Alliance & Leicester - Under funding fee

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.
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Comments

  • YorkshireBoy
    YorkshireBoy Posts: 31,541
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    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
    MarkyMarkD Posts: 9,912
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    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
    wendyrobson Posts: 116 Forumite
    Thanks for response - Lesson learned - I will take your advice. pay fees and move on
  • MarkyMarkD
    MarkyMarkD Posts: 9,912
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    Well done, wendy - a very mature and responsible attitude unlike a lot of the people on MSE whose attitude is moan, moan, moan. :)
  • Milarky
    Milarky Posts: 6,352
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    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.... COVID is a [discontinued] scam
  • MarkyMarkD
    MarkyMarkD Posts: 9,912
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    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
    stiffnuts69 Posts: 442 Forumite
    MarkyMarkD wrote: »
    Well done, wendy - a very mature and responsible attitude unlike a lot of the people on MSE whose attitude is moan, moan, moan. :)

    Have to agree with you here. Or if you tell them how it is they take it as a personal attack.
  • roddydogs
    roddydogs Posts: 7,478
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    Thanks for response - Lesson learned - I will take your advice. pay fees and move on
    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!
  • roddydogs
    roddydogs Posts: 7,478
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    MarkyMarkD wrote: »
    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.


    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!:T:rotfl:
  • mleonard79
    mleonard79 Posts: 1,616
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    roddydogs wrote: »
    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!:T:rotfl:

    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
    :hello: :hello: :hello:
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