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Has your overdraft been cancelled?

edited 5 September 2013 at 12:32PM in Budgeting & bank accounts
230 replies 102.1K views
Former_MSE_GuyFormer_MSE_Guy Former MSE
1.7K Posts
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edited 5 September 2013 at 12:32PM in Budgeting & bank accounts
We're hearing worrying stories of banks closing people's overdrafts, while they're overdrawn, without warning and sometimes adding charges because they're then in the red.

We want to know how widespread this is, so please report your story if it's happened to you.

Please include:
  • Current account provider
  • Overdraft limit before change
  • Overdraft balance at time
  • New overdraft limit after change
  • Whether this happened at an official overdraft review
  • Any charges
  • Whether you were notified
See our news story for more information and the news story discussion thread to debate the issue.


  • KavanneKavanne Forumite
    5.1K Posts
    I've not had mine removed but I used to have a preapproved overdraft of 9500 available with halifax. It is now 1000 which is my current limit! This changed about 1 month ago.
    Nuns! Nuns! Reverse!

    'I do my job, do you do yours?'

  • edited 28 April 2009 at 11:15PM
    newfoundglorynewfoundglory Forumite
    1.9K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
    edited 28 April 2009 at 11:15PM
    I had always had a £10,000 overdraft available with Halifax, which I never used. I have always wondered why I qualify for what seems such a massive limit... since I dont consider my salary to be huge... only average. I believe if I call Halifax they can do up to £15,000 by request.

    HSBC offered to increase my £500 limit with them to £4,500 and offered a credit card on-top with £5,500 initial limit. No questions asked.

    I'm inclined to believe you are more likely to have your limited lowered or removed completely if you exceed your limit or in anyway become a bigger risk to the bank.
  • subhumansubhuman Forumite
    26 Posts
    My brother and his partners Halifax overdraft was taken away earlier this month. £500, 7 days to clear the overdraft. No incidents of exceeding the authorised limit in the past, but for a week or two of each month well into the limit until salary payment received.

    As a family with two young children demanding it back in 7 days has left them really struggling this month.
  • We've had a business account for 35 years, at various times we've had an overdraft which we've not always used. Our bank called in the overdraft because they said we had not met the terms of the contract which they say stated that we had not returned to credit within one month.
    Nowhere in the contract did it state this and the bank later admitted they were wrong, but we still had to repay the overdraft of £15000 despite them having security from us of over £1m.
  • JustamumJustamum Forumite
    4.7K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
    Oh goody, another opportunity for people to whinge that a line of credit that was intended for short term use, that they were constantly up to or well into the limit of and was always billed and legally noted as being repayable on demand at any time, was taken away from them. As if MSE didn't have enough.

    Overdraft misuse is a big problem, and one of the reasons we're in so much deep sh*t at the moment imho.

    We have a £500 overdraft limit which, to be honest, we would struggle without at the moment. I am trying to reduce it month by month but due to our not particularly high income, but high overheads (rent alone takes more than half our income) it's a very slow process chipping away at it. I don't see it as 'free money'. It's our safety net on this tightrope of life.
  • Hi,

    Lloyds TSB have done this to me on one of my current accounts. They initially started reducing my overdraft on a monthly basis without any warning and then adding huge unjustified charges. After several visits to the branch manager and basically making myself a nuisance I was able to get these particular charges refunded ( partly due to showing the manager a copy of the complaiont letter I was going to send to his boss detailing the managers incompetence!).

    However 3 months later, the overdraft disappeared completely leaving me £284 overdrawn with a zero overdraft limit. They then charged me nearly £230 worth of charges on top of this. In order to pay it off I had to get a small loan from Blackhorse as I dont have access to that kind of cash in any one go, hence why I was overdrawn in the first place.

    Since this they have now done the same to my other current account with them although they have at least given me one weeks warning on this.

    They have also allowed my debit cards and cash cards to expire and are refusing to reissue them. I wonder if this is them being difficult because I have submitted my requests for £2600 of charges to be refunded and am now in the process of claiming financial hardship.
  • I know there have been warnings about these - thought I'd share my experience. I 'upgraded' my Bank of Scotland Current Account to the Ultimate Reward Current Account - as far as I could see I'd get a £300 interest free overdraft and some other benefits.

    My first attempt took three weeks to receive a letter to say they couldn't process my request and that I could reapply. The second time it worked, I received my new Visa Debit card and welcome pack.

    Again, in this literature it mentioned the interest free overdraft of up to £300 - no 'special requirements'. I continued to use my debit card over the Easter weekend - only to receive 4 'Paid Item Fees' of £35 each the following week, one for a £3 transaction, and the largest was £10!

    I was then told the overdraft was available 'on request', so I requested it, and they would not agree because the account was over the existing limit!

    I've written to them requesting the 4 fees, plus a £28 maintenance fee to be refunded as I fit the financial hardship criteria.

    On a more positive note, the Financial Ombudsman (well, an FOS Adjudicator) has written to BoS twice now upholding a previous complaint regarding fees charges for Direct Debits they bounced after they had been cancelled. BoS feel they are not responsible for their own fees now! This is being referred to an Ombudsman for a Final Decision - I've asked for the 2 fees plus £75 compensation which the FOS supports.

    Perhaps it's because of this they've been awkward over the overdraft lol!

  • H_C_TH_C_T Forumite
    11 Posts
    My younger sister still lives at home and until recently she was claiming income support, she has a current account with the Haifax and a small overdraft of £150. As she has a little boy to care for she was regularly in her overdraft and relied on it solely at times like Christmas and Birthdays. One week she went to withdraw some money from an ATM only to be told there was nothing there. She queried this inside the branch and was told her overdraft facility had been reviewed and that the bank had decided she could no longer have one. Basically her benefits had been paid in and the bank had just taken them away leaving her penniless. She was told she should have received a letter in the post, no such letter has ever arrived. (This was in January) Two weeks later her overdraft facility was reinstated without word or warning and for no apparent reason. She has still received no written correspondence from Halifax as to why this happened
  • edited 29 April 2009 at 10:42AM
    wigglywiggly Forumite
    292 Posts
    100 Posts
    edited 29 April 2009 at 10:42AM
    yep happened to my OH. his industry (he's self employed) has been hit hard so hasn't been working much at all. Some work he did, paid into his account and the bank reduced his overdraft by that much !!!!ing up a couple of DD's

    no warning

    thankfully it wasn't a problem as I have been able to cover my partners outgoings whilst he's not working but some notice would have been good :(
    Trying to get on top of finances one step at a time
  • Have overdrafts for 10 years with 2 banks, but never used them. Amount set by me.

    Nationwide seem to have left well alone [£1400].

    Northern Bank has withdrawn it [£1000]. Because we had never used it! Notified last week by letter and this was reason given. I shall contest it and move account if they 'hold-out'. I feel we are being penalised because we've always kept the a/c in credit [just] and they are unable to levy any charges.
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