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  • FIRST POST
    wendyrobson
    Alliance & Leicester - Under funding fee
    • #1
    • 20th Jul 07, 8:07 PM
    Alliance & Leicester - Under funding fee 20th Jul 07 at 8:07 PM
    Approx 20 months ago I opened A & L premier direct current account in order to take advantage of the 10% 12 month saving account on offer. I was required to pay in minimum of 500 per month which I did and received the 10% interest on the savings account.
    At the end of the 12 months I stopped the 500 per month into the current account but as this accont was payingn a healthy 6.5% on the first 2500 in the premier direct account I decided to leave that sum in there to earn interest. I was not aware of any condition to failing to make regular payments into this account and as I service it by internet I have not checked it for a few weeks.
    I checked tonight to find a 'red noitce' which states I am being charged 5.00 per month for April/May and June called an Under funding Fee (none of these payments have been taken yet - due on 3 August)
    I am amazed and will obviously close the account before 3 August. I have checked my husbands and mothers account same as above. A & L have already taken fees from husbands account even though our accounts started same date and they intend to charge mums account even though she has a large sum in an A & L savings account.
    I am not aware they have ever written to me to notify these charges - Sorry this is longwinded but I would be interested if anyone else has come across this and it may be of interest to others.
Page 1
  • YorkshireBoy
    • #2
    • 20th Jul 07, 11:09 PM
    • #2
    • 20th Jul 07, 11:09 PM
    I opened my Premier Direct account around the same time as yourself, and the 5 under funding fee was clearly stated on the website (main features page, fees & charges section, and in the T&C's themselves) at the time. I'm afraid you simply missed it...you were seduced by all the benefits and didn't read the small print.

    Closing the account before the charges are applied would be a very foolish thing to do. They'll simply re-open the account to apply the charges and then hit you with further charges for overdraft abuse and add on debit interest as well. Furthermore, your overdraft abuse will then be reported to the credit reference agencies, thus damaging your credit history if allowed to continue.

    I also wouldn't mention that you haven't paid in for the last 8 months (rather than just the 3 they know about), as they're liable to add on some more 5 charges. I think the best thing to do here is to put it down to experience, let them take the 15, and then close the account after 3rd August if that's what you want to do.

    Finally, you probably won't be able to close the account down before 3rd August anyway. That's because, following your request, they allow another 10 working days for any payments you've made/authorised to filter through (and there are only 9 working days before 3rd August) before formally closing it.
  • MarkyMarkD
    • #3
    • 20th Jul 07, 11:38 PM
    • #3
    • 20th Jul 07, 11:38 PM
    As YB says, the under-funding fee was a clear feature on this account.

    You haven't got a leg to stand on as you admit only opening the account to exploit the regular saver offer.

    If you were a genuine customer who had inadvertently under-funded, you wouldn't have been charged: that's why you weren't charged until you had under-funded for quite a few consecutive months.

    Having money in another A&L account is irrelevant (re your mother's circumstances).

    As usual, you need to read Ts & Cs properly, not just be seduced by a stonking offer which you want to exploit.
  • wendyrobson
    • #4
    • 21st Jul 07, 8:16 AM
    • #4
    • 21st Jul 07, 8:16 AM
    Thanks for response - Lesson learned - I will take your advice. pay fees and move on
  • MarkyMarkD
    • #5
    • 21st Jul 07, 11:28 AM
    • #5
    • 21st Jul 07, 11:28 AM
    Well done, wendy - a very mature and responsible attitude unlike a lot of the people on MSE whose attitude is moan, moan, moan.
  • Milarky
    • #6
    • 21st Jul 07, 11:41 AM
    • #6
    • 21st Jul 07, 11:41 AM
    Interesting to note that A&L may not automatically charge you an underfunding fee on the first occasion though... I had also assumed they would apply it strictly.
    .....under construction....
  • MarkyMarkD
    • #7
    • 21st Jul 07, 11:57 AM
    • #7
    • 21st Jul 07, 11:57 AM
    I've seen on a number of threads that A&L are fairly generous in their application of this fee. Nobody seems to get charged for a good few months after they stop funding.
  • stiffnuts69
    • #8
    • 21st Jul 07, 3:44 PM
    • #8
    • 21st Jul 07, 3:44 PM
    Well done, wendy - a very mature and responsible attitude unlike a lot of the people on MSE whose attitude is moan, moan, moan.
    Originally posted by MarkyMarkD
    Have to agree with you here. Or if you tell them how it is they take it as a personal attack.
  • roddydogs
    • #9
    • 23rd Jul 07, 7:50 AM
    • #9
    • 23rd Jul 07, 7:50 AM
    [quote=wendyrobson;5803561]Thanks for response - Lesson learned - I will take your advice. pay fees and move on[/quote ] you only needed to put in £500 per month, you could have then just transferred the £500 out straight away, leaving £2500 for maximum interest!-yes you can do this-i do!
    Last edited by roddydogs; 23-07-2007 at 8:51 AM.
  • roddydogs
    As YB says, the under-funding fee was a clear feature on this account.

