Has your overdraft been cancelled?

jambosans · 3 June 2009 at 12:46AM

kimig wrote: »

I had an overdraft of £4000 which was maxed out. It was with Natwest when they without any warning whatsoever cancelled it. My salary went in and I was left with nothing. I went in to see my branch manager and I was put through to the debt management department.

I was forced to take out a loan of £4000 at a staggering 22% interest rate as I had no money to pay my household bills and other expenses and they refused to re-instate my overdraft.

This happend to me back in March and thanfkully now after coming clean to my partner I am in a position where i can pay off that loan (my partner has taken out a new loan at a much lower rate)

I was just wondering if I have any kind of claim here - Basically i want to go into the bank and tell them I will pay £2500 to pay off the entire loan as i feel that I have been treated unfairly? Any ideas if this will work?

An overdraft is a form of short term borrowing that is repayable on demand. There is not much recourse if NatWest have decided to call in the debt. You're lucky they offered you a loan (even at a high interest rate). Have you compared the rate of interest you were paying on your overdraft in comparison to the 22%? It may not be as much but anyone who uses their overdraft constantly is probably paying a lot of debit interest anyways.

As you've said the overdraft was maxed out, so ultimately NatWest weren't going to see that debt back any time soon unless they removed the overdraft. You may think it is tough love but ultimately forcing you into repayment of that debt is probably in your best interest.

Sp3no · 3 June 2009 at 1:21PM

Current account provider: HSBC
Overdraft limit before change: £1240
Overdraft balance at time: -£1200
New overdraft limit after change: 0
Whether this happened at an official overdraft review: Not sure
I moved my banking as they said i had to pay it back in Full and had a week to do this!!
I went into the bank to dicuss a payment plan to pay it back monthly but they said i could not afford to pay it back so were removing it imediately, backwards logic surely!!!
They never took it any further and i still have my overdraft and im back banking with them????????

husemin · 4 June 2009 at 5:50AM

Hi....With Abbey national
I have OD limit of £3100 and I asked for more
Now reduced to £2450 (damn). Got a month to sort it.
H

shoppo · 4 June 2009 at 10:10AM

This thread scares me.. If I had my O/D taken away I couldn't eat!

jooles67 · 11 June 2009 at 7:58PM

I had an overdraft with Barclays Bank - the o/d limit was £800.
I went over it by £126.00
So the following month when i got paid i cleared the £126 that I had gone over by.
The folowing month, Barclays then took away my £800 o/d instructing me to pay back the full £800 in full!!!!! Even though I'd cleared the amount I had gone over by!
Now am recieving constant letters and phonecalls!!!
:mad:

AndyboyH · 12 June 2009 at 7:13AM

Current account provider: Nationwide
Overdraft limit before change: £3000
Overdraft balance at time: -£1900
New overdraft limit after change: £0
Whether this happened at an official overdraft review: No idea...
Any charges: Not yet, but worried for the end of the month

Any Notice: None given.

I've started reading this thread, and a similar one on the consumer forums because I've had the rug pulled out from under me with my O/D being withdrawn.
Up until my pay review, I was between £2000 (payday) and £2950 (day before payday) drawn each month.
Two months ago, I got a pay review, resulting in backdated pay of around £1000, and effectively being £100 a month better off after tax etc.
So the nationwide overdraft came down, and I was fully intending making good on this positive start to pull it back into the black.
Yesterday, I went to tescos to get a card and flowers for my fiancee who's just got her first permanent job teaching in 12 months. My debit card was declined. I got back home and rang Nationwide to be told I have no overdraft. News to me! They told me I've got to ring the collections team today (busy day at work before a major milestone on Monday - but somehow I'll have to squeeze it in)

I looked up the T&Cs and they can remove the overdraft at any time. I just find it galling that they can do it without any notice or discussion. I'm going to struggle to handle things paying rent at the start of next month. Today I'm going to ring them and see what my options are. I'm also worried that in another forum, they said that if they offer a reducing overdraft they also put a mark on your credit history in offering it. Not good as with my fiancee's new job, we had some hopes of becoming first time home buyers and getting out of throwing our money away renting properties. Not any more, I guess...

