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  • FIRST POST
    • Jphilg
    • By Jphilg 11th Jul 17, 11:29 PM
    • 1Posts
    • 1Thanks
    Jphilg
    LBG change overdraft charging structure
    • #1
    • 11th Jul 17, 11:29 PM
    LBG change overdraft charging structure 11th Jul 17 at 11:29 PM
    Hi All

    First post after lurking for quite sometime.

    Lloyds, BOS and Halifax will shorty announce that they are simplyfying their overdraft fees across all brands.

    The new structure will see a charge of £0.01 for every £7 of an overdraft being used which will debit the account DAILY.


    All over fees such as unarranged overdraft fees will be removed.

    The accounts themselves will remain the same - i.e Halifax Reward will still pay £3 to qualifying customers.

    The group say 9/10 customers will see their charges reduce.

    Obviously this will impact big overdraft users who, for example, would have been capped at £3 a day if they are with Halifax.
    Last edited by Jphilg; 12-07-2017 at 12:10 AM. Reason: Wrong information
Page 2
    • Westie983
    • By Westie983 12th Jul 17, 7:39 PM
    • 3,842 Posts
    • 14,001 Thanks
    Westie983
    Lloyds advised me provided it is cleared funds and it is transferred on the internet I then have up until midnight. I have done this a few times and never received any charges. I like you thought at one time it was close of business.
    Originally posted by MABLE
    It will be changing to 2:30 from 3:30, after that payments will bounce.

    Fee structure will be calculated as of the balance at 2:30 each day.

    Wait for the letter to arrive 2nd August for more information.

    Westie983
    Save 12k in 2017 #16 Total £22,555/£12,000 = 187.95%
    Sealed Pot Challenge ~ 11 #97 Total (£410) + £0.00/£800 = 51.25% ( x 11)
    Xmas 2017 £1 a Day #6 Total £400/£365 = 109.58%
    Virtual Sealed Pot #1 Total £1,600/£1,800 = 88.88%
    £2 Savers Club 2017 #3 Total (£1,450)+£50/£2,000 = 75.00%

    Total £26,465/£16,965 = 155.99%

    I'm a Board Guide on Budgeting & Bank Accounts, Debt-Free Wannabe, Disability Money Matters, and Savings & Investments. I'm a volunteer helping the boards run smoothly, but I'm not a moderator, and do not read all posts. If you see an inappropriate/illegal post then email forumteam@moneysavingexpert.com
    • Vortigern
    • By Vortigern 12th Jul 17, 7:58 PM
    • 2,310 Posts
    • 1,515 Thanks
    Vortigern
    ... you can only spend whats in your account plus £7 you will no longer *from Nov be able to go overdrawn for more then £7.
    Originally posted by Westie983
    What if my account is empty and I make a contactless payment of up to £30. Assuming this is an offline transaction, I could go more than £7 overdrawn.

    I could make several further contactless, offline payments.

    This not something I would try as there would be little benefit in such a small free overdraft.

    On the whole, I think the proposed changes should help those who can't control their spending to keep within their budgets.
    • Westie983
    • By Westie983 12th Jul 17, 9:59 PM
    • 3,842 Posts
    • 14,001 Thanks
    Westie983
    What if my account is empty and I make a contactless payment of up to £30. Assuming this is an offline transaction, I could go more than £7 overdrawn.

    I could make several further contactless, offline payments.

    This not something I would try as there would be little benefit in such a small free overdraft.

    On the whole, I think the proposed changes should help those who can't control their spending to keep within their budgets.
    Originally posted by Vortigern
    At the moment the proposed information given is that the contactless payment will not go through, but it may work with petrol as they only authorise £1, so its still up in the air, but the training launched today says that payments will be declined if you are taken over your agreed overdraft.

