Overdraft from £100 to £550

ian2002

Hey everyone

Hoping I can get some advice on a shocker of a letter I received over the weekend.

I took out a Halifax current account around eight years ago.

I was enticed with a £100 overdraft limit which I used some of straight away, around £85 from memory.

My intention was that I would use the acc during the summer to pay a salary into but I ended up working for my folks and it was cash in hand.

Went to uni at the end of the Summer and forgot all about the account. I've not paid any money into it since and nor have I taken any money out of it, other than the original transaction.

Forward eight years and I receive a debt recovery letter from an agency saying I now owe £550 in relation to the Halifax account!

Spoke to Halifax and the info they have given so far is limited but they were able to say that fees of £28 per month have been added to the balance over the last three months. So I'm guessing this has been happening for over a year or more.

As I forgot I had the acc, the bank did not know that I had moved addresses several times. So I'm presuming what has happend is that small amounts of interest have been charged on the overdraft balance and once it has gone past the £100 mark they have started to add the charges each month.

Do I have any comeback on this or am I screwed because they could not contact me when they started to charge the balance with the fees, due to me moving away?

Is there a limit to charges they should make if the account is effectively 'dormant' which they should then freeze until they can trace the customer?

Any help would be appreciated.

Ta!

grumbler

Well £450 'interest' for 8 years on initial £100 amount is just 23.75%APR. Not the worst rate for such a risky borrower ...

BTW, £28 per month during 8 years is £2688 ... You are lucky that they stopped adding this after a few months.

ian2002

Appreciate the common sense approach to the answer but was hoping for a way out.

If I'd been using the acc regularly or messing the bank about then I would stand the charges.

It was negligent on my part to forget I opened the acc.
I understand that.

My argument is that the acc was dormant for years and as soon as the interst charged took it above £100 around the start of 2005 by my estimate they then started to add the £28 fees.

There was still no activity and they still continued to add the charges, with the debt agency now wanting their slice.

Individually it seems unfair and there seems to be a lot of posts in the forum about unfair charges and what redress there is in accordance with this.
I doubt it costs them £28 to send a letter to me tellng me that another month has gone by and they are charging me again.

Just seems a bit underhand to me.

MoneySavingSapphire_:D

Have Halifax handed over the debt to a debt collection company then? The same thing happened to a woman I work with, and after contacting the CAB/Debt advice place thing (can't remember which!) she was told that if the debt has been there for over 6 years, and you have had no letter or court summons etc in your hand within that time, you do not have to pay it. Apparantly banks sell these "dormant" debts to agencies who the track you down & write to you in the hope that you'll get scared & pay up. She was advised to write to the company concerned stating that she will not pay as its not legal, she doesn't have to. The company even threatened to start taking it out of her salary, or to accept a final settlement fee - but she doesn't actually have to pay a penny. After writing about 2-3 months ago, she's heard no more from them...
This is not my direct experience though so I can't be more help, but you've had no contact in nearly 8 years (is that right?) and they've passed it to an agency so I'd imagine the situation is more or less the same.... Might be worth ringing. If its with an agency now its to do with them rather than getting your bank charges cancelled....
However, after hearing about this lady's situation, another of my work collegues has decided to stop paying all her credit card and overdraft bills in the knowledge they'll get cancelled after 6 years... this is a terrible idea and I do not condone it...!!!!!!

ian2002

I don't condone that either!

Thanks for leaving a message.

I opened the account eight years ago.
It's not clear when it was passed on to the debt agency but I'm assuming it has been some time this year.
It would not take them long to track someone down that has not been trying to hide I would assume.

I've sent a subject access request to Halifax, to get copies of the letters etc they have sent and the info they hold on me.

Once I've got all that then I'll send in a complaint to them and challenge what they have done.

ian2002

Finally got a reply from Halifax.

They have said as a good will gesture they will refund £280 of the total amount.

This leaves about £266 outstanding at present date.

I'm assuming this is where I ask them to refund the remaining amount or I will be taking them to small claims.....?

robert_harper_2000

go to https://www.consumeractiongroup.co.uk/forum > get a full refund and charge them interest for the unlawful and stupid interest rate! This isn't fair and they WILL back down.

Go to the site and read the FAQ -

ian2002

Cheers mate.

I'm going to send them one final letter hinting that I will go down this route if they do not cancel the charges, hopefully they will bank down and it will be a little less stressful