HSBC Overdraft Advice

wonderprice

I am in my second year of study, at the end of last year HSBC raised my overdraft from £750 to £1500.

I was not expecting this, especially as when I had asked for it to be raised then said they couldn't.

After this it was rasied, then about a week later I got the letter saying it had been raised. I read the letter and it said that the overdraft was interest free, at least from reading and re-reading that is what I got.

However, I was nearing the end of the over draft, when suddenly I get a massive bank charges to be applied to this account notification.

I go into branch they tell me there is nothing they can do about it until it happens, I go through my overdraft with the guy he says, he can't see why I have been charged debit interest. I tell him I am in my second year he looks and checks I do infact have a £1500 overdraft and cannot see any reason for charges.

He informs me that they can't do anything about it until it has come out and to message the online help.

So I do, and I recieve an exceptionally patronising message that says my "formal limit is £1500" but they will charge me interest on anyting about £1250, at no stage in the game has this been made clear and nowhere did this charge state what it was for.

I am appalled and have been with hsbc for a very long time, I cannot believe how very sneaky this seems.

I do not know what to do, I am going to re-read my terms and conditions for the overdraft.

Can anyone offer any advice? Or has the same thing happened to you?

I am very annoyed and really don't know what to do next!

Thank you,

Holly.

Lokolo

I have never heard of this?

Try reading the T&Cs, take them into branch, say you want to charges removed as there is nothing in there.

Other than that you can reduce the overdraft to something more sensible and pay the £25 overdraft review charge.

melancholly

i'd ring up and have strong words with them.

actually i'd run away from HSBC as they seem to keep coming up with new ways to treat students badly.....

Infidel

Change banks, change banks.

They screwed loads of students over recently when they decided to start charging people's previously interest free overdrafts at credit card interest rates. ****s!

wonderprice

I think I am going to change banks, I have been with HSBC for about 5 years so its going to be a bit of hassle.

I am going to make a few complaints before I go.

Can anyone suggest where to go?

I tried RBOS before and was refused for anything, this was before I had my names on bills and things like that.

Margin_Walker

Ok, I've read your post but it's not really sure what the massive charge is. Sorry if i've got the wrong end of the stick but it sounds like you are being charged interest for any balance above £1250. assuming you have maxed out the overdraft at £1500 you will be charged interest on £250. At their debit interest rate of around 18% from memory thats going to add up to less than £5 per month.

how much are you being charged? does it say what it's for?

Mike1989

In regard to the first post, off reading it I'm guessing you are saying the formal limit is £1500 but you are charged interest on anything above £1250, correct?

If so they have done nothing wrong, or at the very least they did not make it clear to you. I took this from HSBC's website found on the student account under more info.

Interest Free overdraft entitlement*An optional interest free overdraft* – typical 0% EAR variable.

• Up to £1,000 in first year
• Up to £1,250 in second year
• Up to £1,500 in third year
• Up to £1,750 in fourth year
• Up to £2,000 in fifth year

This confirms that you have a £1,250 interest free overdraft. If they have given you a formal £1,500 overdraft that means you pay interest on the £250 and not the full £1,500. I think this will have been made clear in the terms and conditions, or, in the letter at some point. If not you might have a case to complain they did not make this clear. However, they may well point you in the direction of the maximum interest free overdraft limits that are stated clearly on their site and probably in the application process/leaflet.

So apologies if I sound harsh in this post but the bank has not done anything wrong. My advise is if you require a larger overdraft to apply to another bank. There are possibilities of the Halifax were you can get up to £3,000, not guarantee however that you will get anywhere near it. But you might get a larger interest free overdraft than you have right now. Another is Abbey, poor customer service ratings on the large, but they offer a larger interest free overdraft. So I do agree with Infidel that you might want to consider changing banks, but, HSBC do state what the limit for interest free overdrafts are on their site. So you might have missed them, or not been made aware of them, if that is the case then you need to make sure next time. Sorry it sounds harsh as it is not meant that way

wonderprice

I thought that I would wait until I found all the information regarding my overdraft to reply to this thread.

Having found the letter regarding my overdraft, I have decided to take my complaint back to HSBC. On the letter, it simply states the product as £1500 overdraft, then states the "product" is interest-free.

Nowhere does it state the figure of 1250, interest-free and further interest on the rest, this is the letter they send a month after they have increased the overdraft.

Also having contacted HSBC in branch and via their customer services department they have been unhelpful and in branch completely unaware and confused about why I would be charged any interest.