    Westie983
    Save 12k in 2017 #16 Total £22,555/£12,000 = 187.95%
    Sealed Pot Challenge ~ 11 #97 Total (£410) + £0.00/£800 = 51.25% ( x 11)
    Xmas 2017 £1 a Day #6 Total £400/£365 = 109.58%
    Virtual Sealed Pot #1 Total £1,600/£1,800 = 88.88%
    £2 Savers Club 2017 #3 Total (£1,450)+£50/£2,000 = 75.00%

    Total £26,465/£16,965 = 155.99%

    I'm a Board Guide on Budgeting & Bank Accounts, Debt-Free Wannabe, Disability Money Matters, and Savings & Investments. I'm a volunteer helping the boards run smoothly, but I'm not a moderator, and do not read all posts. If you see an inappropriate/illegal post then email forumteam@moneysavingexpert.com
    • One-Eye
    • By One-Eye 13th Jul 17, 12:08 AM
    • 39,208 Posts
    • 6,178,044 Thanks
    One-Eye
    a) In October I have an arranged overdraft limit of £500 but an overdraft of £1000. What happens in November?

    b) In October I have an arranged overdraft limit of £1000 and an overdraft of £1000. Please can I have my arranged overdraft limit reduced to £7 in November?
    • GingerFurball
    • By GingerFurball 14th Jul 17, 9:03 AM
    • 945 Posts
    • 892 Thanks
    GingerFurball
    It will be changing to 2:30 from 3:30, after that payments will bounce.

    Fee structure will be calculated as of the balance at 2:30 each day.

    Wait for the letter to arrive 2nd August for more information.

    Westie983
    Originally posted by Westie983
    No it won't. You'll still have until the end of the day to clear any overdrawn balance.

    The 3:30 (changing to 2:30) cut off is to ensure Direct Debits and cheques that debit the account are honoured.
    DEBT FREE!

    Debt free by Xmas 2014: £3555.67/£4805.67 (73.99%)
    Debt free by Xmas 2015: £1250/£1250 (100.00%)
    • Dobbibill
    • By Dobbibill 14th Jul 17, 1:09 PM
    • 2,460 Posts
    • 3,558 Thanks
    Dobbibill
    a) In October I have an arranged overdraft limit of £500 but an overdraft of £1000. What happens in November?
    Originally posted by One-Eye
    My understanding is you will be charged on the existing structure for October and new structure for November so during November there will be an overlap period where you are being charged for both.

    b) In October I have an arranged overdraft limit of £1000 and an overdraft of £1000. Please can I have my arranged overdraft limit reduced to £7 in November?
    You can only reduce your overdraft limit if you are in credit to the amount you want to reduce it by.
    Anything over £7 will decline unless it is below the merchants floor limit, where they don't contact the bank for authorisation or contactless but you will not be charged for more than the arranged overdraft of £7.

    Chip & PIN can kick in randomly for contactless for security checks, this will cause it to be declined - it will then only work once you have sufficient funds.
    I'm a Board Guide on the Energy, Student Money Saving, UK Armed Forces and
    Local Money Saving - Wales boards. I'm a volunteer to help the boards run smoothly, and I can move and merge posts there.
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.


    A person who never made a mistake, never tried anything new.
    • Chrysalis
    • By Chrysalis 14th Jul 17, 10:38 PM
    • 2,005 Posts
    • 918 Thanks
    Chrysalis
    Personally I like the changes

    Basically as is now there is a fixed fee and interest on authorised overdrafts, in my case I have a £200 overdraft limit (which I dont use), but if I used it the fixed fee would make it a very expensive way of borrowing money, before the MSE court case the authorised overdraft was a very cheap way of borrowing money. So in other words the MSE court case made things worse for lloyds authorised overdrafts.

    So now is a fixed fee and interest charged daily.

    The new system will remove the fee, but increase the interest rate, those like me with a low limit will find it cheaper to use, but those with larger limits will find it more expensive, which is how I think it should be. So an improvement, but a warning to those who will lose out from this change.
    • dave88861
    • By dave88861 9th Aug 17, 7:21 PM
    • 1 Posts
    • 1 Thanks
    dave88861
    To borrow over £226 a month via overdraft s more expensive.

    The new rate works out at 52% not 19.85% + a £6 fee

    £1000 over a month is £42 instead of £22

    On a sliding scale the cut-off for being better off is owing less than £226

    This is I thought illegal borrowing as the interest rate, as a % is not shown.
    The old scheme was easier to calculate, in your head, say £500 for the month,
    was roughly 20%/12 plus £6 = 500 x .2 = 100 / 12 = 8 + 6 = £14
    now it's 500 / 7 = 70 x 1p = 70p x 30 = £21
    a 50% increase.

