MSE News: Anger over new Halifax overdraft fees

sonnimod1

A letter I recently wrote to the Halifax following these charges:

Dear Sir / Madam,
Following a letter received on Friday I write to you to complain about the change to be made to my existing account. I have been made aware that my Current High Interest account will change as of the 06th December 2009. I made a call on Friday to discuss the change only to find that I have no option but to agree to your new policy and terms and conditions. This change will not benefit me as a customer even if I change my direct debits prior to my pay day as was advised. This is because I use the Overdraft facility each month to help manage my financial cash-flow. I also use the overdraft facility and therefore will have no option but to pay the vast daily charges. The total of these charges will be more excessive that a loan from a loan shark!

1.[FONT=&quot] [/FONT]If I were interested in a Reward account I would have taken up this offer when a sales advisor tried to get me to convert several months ago. At that time this was an offer but now its mandated. I find this in itself is unfair and irresponsible. My existing T&C should continue based on the policy I agreed to. I do not agree to the new terms.
2.[FONT=&quot] [/FONT]I was advised by phone that I should change my direct debits to an earlier date I would avoid longer daily charges as I would only be in my overdraft for a shorter period of time. This is incorrect as most months I have unforeseen expenses that I then recoup from work. Therefore, I will still need to use my overdraft facility to manage my funds (something I currently do).
3.[FONT=&quot] [/FONT]I will be paying higher charges not less!
4.[FONT=&quot] [/FONT]The advisor suggested I use credit cards to pay for things instead of my debit card. Once again, totally unacceptable and not responsible advice from a bank!

This new style of banking may be favourable to some customers but not to all. Where it is not favourable as in my circumstance the bank should allow either the same terms to continue or offer something that is just as favourable. I await your response and not just a standard response stating that this is a favourable option to most and my T&C can change any time. You should be able to offer a response that helps my personal financial situation rather than makes my finances less manageable.
I still await a response

PhaedraUK

Personally, I will be voting with my feet. Coincidentally, I slipped £74 into my arranged overdraft this week for the first time in about six months, and don't feel the new charges are competitive for the couple of weeks I will need this amount.

On a more angry note, I feel sorry for customers that - for whatever reason - are unable to move account. Those who can't clear their overdraft, or have a poor credit history (so can't go elsewhere) will be trapped. So, yes ... I agree with anyone who says that it's the poorest who will be hit, and fall into that spiral of charges.

PhaedraUK

YorkshireBoy wrote: »

Apparently Halifax are offering this option to their customers in the form of a credit card transfer (the stoozing SBT).

They'll then pay a typical rate of 15.9% APR (O/Ds were previously 15.9-18.9% EAR), but more importantly will be forced to pay it down (albeit very slowly!) at 1% per month via the minimum payments.

Interesting. I wonder if that will be everyone, though. Or just customers with existing cards, or those that pass credit checks for a new account. Seems likes a 'win win' for the Halifax - they keep their new charging structure, and gain new credit card customers. Everyone else ....

ColinSmith_2

... I can tell you, I'm furious. This will be an extremily poor deal for a lot of poor people. If you're already trapped without a credit line and stuck with an overdraft you'll simply have to pay a fortune for it. Fortunately I can close my account and move it, most likely to the A&L.

This is more protest than anything else - but I am extremely surprised that The Halifax/BoS can even introduce such draconian charges in the current climate - especially after all the taxpayer money being used to bail them and out and support them.

I really think it's a disgrace.

ryeallen

:T Halifax gives you extra.....................outgoings :T

willo65

sonnimod1 wrote: »

4.The advisor suggested I use credit cards to pay for things instead of my debit card. Once again, totally unacceptable and not responsible advice from a bank!

Not really, If used as a budgeting tool and not for long term lending then thsi is good advice as you will also get better protection on purchases and not pay any interest etc as long as balance paid in full every month.

rb10

PhaedraUK wrote: »

Personally, I will be voting with my feet. Coincidentally, I slipped £74 into my arranged overdraft this week for the first time in about six months, and don't feel the new charges are competitive for the couple of weeks I will need this amount.

