Banks cancelling overdrafts

ShelfStacker_3

*MF* wrote: »

Were that entirely true, (ie., were the T&C's not only of Banks, but other financial intitutions) not subject to any form of challenge - then we should disband the FSA, the FOS and the OFT ... they can be not only questioned, but challenged, and are being.

I would, once again, point out that you are under no requirement to sign any contract you do not wish to. The terms of having an account with a bank or having an overdraft facility are made quite plain to you, and if you do not agree with them then either don't sign or take advantage of the cooling-off period (which is explicitly there for cases where you don't agree with the T&Cs). Where those terms are actually illegal or unlawful (which has still not been proven in court with regards to bank charges, as much as people like to pretend it has been), then they're obviously subject to the ire of courts or regulators. But you simply cannot decide, apropos of nothing, that certain perfectly lawful contractual terms do not apply to you simply because they are inconvenient for you.

jambosans

*MF* wrote: »

Am I wrong in questioning therefore, that the granting of an "overdraft" as the form of credit - precisely because of its very nature, namely the immediate repayment on demand- fails that test of responsible lendng - not in my words, but in the words of the Banks themselves?

I fail to see how an overdraft being repayable on demand would be classed as irresponsible lending? The Banking Code refers specifically to this:

"13.2 If we offer you an overdraft, or an increase in your existing overdraft limit, we will tell you if your overdraft is repayable on demand (in other words, if you have to immediately pay back any amounts you owe when we
ask you to)."

The overdraft review date is printed on each statement for Halifax Bank of Scotland customers, and in most cases they should give you 30 days notice - all source from HBOS terms and conditions.

*MF*

jambosans wrote: »

I fail to see how an overdraft being repayable on demand would be classed as irresponsible lending? The Banking Code refers specifically to this:

"13.2 If we offer you an overdraft, or an increase in your existing overdraft limit, we will tell you if your overdraft is repayable on demand (in other words, if you have to immediately pay back any amounts you owe when we
ask you to)."

The overdraft review date is printed on each statement for Halifax Bank of Scotland customers, and in most cases they should give you 30 days notice - all source from HBOS terms and conditions.

You are satisfied, as you must be therefore, that no overdraft has been granted by a Bank to anyone who is NOT in a position to repay it in full immediately on request, whenever that request may be made, and irrespective of the borrowers circumstances at that time.

If that be the case, I apologise, and retract any question or doubts I may have so clearly and incorrectly harboured.

Paul_Herring

*MF* wrote: »

It would assist in the development of any comments I may wish to put forward, if either you quoted me in full, or indicated that you had chosen to edit my comments - many thanks!




Again, I would quote from the Banking Code:

The advantages of an overdraft facility includes:

An overdraft is a simple and flexible way of financing changing cashflow requirements

You only pay interest on the amount you are overdrawn each day

The disadvantages of an overdraft facility includes:

In principle, the bank can demand repayment at any time, although some banks do offer 'committed' facilities. Committed overdrafts provide more peace of mind over the standard overdraft as they are overdrafts the bank cannot demand back at any time.

My point remains - the Banks either believe in responsible lending, as they claim, or they do not?

Their criteria for such, was in my first post, thus why I wish it to appear unedited. It clearly states that :

Responsible lending is providing credit, based on background checks and professional judgement, to people who can accommodate regular repayments without getting into financial difficulty.

Am I wrong in questioning therefore, that the granting of an "overdraft" as the form of credit - precisely because of its very nature, namely the immediate repayment on demand- fails that test of responsible lendng - not in my words, but in the words of the Banks themselves?

Should credit be offered to anyone, credit for which an immediate demand for repayment can be made, unless it is clear that those to whom such credit is given are able to meet that criteria at all and any time?

If that criteria cannot be met at all times, then you are correct - the bank have entered into the granting of a facility which is not in anyone's interest, theirs or the customers.

That then begs the question as to who might bear the heavier responsibility for that being the case, and for it being as widespread as I suspect it may be across the UK.

Unsnipped since you got precious about it.

Now for the relevant bits to which I wish to address my comments without clogging up the board with extraneous quoted content as is the norm in such situations, without necessarily stating that said extraneous text has been omitted...

Responsible lending is providing credit, based on background checks and professional judgement, to people who can accommodate regular repayments without getting into financial difficulty.

