Banks cancelling overdrafts 21 April 2009 at 11:21AM edited 5 September 2013 at 12:33PM in Budgeting & bank accounts 204 replies 15.4K views

Former_MSE_Guy

This thread is to discuss the following news story:

Banks cancelling overdrafts

Please report any cancelled overdrafts in the reporting thread

Lokolo

Overdrafts are not longterm, that is what loans are for. Overdraft can be removed at anytime.

If you are constantly in your overdraft then surely you should think about paying it off with a loan and think about how to budget properly?

Paul_Herring

Overdraft can be removed at anytime.

I'm not sure that's the point being argued, it's when it's withdrawn without notice, the customer isn't informed, and the bank then takes the liberty of charging unauthorised overdraft fees because the customer is now using an unauthorised overdraft.

PARIS_5000

My bank HSBC made it quite clear that a ovedraft is repayable on demand even through it is review once a year.

iscrimger

I had mine withdrawn, along with my credit card with the same bank, after I applied for my bank charges back. I've not got them back yet. I had to quite intently argue with them to get some form of overdraft facility.

I got a reducing overdraft facility which expires next month. I applied to the 'premium' account where you pay for the facility and was told no. I'm leaving my bank next month to one that can meet my requirements.

As far as I can tell my overdraft was removed because on every statement date I was near the limit of my overdraft. My salary would then be paid a few days later. This continue for sometime. I then moved house and had a few failed direct debits. I was given 2 months notice of it expiring.

In the 3 months I was without an overdraft I racked up £500 in charges - most of that in the period of the first month. This is when I got the reducing facility and I have since complained to the bank about the entire situation and its being reviewed.

In my 5 years with the bank I've not a single blemish on my accounts. In the last 12 months I feel I've been 'blacklisted' from the bank.

KimYeovil

So even the MSE editors do not know the difference between a loan and an overdraft. It is not a story. There is nothing to report.

nicko33

KimYeovil wrote: »

It is not a story. There is nothing to report.

"Technically speaking, banks are allowed to call in your overdraft debt on demand. The Banking Code states this is allowed, but also that banks must inform customers."

The story is that banks are exercising their rights, but not fulfilling their responsibilities.

jambosans

The review date for an overdraft is printed on every statement, and Halifax Bank of Scotland class this as adequate notice. They argue by definition on a review date an overdraft facility is either: continued, increased, decreased or removed. If an overdraft is to be removed before the review date then the customer should be informed - like the article stated, Halifax admitted this was an error on their part.

I don't think a date on a statement (that most people won't think even notice) is best practice, but it is notification that the bank will review your lending on that date and as a direct result this may effect your overdraft. People who live in their overdrafts need to understand that it is a form of borrowing, repayable on demand, rather than viewing it as something which is always going to be available, best to think of it as an extortionate 12 month loan. HBOS has to tighten up it's lending policies and removing overdrafts to call in debt is unfortunately something that will become more common.

rb10

It is a lesson to always read your statement carefully ... don't just file it or throw it in the bin.

gordikin

dmg24 wrote: »

Ah, you've got an A Level in Law ... clearly you must know it all then! :rotfl:

You are guilty of assuming that he actually sat the exam and passed...which I doubt!

Spanish898

aron wrote: »

I thought you were going to do it by yourself? Bottled out already?

Bottled out of what?? :huh:

Posting a letter into the post box isnt especially daunting?? :rotfl:


Im looking to also use a DMP though since tat way it will be more formal,
and i wont have to waste my time messing around with any of the banks nonsense a the DMP would handle it all for me.

So it would be more convinient.