In those six months, you'd have made £30 in Rewards, enough to let you go overdrawn for a whole month, and your net payment for that would be £0.00. Unless you are keeping something quiet, it sounds like you are one of the people who will really benefit from this account (assuming you earn £1k/month).

PhaedraUK wrote: »

Interesting. I wonder if that will be everyone, though. Or just customers with existing cards, or those that pass credit checks for a new account. Seems likes a 'win win' for the Halifax - they keep their new charging structure, and gain new credit card customers. Everyone else ....

It's just for existing credit card holders. To me, it sounds like a 'win win' situation for the customers. They pay much less for their borrowing, and are guaranteed that Halifax won't just ask for the whole lot back at a moment's notice.

ColinSmith wrote: »

... I can tell you, I'm furious. This will be an extremily poor deal for a lot of poor people. If you're already trapped without a credit line and stuck with an overdraft you'll simply have to pay a fortune for it. Fortunately I can close my account and move it, most likely to the A&L.

This is more protest than anything else - but I am extremely surprised that The Halifax/BoS can even introduce such draconian charges in the current climate - especially after all the taxpayer money being used to bail them and out and support them.

I really think it's a disgrace.

They are introducing these charges because of all the complaints (many of which were fuelled from this site) about the 'draconian charges' when you go into an unauthorised overdraft. The consumer can't have it their way all the time - someone has to pay.

YorkshireBoy

sonnimod1 wrote: »

1. My existing T&C should continue based on the policy I agreed to. I do not agree to the new terms.

The policy you agreed to also allowed for them to materially change the T&Cs with notice. And that's what they've done, so whether you agree or not is immaterial in the grand scheme of things. If you're unhappy, either find a workaround or vote with your feet.

2....most months I have unforeseen expenses that I then recoup from work. Therefore, I will still need to use my overdraft facility to manage my funds (something I currently do).

That's a contradiction isn't it? If this happens "most months" then it's entirely "foreseen" isn't it?

And anyway, why should your bank (and, for that matter, yourself) bankroll your employer?

If you take a step back for a moment (to see if you can see the wood for the trees!), you'll see that point 4 below would address both issues...wouldn't it?

3. I will be paying higher charges not less!

But substantially reduced (eliminated?) if you stop bankrolling your company and shift your DDs back.

4.The advisor suggested I use credit cards to pay for things instead of my debit card. Once again, totally unacceptable and not responsible advice from a bank!

On the contrary, that's excellent budgeting advice, and the bank employee is to be commended for giving it.

wolfina

Well i am very angry about it...Me and my husband both have overdrafts totalling £1200...and only found out about any of this on monday morning. As we both spend most of our time in our overdrafts we will be looking at charges of around £60 a month .....£60 we can not afford to give away for something that used to cost us around a tenner for. I am absolutly disgusted that they have done this and so close to christmas. Why wait till now to tell us and start it in the month leading up to christmas. Had they of told us 2 months ago i would have been able to clear them in time but now i am sat worrying about how to pay them off and still get through christmas with my 2 kids.
And top it all off they have refused to extend our loan which is due up next year, which would allow us to pay off the overdrafts. This after having loans with them for the past 6 years and have never even made a late payment, and have also never went over the arranged overdraft. I swear though i will do anything i can to make sure to can pay them off and shut down my accounts. I am disguted that we have been given 6 weeks notice of this.

jeremys

I used to work for the Halifax. Not only is this a money-raising effort from them, but their counter staff are targeted to book a certain number of 'account reviews' each week, and this change to the overdraft charging structure provides a perfect opportunity to arrange an appointment to discuss it further.

This then provides them with an opportunity not only to see if you can be moved to a more profitable account, but also to identify leads for home insurance, car insurance, loans, moving money in from other banks, and longer term investments.

I suspect I'll switch to the Reward account. I have two accounts, one where my wage gets paid and then another where I move enough to cover all of my direct debits. That means two accounts getting £5 each month from the Halifax - this should cover my ovedraft on my 'spending' account, which is normall overdrawn (authorised) by a few £s for up to 10 days a month. Cost neutral then.