Can banks do this?

babybell_2 · 24 October 2008 at 9:35AM

:mad: I have been a customer with HSBC for 17 years now, I have two accounts with them, one I use to pay my salary into and keep extra money in, the other I use as a bills account with all my DD’s and SO’s so I transfer a set amount each month from my salary account to my bills account the bills account has been open for a few years now. I have had an overdraft facility on my salary account for 17 years and an overdraft facility on my bills account since it was opened.
Last year HSBC decided to introduce an arrangement fee to the overdraft facility of all accounts, basically they send a letter once a year and say they have reviewed my account and agreed I can continue with the overdraft facility and then charge my £25.00 for the privilege. I have rung them and asked what they do with my account when reviewing that costs £25.00 but am unable to get any justifiable response.
Are they allowed to do this?

I have now been informed by letter that they are closing all their account and opening better accounts for their customers (a result of customer feedback, well I for one was never consulted) the new charges make reference to the fee arrangement of the overdraft so by default of continuing to bank with them it will be assumed that I have now accepted these arrangement fees. Is that allowed?

I did complain about the arrangement fee the first year and they waivered it as a good will gesture but this year they will charge.
Do you think it’s time I changed my bank??

snake16 · 24 October 2008 at 10:13AM

Yep, change banks, vote with your feet!

Margin_Walker · 24 October 2008 at 11:33AM

The £25 charge should only be applied if you have exceeded your overdraft limit or requested an increase to the overdraft in the six months prior to the review. If this isn't the case i would ring them as it may have been charged in error.

babybell_2 · 24 October 2008 at 10:16PM

No this is a fee they are now going to charge every year to review my accounts and let me continue with the overdraft I have had for 17 years. They have sent letters to all account holders saying they now review your overdraft each year and charge £25.00 to do so!!!

Bismarck · 25 October 2008 at 7:46AM

babybell wrote: »

No this is a fee they are now going to charge every year to review my accounts and let me continue with the overdraft I have had for 17 years. They have sent letters to all account holders saying they now review your overdraft each year and charge £25.00 to do so!!!

we didn't get charged for keeping our OD facilities...I read from another poster that you get charged if you applied for a change in facility or went over the limit (i.e. did something)

ShelfStacker_3 · 25 October 2008 at 3:29PM

Bismarck wrote: »

we didn't get charged for keeping our OD facilities...I read from another poster that you get charged if you applied for a change in facility or went over the limit (i.e. did something)

Precisely.

If, in the 6 months preceding your review date (which you now know, it was the day the letter is dated - it's the anniversary date of when you first got your current OD limit), you have applied for a higher overdraft limit or have informally requested one (i.e. gone overlimit) you should not be charged.

If you can confidently and truthfully (because it can be checked) say you have done neither (in the latter case, regardless of how much) then you shouldn't really be being charged. If you have, then... sorry, but it's in the T&C changes which were sent out November last year. If you didn't read them, not really HSBC's fault...