    You haven't got a leg to stand on as you admit only opening the account to exploit the regular saver offer.

    If you were a genuine customer who had inadvertently under-funded, you wouldn't have been charged: that's why you weren't charged until you had under-funded for quite a few consecutive months.

    Having money in another A&L account is irrelevant (re your mother's circumstances).

    As usual, you need to read Ts & Cs properly, not just be seduced by a stonking offer which you want to exploit.
    Originally posted by MarkyMarkD

    Whats wrong with "Exploiting" bank accounts, etc, isnt it what this site is about? as posted elswhere you only need to put in 500 in any one month, you can then transfer the 500 straight out!
  • mleonard79
    Whats wrong with "Exploiting" bank accounts, etc, isnt it what this site is about? as posted elswhere you only need to put in 500 in any one month, you can then transfer the 500 straight out!
    Originally posted by roddydogs
    I don't think Mark is saying that there is anything wrong with it - just that if you are going to do it you must read all the smallprint and be fully prepared for anything the bank may be able to throw at you. You're correct - if you do it properly it's great but you have to be careful.

    As far as the underfunding fee goes - they are definitely more lenient with it in most cases than you would expect. My mum was inadvertently underfunding her account for nearly 10 months and they never charged her. They also don't charge you straightaway anyway as they will send you a warning letter first telling you that you are underfunding your account and asking you to begin funding it properly. It seems this hasn't happened in the OP's case and I wouldn't query it if I was her since she's been underfunding the account for so long and they could apply further charges but in most cases I have seen of it being applied this has happened.

    Regards

    Michelle
  • MarkyMarkD
    Thanks, mleonard. Your interpretation of what I meant is quite correct.

    If you are exploiting a money saving type loophole, such as the ones commonly mentioned on this site, you have to dot the i's and cross the t's or you are in danger of losing, rather than saving, money.

    If you fail to do so, you can't expect much sympathy from the bank/other institution that you were exploiting. Banks will often waive charges for "genuine" customers who make an innocent mistake (the first time, at least) but they are far less likely to do so for someone who is taking them for a financial ride.
  • Shake
    Alliance & Leicester are NOT following their contract they sent me end of 2006 with this 5 monthly charge therefore I am writing to complain to them and ask for a refund.

    In the contract that they sent me (and also in the version I downloaded when opening the account) for the Premier Current Account / Premier Direct Current Account, you can see Page 10, paragraph 29.2 If You fail to regularly fund your Account where We have You that Your Account requires regular funds, We may transfer You to another type of current and will give You no less than 30 days advance written notice of this.

    Clearly Alliance & Leicester has not followed this course of action and is in breach of the contract. I would therefore argue that any 5 monthly under-funding fees are invalid. Even if the version of their website today does mention that 5 monthly fees will charged, this is not valid if it was not in their original contract with me, unless they have given me written reasonable notice that they are going to vary the terms of my contract.

    In fact they gave very little notice of this impending charge. I had a letter dated 19th of the month (which arrived several days later) warning that 500 should be paid in before the end of that month. This is not even 2 weeks notice. Definitely not enough if youre on holiday. 30 days would have been reasonable.

