is so entitled.

Whilst this is obviously a very positive result for the customers, Mr. Wilson believes they are still being short changed. This is because, in his opinion, the total figure for the unreasonable charges should be nearer £200m. Despite this, Mr. Wilson should be congratulated in his efforts in exposing the unfair charges as well as addressing the issue with the FCA, which has now produced such a favourable outcome.