    This new scheme is deceptive and should show the interest rate of 52%
    Is it illegal not to show interest rates for loans?

    the true cost of the credit, called the Annual Percentage Rate (APR)
    • jimarnold
    • By jimarnold 10th Aug 17, 2:10 AM
    • 4 Posts
    • 0 Thanks
    jimarnold
    I have a prearranged overdraft limit of £950 which I've only used twice in 40 years - probably why they gave it to me
    From my letter it looks like the new rate will be more (if I ever use it)

    I say looks like because Lloyd's helpfully give me an example which includes an APR for the old system but not one for the new one

    I also thought APR was supposed to be shown to make comparison easier?
    Last edited by jimarnold; 10-08-2017 at 2:12 AM. Reason: spelling !
    • tifo
    • By tifo 10th Aug 17, 7:13 PM
    • 1,185 Posts
    • 262 Thanks
    tifo
    Lloyds are a bit confusing with the info.

    Currently, there is not really an unarranged overdraft for most customers as they, like many other banks, will return the direct debit or standing order unpaid and charge you £10 for it. So in this case you cannot get charged 1p for every £7 overdrawn because you're not overdrawn.

    Its possible to go overdrawn with contactless payments or those that are not preauthorised but there's very few of these, banks will not authorise unattended petrol station pumps if there's not 'enough' money in the account, but they take the payment out about 3 days after it is made when you had the funds. What is 'enough' i don't know because i've had my bank not authorise the petrol pump even when my account balance was more than what I was going to fill up with. I've then immediately transferred within the mobile app and they did authorise.

    It will be that only those with a planned overdraft will pay 1p for every £7 overdrawn. For many with an agreed overdraft (they say £700) this will cost the same as what it does at the moment with the £6 fee and interest. So no change there except you'll have to pay pennies every day.

    In terms of the time to pay into the account for a payment that will be returned, at the moment its 3.30pm for the first check and midnight for the second check and after this they will return it unpaid. They even tell you this in the letter they send for the £10 charge. I had a 'polite' discussion with my local manager about this because I paid cash into the account at 3.40pm after standing in the queue and he said it will be returned unpaid (it was busy and he helped out at the cashier), i said "no you're wrong" but he didn't agree. It was paid anyway but next time I went into the branch I took a copy of the letter they'd sent me previously and he said "hmmm i didn't know that" ....

    Its changing to 2.30pm for the first check from October but don't know about the second check.
    Last edited by tifo; 10-08-2017 at 8:01 PM.
    • miller
    • By miller 11th Aug 17, 5:05 PM
    • 1,203 Posts
    • 402 Thanks
    miller
    I currently have an arranged overdraft which I don't use. I think I'll be better off cancelling it as it would be preferrable not to be charged anything and just letting payments bounce when the balance hits 0.

    As a Halifax customer, currently Travelex foreign cash purchases (e.g. for airport collection) do not incur a charge. This appears to be changing.
    • jonesMUFCforever
    • By jonesMUFCforever 12th Aug 17, 11:04 PM
    • 24,174 Posts
    • 11,447 Thanks
    jonesMUFCforever
    I currently have an arranged overdraft which I don't use. I think I'll be better off cancelling it as it would be preferrable not to be charged anything and just letting payments bounce when the balance hits 0.

    As a Halifax customer, currently Travelex foreign cash purchases (e.g. for airport collection) do not incur a charge. This appears to be changing.
    Originally posted by miller
    To be frank that would be a stupid decision.
    Bounced transactions may not cost you £charges but would damage your credit profile immensely (and I have yet to hear from any utility/telecommunication company that will not charge if your direct debit to them is bounced).
    What goes around - comes around
    give lots and you will always receive lots
    • miller
    • By miller 13th Aug 17, 2:04 PM
    • 1,203 Posts
    • 402 Thanks
    miller
    Your first sentence detracts from an otherwise good point. Not sure I have ever been called stupid on these forums before, so congraluations for being the first.

    I don't use the overdraft, so in the unlikely event it happens (e.g could be an attempted cash withdrawal) I will avoid paying charges to Halifax.
    • jonesMUFCforever
    • By jonesMUFCforever 13th Aug 17, 5:03 PM
    • 24,174 Posts
    • 11,447 Thanks
    jonesMUFCforever
    Your first sentence detracts from an otherwise good point. Not sure I have ever been called stupid on these forums before, so congraluations for being the first.