    Alliance & Leicester are too quick to charge you an invalid fee in my opinion, so I'm going to argue this one out with them on principle. Banks should really be treating their savers better given the financial climate. Having said that, A&L have been reasonable in the past when I have written to them, so we shall see how they respond.
  • YorkshireBoy
    Clearly Alliance & Leicester has not followed this course of action and is in breach of the contract.
    Originally posted by Shake
    The key word is "may", ie it's at their discretion.
    Even if the version of their website today does mention that 5 monthly fees will charged, this is not valid if it was not in their original contract with me, unless they have given me written reasonable notice that they are going to vary the terms of my contract.
    The 5 underfunding fee was in their T&C's when I joined them in January 2006, was there when I left them in August 2007, was still there when I rejoined them in November 2007, and is still there today.
    ...I'm going to argue this one out with them on principle.
    You won't win this one, but good luck all the same.

    PS: Why drag up two old threads to make your point? :confused:
  • Shake
    Thanks Yorkshireboy for comments.

    Can you tell me whereabouts this 5 under-funding fee clause is in the contract? I have a 26 page Adobe Acrobat pdf document entitled tandc.pdf and date modified showing as 14th Aug 2006. I've searched through it on "5" (also tried "funding") and there is no mention of a monthly under funding fee. Have they varied their contract with other account openings I wonder?

    I don't think the word 'may' was so critical. Either they continue with the account as normal, or switch me to another account, but not suddenly charge me 5 monthly.

    It may not be perfect netiquette but I posted to the two threads to make sure more people were aware of questioning this monthly fee as a lot of the advice here seems to be to simply give up on it.
  • Snooze
    I've mentioned this before but I'll mention it again - I've had the top current account with A&L since the day it was introduced (and had an account with A&L for over 20 years now, back in the Girobank days) and have a sporadic income to say the least. I've had periods of nearly 12 months go by when there's been no account funding and they've never once mentioned anything about charging me, however, there has never been any less than 500 in the account so maybe the deciding factor is more what your average balance is as opposed to how much you put through it each month.

    Rob
  • surreysaver
    I am sure that there was a clause that your are supposed to check the website regularly for any changes to the terms and conditions.
    I consider myself to be a male feminist. Is that allowed?
  • Shake
    Thanks surreysaver for raising that point, yes there is a clause entitled "3. Changes to these Terms and Conditions" and mentions that they can change terms and conditions by "A message on Our website".

    However further on it reads "3.4.1 If the change is to Your disadvantage We shall tell You about it personally (at Your address or Your e-mail address procided to Us) at least 30 days before We make the change and at any time up to 60 days from the date of the notice You may; without notice, switch Your Account or close it without having to pay any extra charges or interest for doing this;"

    I would say that a 5 fee is to my disadvantage, and that they have not given me 30 days notice and therefore the fees are invalid.

    I just get the impression that banks charge fees in the name of quick profits on the assumption that the majority of customers will simply pay them and not question a bank's legal standing.
  • Shake
    Finally I've found the clause about the 5 underfunding fee. It does exisit. It's in a seperate document to the main terms and conditions.

    The rates-and-charges.pdf under Miscellaneous fees states "Premier Direct Current Account/Premier Account under-funding fee 5.00 per month (failure to pay in the minimum monthly credit of 500)." Well, it's up to them to respond to my letter, and if they insist on charging me then I'll close all my family's A&L funds down.
  • Shake
    Received a letter from A&L saying that they would not refund any underfunding fees so I have responded by closing all my family's accounts there and cancelling my credit card. It amazes me that A&L will offer 100 to new account openers, plus a 25 recommend a friend incentive, and yet decide not to waive 15 of underfunding fees to keep 2 existing customers who had over 15k with them. The local High St branch did not want to allow my 80 year old father to close his account in person but made him phone the customer service line from their branch phone. What a crazy customer service business model that is! Cost cutting to the bone. No personal service even if you take the trouble to go in the branch with a passport. Anyway, an 80 year old man trying to do telephone-choose-an-option-whats-your-password type banking wasn't going to work, so eventually after much deliberation a staff member got his finger out to close the account by speaking to A&L customer services himself. At least if you go into Lloyds they don't make you phone some customer service line. This is a policy mess up from the top down by A&L. See if the Spanish takeover fixes anything.
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