Thank you for the posts, helpful or not. HSBC were misleading in there approach, which is a shame but there you go.

Cheers!

Holly.

SkintButHappy

I recently had a letter from HSBC telling me that instead of another year of intrest free overdraft (im now a graduate), I now have 6 months to pay off all £1500 of it else their going to start charging me 18.5% which is disgusting. Thanks HSBC

(luckily I already have £500 tucked away towards this....)

whitfreak

When I graduated in 2007, HSBC attempted to get rid of the interest free overdraft on all "new" graduate accounts with about months notice, or you had to move to a premium account at £15 a month. They backed down, but it broke my trust so I'm now with Natwest... Ironic as I didnt have much of an overdraft.

But HSBC have always had bad graduate overdrafts, the longest they give you to pay it off with them is a year. This fact isnt hidden, but alot of people presume they have longer because most other banks give atleast 2 years. So SkintButHappy I would advice looking to switch.

Wonderprice, How long before the increase from £750 to £1500 did you ask for your orgininal increase? And was the increase you wanted about £250... As its possible that something entertaining happened in their computer system. Anyway while overdrafts are changable at a banks whim, if the you dont have anything in writing saying that they'll charge you for between £1250 and £1500 then they should refund your charges.

I also find the partonising message you got slightly strange, as I could have sworn that when I had a HSBC overdraft, if I went over that limit I got charged interest on the whole balance not just on the bit thats over the limit. But that may have changed. So I'd double check that you have been charged the way the partonising person claims, as I suspect that you arnt. Then take your letters etc down to your branch, and thash it out. If that doesnt work I'd imagine that its an open and shut case with the ombusman as you have an agreement saying one thing and they are doing another.

Mike1989

wonderprice wrote: »

I thought that I would wait until I found all the information regarding my overdraft to reply to this thread.

Having found the letter regarding my overdraft, I have decided to take my complaint back to HSBC. On the letter, it simply states the product as £1500 overdraft, then states the "product" is interest-free.

Nowhere does it state the figure of 1250, interest-free and further interest on the rest, this is the letter they send a month after they have increased the overdraft.

Also having contacted HSBC in branch and via their customer services department they have been unhelpful and in branch completely unaware and confused about why I would be charged any interest.

Thank you for the posts, helpful or not. HSBC were misleading in there approach, which is a shame but there you go.

Cheers!

Holly.

Didn't you say you are in your second year?

If so maybe they have made a mistake and given you the third year limit whilst your actual account details say year two. And having realised their mistake have revoked the third year limit and placed you on the two year limit, whilst keeping your overdraft at £1500 but charging you for use over £1250. It sounds dodgy, yes, but it is the only thing I can think of as to why they will be charging you.

As I posted in the last one, sorry if it was not helpful or sounded off hand, but the limit does say on their site and in their student account booklet, £1250 for year two but £1500 for year three. So maybe they have made some sort of mistake and have changed it and now it is costing you money. That is the only way I can think of unless you agreed or got them to agree to an interest free £1500 rather than what they offer to other year two students.

Personally their customer service and branch staff sound like they don't know their products. It makes you wonder how they got their job. So the only thing I can advise you to do is this;

Go into your bank and ask to speak to someone in charge not just a bank clerk because they haven't been helpful to date. Maybe even ask if you can see the manager or at the very least a personal banker or student advisor. If you can get such an appointment, then tell them quite clearly that the correspondence they have sent you states you have a £1500 overdraft, the product is interest free, and you believe they have made a mistake. Go onto say that you want the charges wavered because you have done no wrong, just followed to the limit they have set you in this letter. If they say no we can't do that, or, you read it wrong etc, placing the blame on yourself. Tell them you will be now switching all your HSBC accounts and no longer doing your business with them and you will be lodging a formal complaint to their head office. Not only stating how annoyed you are that they have made a mistake and are now charging you, but for the attitude you have received off their bank staff and customer service. That might just make them reconsider because having formal complaints lodged against them probably won't looked good on that manager's record. If you can't get that out of them switch to another bank that offers a larger overdraft limit.

That is what I would do. Ask to speak to someone in charge, a manager, an assistant, or even just a personal banker. See if you can get the charges waivered or even just get them to admit wrong. If not, take your business elsewhere to a bank that will offer you a larger interest free overdraft. IT does sound like hassle, but you can get banks like Lloyds, Barclays etc that have their own accoutn switching team and they will sort everything out for you liek wages and SLC payments.