B2B Payments

HSBC Glitch Causes Wrong Names On Thousands Of SMB Loans

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.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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