I did more googling and found this:
dailymail.co.uk/money/article-1168336/Banks-slash-overdrafts-crackdown-credit.html
(apologies, it's the mail)
It's interesting reading the quote from the ombudsman spokesman at the bottom:

A spokesman at the Financial Ombudsman Service says: 'While banks have the right to call in a credit facility, they must act fairly when doing so. We would question if it is reasonable to withdraw it with just 30 days' notice if a customer is using, but not abusing, the facility.'

Perhaps the ombudsman would be even more interested in Banks + Building Societies that withdraw overdrafts without any notice...?

Very_very_worried_2 · 18 June 2009 at 1:21PM

Current account provider : RBS
Overdraft limit before change :£2000
Overdraft balance at time : -£400 (if they did it after I was paid)
New overdraft limit after change :£0.00
Whether this happened at an official overdraft review : Nope
Any charges : Yep £30 per overdrawn day to a max of £90
Whether you were notified : Nope...not till I got the letter charging me.

I had an RBS student royalties account which started four years ago, the overdraft over the years has been extended to two grand, and when I got a personal loan did so through my upgraded graduate royalties account...my overdraft which I pretty much max out until I get paid each month, has apprently been removed from my account as it has "expired" so they lady I called at the bank says...she says they'll flag it up to the attention of the main office as I should have recieved a nice letter telling me they were removing my overdraft (apprently with no reason) and that I had a nice few charges on it. Needless to say I'm very very worried and do not want to have to use what little savings I do have paying off my overdraft which they were more than happy to give to me

Any one with any advice is much appreciated cuz I'm currently trying to figure out what I have in my house I can sell.

dc110 · 18 June 2009 at 2:13PM

Current account provider : Abbey
Overdraft limit before change : 850
Overdraft balance at time : ~700
New overdraft limit after change : 550
Whether this happened at an official overdraft review : 1 year since last increased it
Any charges : No
Whether you were notified : Due to happen start of August - was notified about a week ago so ~6 weeks notice.

I have gone over the limit once in the last 6 years but kinda figured it would be reduced as Ive been paying in slightly less last few months that I used to so Im prepared for it.

fozmcfc · 20 June 2009 at 12:15AM

I have an overdraft with Natwest for £5000, but the last time I was into my overdraft by a small amount something like £7 was about 4 years ago. The most I was ever into it was £2500 but that was nearer 6 or 7 years ago.

I've often wondered why they gave me such a large overdraft, (well it gradually went up after several reviews) in the first place and why they haven't taken it away as I haven't used it for years.

I was wondering if to ask them to remove it, or reduce it, but thought what harm is it doing.

jambosans · 20 June 2009 at 1:56AM

fozmcfc wrote: »

I have an overdraft with Natwest for £5000, but the last time I was into my overdraft by a small amount something like £7 was about 4 years ago. The most I was even into it was £2500 but that was nearer 6 or 7 years ago.

I've often wondered why they gave me such a large overdraft, (well it gradually went up after several reviews) in the first place and why they haven't taken it away as I haven't used it for years.

I was wondering if to ask them to remove it, or reduce it, but thought what harm is it doing.

I think it will mainly be to do with account conduct. Seeing your account is always well funded means you are less of a lending risk than someone who constantly uses an overdraft. It is all to do with ability to repay, etc, etc.

Due to an overdraft being what banks generally regard as short term borrowing (even though in many cases they're not used that way) means those who are constantly in an overdraft are more likely to have it taken away than those who do not. Also, people who misuse the facility e.g. go over the limit, incur charges, etc pose a higher risk to the bank in continuing to lend to them. The banks may make money from debit interest and charges but in tough times lower risk borrowing and deposits are more important. This thread is testament to that fact.

If it does not cost you anything to have, then, as you've said, there is no harm in having it.

Has your overdraft been cancelled?

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