MSE News: Anger over new Halifax overdraft fees

jacquelineh

We are borrowing the money,it is a loan and with interest! There is a recession and jobs are becoming scare,company's are going bust,how many people did rely on that overdraft,when jobs were lost? Its just greed and once again its the taxpayers who suffer.like ML said switch and opt for a better bank,at least for now,before they jump on the bandwagon.
I won't be staying with these greedy bankers!

PlugnPlay

Extant wrote: »

This is not "flailing around" nor is it a measure to try and get some short term cash - it's a move that's long been known about and has been easy to predict since charges reclaiming was put on hold, the commencement of the test case, etc.

Moves such as this take a lot of time, effort and resources to implement - it's not a simple move.

So your feeling is that this is more of a response to the banking charges issue than anything else?

Be interesting to see how this all plays out in the long term.

Sorry to sound so dim - I know folks must think I'm really soft for not knowing about all this before, but I really didn't. Had some other issues to deal with for the past year or so.

noh

PlugnPlay wrote: »

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It could be a measure to try and get some short term cash into the coffers and pay down some of their own debt to the Bank of England maybe? Are they due to make some sort of payment shortly?
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It seems to me like very poor forward planning and management.

The move to this charging structure was first reported in December 2008 and no doubt the planning for it started many months before that. At that time there was no suggestion that HBOS would need to be taken over by anyone and need an injection of public funds.
This charging structure is said to be revenue nuetral and is reported to have been devised to be compliant with the expected outcome of the unfair bank charges court case. As well as complying with the OFTs desire for transparency.

I believe it may very well have been devised by HBOS to address issues highlighted in this OFT report published in July 2008:-
http://www.oft.gov.uk/shared_oft/reports/financial_products/OFT1005.pdf

PlugnPlay

noh wrote: »

I believe it may very well have been devised by HBOS to address issues highlighted in this OFT report published in July 2008:-

This is interesting reading, thanks for the linky

opinions4u

PlugnPlay wrote: »

Been pondering the question as to why they are doing this. Do you think it is just a measure to make the figures look better?

No, it isn't. That's a beneficial side benefit for them.

The concept was dreamed up well before those in charge of the Banking Products team would have really known about the specific impacts of the Credit Crunch.

It was all about coming up with a new charging structure that was cost neutral and different to the old structure that got Martin Lewis and the OFT excited.

It could be a measure to try and get some short term cash into the coffers and pay down some of their own debt to the Bank of England maybe? Are they due to make some sort of payment shortly?

Again, the concept and pricing structure was certainly intended to make no additional income. It was meant to protect existing income by charging in a different way - which was always an inevitable outcome.

I would guess that the overdraft fees charged on the old Moneyback accounts have raised more than expected. This has allowed them to maintain the £5 a month Reward, despite interest rates falling siginicantly since the original planned launch last February.

It looks as if the net effect will be to loose those customers who have smaller overdrafts very quickly, but it still isn't making much sense to me because these are not free overdrafts -they are overdrafts on which 19% interest is being charged, which is more lucrative than the mortgages which have a much lower interest return. Is it about 5% svr at present? And some will be lower.

The risk of loss on an overdraft is massively higher than on a mortgage.

Then having a quick scoot round the board, many new customers are opening up the new reward account, and it seems some quick thinking can net quite a few rewards without them actually receiving the cash flow into the bank that they seem to have envisaged.

There are those who have taken advantage of the T&Cs. But the majority of account holders will fund with their salary and maintain an average balance of over £1,000 in the account at any one time.

I would say that the £5 benefit is clearly funded by the £1 charges.

It seems to me like very poor forward planning and management. There's a few bodies about who have actual banking experience, and so I stand to be corrected, as these are just my own random thoughts, but this looks like a bank flailing around in a bit of a mess at the moment.

The concept was planned long before they were in a mess. Indeed, the retail side of HBOS remained profitable throughout the lowest points of the Credit Crunch.

The mess was in their Corporate lending.

trynsave

jonmercer wrote: »

OMG, I can't believe the attitude of some people on this site, you think that people want to live in an overdraft? I'm sure half of you actualy work for the Banks. tryansave, do you just come these forums to wind up the less fortunate?

Definately not, although I did work for one many, many moons ago.

How do you know that just because I don't have an overdraft I am less fortunate than you? That is very presumptuous of you. I have quite a large t-shirt collection too, you know the lost job one, clapped out car one, and the best - the unexpected funeral costs one .. to name but a few. Like I said life happens to us all, but I 'shop' on Freegle, at Nearly new NCT sales etc, and don't spend any more than I have to.

Where there is a will there is a way, lots of you just aren't prepared to go there! I don't like doing it and would prefer to go to a shop and buy new stuff when I wanted/needed, but I can't afford to so I don't.

I object to the opinions on here that overdrafts are an evil fact of life. How many who struggle to cover your outgoings have loan repayments and credit card committments included in your monthly spending? There you go ... you spend too much!

sigsoldboy

Hi, I'm asking those that are unhappy with Halifax to make thier voices heard by petitioning No 10.

I'm a new user so cant post links but please can you visit No Downing Street, petitions and search for halifaxcharges. The petition should come up

The Goverment own 43% of this bank and should be doing something to protect those on less income, first they get rid of the 10% tax and now they smack on fees which are all obviously aimed at those less weathly.

sunnydais

these £1 a day charges for using your authorised overdraft facility will push some over the edge financially especially if you have a curent account and bill payment account using overdrafts

I am working on repaying debts myself after tipping over the edge financially so I have sympathy with those who are struggling without this unexpected charge hitting them

rb10

sunnydais wrote: »

these £1 a day charges for using your authorised overdraft facility will push some over the edge financially especially if you have a curent account and bill payment account using overdrafts

Hence why it is important to actually look at what the bank has sent you, discover how it will impact you, and see what you can do to resolve the problem.

Those people who sit back and don't take any notice of what is happening are always going to draw the short straw, whether we are talking about bank accounts or otherwise.

In this case, the obvious answer is to combine your two overdrafts onto one account. This instantly halves the amount you pay for it. You can then look at reducing your overdraft amount.

emmaBZ

ok im confused, we got a £2000 overdraft and are constantly in it at the minute, between £800-£2000 overdrawn a month so how will this affect us ?? i do have natwest account with no overdraft.. but as i have mortgage with halifax am not sure how to swap banks and pay overdraft back at what i can afford..?