Am I wrong in questioning therefore, that the granting of an "overdraft" as the form of credit - precisely because of its very nature, namely the immediate repayment on demand- fails that test of responsible lendng - not in my words, but in the words of the Banks themselves?

An overdraft, by it's nature, is not meant to be a long term credit arrangement. By which I mean it's not meant to be used all the time in the way that, say a credit card or a loan can/is.

The text you mention is, I believe, to be applied to (long term) credit in general, and not short term credit such as overdrafts, since there shouldn't be any 'regular repayments' towards an overdraft (except of course the regular income that should be going into that account, which is usually one of the T&C's for having an overdraft in the first place.)

Should credit be offered to anyone, credit for which an immediate demand for repayment can be made, unless it is clear that those to whom such credit is given are able to meet that criteria at all and any time?

Well generally, overdraft limits should be such that the amount can (simplistically) be paid using a month's income. Anything above that that's 'required' would indicate that the customer concerned would be better off with a longer term loan (the interest rates are generally cheaper for starters,) if it's a credit facility that's required (rather than, say lessons in budgeting.)

For (silly) example I'd never dream of using my OD to borrow to pay for a car.

The fact that (for example) my bank are able/willing to offer me an overdraft equivalent to roughly 4/5 months net salary would indicate that they are not practicing responsible lending. Or in my case they would not be if I were to take them up on their kind offer - my current OD is about 1/5th of my monthly salary, and is simply there just incase I forget about a payment that takes me below zero.

pedro123456

Please dont misrepresent what I am saying.......I have not said T&C do not apply because they are inconvenient..................In a court of law the Finacial institutions use them as their weapons...........and judges go along with them.........I say they are unenevenly balanced and unfair...............and as for if you dont agree dont sign.............do you think thats acceptable.......

In effect compeling the customer to HAVE to except your T&C or all deals are off................

these T&C should be arrived at by INDEPENDENT advisors.....not the banks.

ps........if these charges aint illegal...............why are banks repaying them...........let me guess...........they like giving money back to the ppl...........Tell that to the Sherriff of Nottingham.................he was a bandit too ........allegedly

Ta Pete

I_know_my_ABC_and_my_CMYK

PROLIANT wrote: »

Then go, take your CAG cronies off this site with you, close the door behind you on your way out.

Your smiley does not make your post any less nasty!!! This site is about advice not personal opinions or morals.

ALIBOBSY

Well the banks aren't doing anything unlawful, but that doesn't make it "right".
The banks and the gov colluded to create a consumerist greedy boom based on unsustainable credit. They along side others pushed and pushed more credit at people. Whilst I realise you have to take responsibility for your actions, the banks have to shoulder alot of the blame as well.

All this combined to create a feeling that credit is good, and indeed changed alot of societies attitudes to credit. They then expect be able to pull the rug out from under peoples feet with no comeback. Its not on, if on the otherhand they offered an either or choice-pay back the whole amount or have it reduce by an agreed amount each month (or even convert to a short term loan) that would be absolutely fair, both from a legal and moral standpoint. The banks would get their cash back and for many people it would do them the favour of clearing the OD.

We had our realisation about what a bad product an overdraft was a few years ago, we paid it off and the relief was amazing. Would never have one again, was far too easy to add a little extra to each month until you owe far more than you ever intended.

ali x

pedro123456

Kerry typical banks can do as they wish...............unanswerable.........

tell me have you thought of mentioning this to the FOS and or FSA......dont answer let me guess..........no...........because you have no idea(with respect) who they are are what they do..................In any case the the FOS wont get involved until the banks have kicked you around the streets for a while.....and when/if they get involved dont hold your breath...........you'll be looking at the best part of a year for a decision.

Thank you for your contribution all we want now is for everyone elase to join in....................tell all your mates etc about this post/site, and let them have their say............lets sort the bandits out.......and no I'm not playing Robin Hood, I cant stand green leggins.

Ta Pete

Edinburghlass_2

I_know_my_ABC_and_my_CMYK wrote: »

Your smiley does not make your post any less nasty!!! This site is about advice not personal opinions or morals.

You did, however, just say that users will get nothing but abuse on here

Its a sad day when you can read on CAG people recruiting others to post on MSE simply to wind up MSE users, that sort of post was/is not the ethos that either website was set up for nor I hope, condone. There is a place for both websites and all users should be treated politely no matter where they post.

Edinburghlass_2

and sadly I think the OP is a wind up merchant and this thread should probably just be ignored.