    I don't use the overdraft, so in the unlikely event it happens (e.g could be an attempted cash withdrawal) I will avoid paying charges to Halifax.
    Originally posted by miller
    You don't use the overdraft so the new fees won't affect you - will they?
    What goes around - comes around
    give lots and you will always receive lots
    • PeacefulWaters
    • By PeacefulWaters 13th Aug 17, 7:02 PM
    • 7,167 Posts
    • 8,826 Thanks
    PeacefulWaters
    Your first sentence detracts from an otherwise good point. Not sure I have ever been called stupid on these forums before, so congraluations for being the first.

    I don't use the overdraft, so in the unlikely event it happens (e.g could be an attempted cash withdrawal) I will avoid paying charges to Halifax.
    Originally posted by miller
    You weren't called stupid.

    Your proposed course of action was.
    • farty
    • By farty 22nd Aug 17, 12:03 PM
    • 2 Posts
    • 0 Thanks
    farty
    Surely this is the elephant in the room - they are changing their overdraft APR to 52% without mentioning that fact anywhere. How is this legal?

    I phoned the call centre and the chap told me they had been specifically told not to mention an APR and to say they couldn't answer any questions about APR.

    Thanks Lloyds, just when we thought you couldn't sink any lower.
    • farty
    • By farty 22nd Aug 17, 12:18 PM
    • 2 Posts
    • 0 Thanks
    farty
    P.S. MSE, allow me to fix your article title: instead of "Overdraft fee drop for millions..." it should have read "Lloyds Banking Group increasing overdraft APR from 19% to 52%".

    After all, isn't that the real story here? Whose side are you on?!

    You're welcome :-)
    • eskbanker
    • By eskbanker 22nd Aug 17, 12:25 PM
    • 5,793 Posts
    • 5,681 Thanks
    eskbanker
    See this post on one of the other threads for a valid reason why an APR doesn't apply: http://forums.moneysavingexpert.com/showthread.php?p=72977796#post72977796

    Copy/pasted here for simplicity (acknowledgements to Tom99):
    I think that Halifax will get away with not publishing an APR because of the way the charge is calculated i.e. it is 1p on every whole £7.

    So the APR on £6.99 is 0%, on £13.99 it is 53%, on £100 it is 65.95% and on £1,000 it is 68.14%
    Note that many other banks' overdraft charges also aren't calculated on an APR basis, such as all those who charge £x per day regardless of balance....
    • szam_
    • By szam_ 22nd Aug 17, 12:27 PM
    • 615 Posts
    • 568 Thanks
    szam_
    As someone who had a large overdraft and uses it often due to reasons, it'll come about 3 months too early for my liking. I was planning on paying off my overdraft in full in Feb anyway, so it'll be a few months of feeling a bit ripped off. I might try and get some paid off in the interim to reduce the damage.

    The worst part about this in my opinion is charging on the day, every day - it just sucks money from your account every day, as someone who pays all my bills at the start of the month, I absolutely despise this change, I wouldn't care if it was charged monthly as it currently is. Making things simpler they said? My !!!!.

    Once that's paid off, and after 10 years with them, I'll be off to a different bank anyway, Halifax's online banking lately has been behaving really odd, taking days to show payments coming out, not even showing up in pending payments - this change just fuels my motivation to move bank.

    Does anyone know how this affects Ultimate Reward Accounts by the way? Does it start after the 300 or will it add on the 300 the moment it hits 307? I.e. £300 fee free means I won't be charged but does £7 over that initial £300 mean I will be charged 1p or 43p? This question wasn't answered in the documentation I received.
    XBL: xSzam

    • eskbanker
    • By eskbanker 22nd Aug 17, 12:30 PM
    • 5,793 Posts
    • 5,681 Thanks
    eskbanker
    P.S. MSE, allow me to fix your article title: instead of "Overdraft fee drop for millions..." it should have read "Lloyds Banking Group increasing overdraft APR from 19% to 52%".

    After all, isn't that the real story here? Whose side are you on?!

    You're welcome :-)
    Originally posted by farty
    According to the MSE article on this,
    Lloyds Banking Group, which includes Halifax and Bank of Scotland, says about 18 million customers will be better off or unaffected by the changes
    but
    around two million customers may be worse off as the new charges could cost more than the current interest or charges they're paying
    Obviously the 10% who lose will be the most unhappy and therefore the most vocal but they're still very much in the minority when compared against those who'll benefit (or not lose)....
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