Bank gave me overdraft but won't stop charging interest!

CONB

Hi ,

Can someone offer me advice on this one.

Hi the Bank of Scotland double entered £9750 into my sole trader account at the end of last year. When the Bank phoned me to tell me what had happened I agreed that I would repay them £400 per month to clear the double entry. However, the Bank of Scotland have been charging me interest on the £9750 of nearly £100 per month. I have written to ask them to stop this and for the interest to be paid back but they say under their T's and C's they can charge me interest.

Given what i've read about the test case outcome et al should I now use the second template letter and then go on for a court application? I am also struggling to pay the £400 per month. Is their a templete letter to appeal on financial hardship grounds that I could use or should I incorporate this into a court application.

Any help/advice/suggestions would be greatfully received.

borgbaiter

hi

as a sole trader i assume you have a business account? if this is the case the oft case does not affect any claim you make. i would suggest you do the standard letters and then take it to the financial ombudsman.

good luck



Borgbaiter

sdooley

The charges are interest? At about 12% p.a. No-one has ever suggested banks can't charge interest on overdrawn balances. The £400/month is causing you hardship? Fair enough but did you really think you could keep the double entry money?

You've spent it and they could have sued you for the entire sum. Their forebearance in not doing so is quite helpful. Their interest rate is reasonable, especially for a business account. Up to you but I wouldn't kick up a fuss as they might just take away the ball and sue you for the lot.

On a practical note, if you are going to stop paying or try to renegotiate your quite generous deal, remove your positive balances from other accounts with that bank first. Otherwise they will exercise their set-off by sweeping your savings to clear your debt.

MarkyMarkD

Frankly, being given 2 years to repay an amount which was sufficiently large that any competent businessperson must have been well aware was incorrectly recorded in their bank statements, is a good enough deal. Paying interest at a relatively reasonable rate is also not unfair.

I don't think you have any grounds for complaining to anyone, to be honest.

borgbaiter

hi

its a bank error id see what the fos say anyway. their quick enough to punish us for being a penny in error.

maybe you could explain what happened exactly coz im not sure i understand what happened.

Borgbaiter

ps .12% isnt that reasonable in my opinion

MarkyMarkD

Given that it's basically a sort of unauthorised overdraft, caused by the OP "accidentally" not noticing a £10k bank error in their favour :rolleyes:, I think it's quite reasonable.

The OP always has the option of borrowing the money elsewhere cheaper, if they can do so.

CONB

Thanx for the advice most of which was useful.