Halifax may pass credit card arrears on to debt collectors
HALIFAX credit card customers were warned yesterday that they could end up being chased by debt collectors if they are in arrears when the bank closes in June.
The Scottish bank is due to shut its retail operations from June 18 and wants its 50,000 credit card customers to close their credit card accounts by then, either by clearing their card balances or switching to another card provider.
Yesterday the bank said that it would offer people who have not managed to clear their balances or switch to another provider by June the option of converting their card balance into a personal loan.
But debt adviser Emmet Pullan of Debt Plan Ireland said he has been told by the bank that customers who are in arrears on their cards will not be offered the option of converting their card balance into a loan.
Instead, their debt will be sold on to a debt collection agency, Mr Pullan said.
He warned that debt collection agencies "are quite vigorous" in their approach to collecting debts and will either call to people's doors or take legal action.
"We would feel that customers should be aware of this situation as this proposed action may further impact their credit rating.
"Some debt collection agencies will have vigorous recovery techniques so customers should prepare to engage them with a repayment plan should the account transfer," Mr Pullan said.
A spokesman for Halifax/Bank of Scotland said no decision had been made yet on what will happen to those card customers who are in arrears when branches start to close in June.
However, he confirmed that currently anyone who fails to make payments on their card for six months in a row is regarded as being in arrrears and likely to have their debts sold on to a debt collection agency if they fail to engage with the bank.
The Halifax spokesman stressed that customers should try to clear their credit balances by June 18 by switching or paying off the balance.