Why do banks allow unauthorised overdrafts anyway?

djm1972

Apologies for starting a new thread but this is something I want to understand in relation to this whole charges and fairness or otherwise of "unauthorised overdrafts".

Is there some kind of payments guarantee between various financial institutions that obliges a bank to make a payment even if that payment would take the account balance over (or rather under) any authorised overdraft limit?

Why can't the account just "hit the stops"? No more money. Sorry. Direct Debits returned unpaid etc...

MrLeeLee

djm1972 wrote: »

Why can't the account just "hit the stops"? No more money. Sorry. Direct Debits returned unpaid etc...

Because banks know that from time to time people struggle for money, and they are now allowed to charge whatever they want whenever people go over their limit, even if those reason are totally out of the hands of the customer.

They are utter utter scum, no other words for them, but we have no option to use them.

willo65

If you have as an example a d/d for car insurance going out and will take you only £5 o/d would you prefer they bounce it and you are uninsured or as its only £5 pay it for you?

fatlad9

mine have paid my mortgage DD in the past when my previous employers decided to get arsey with my last pay packet. was about 500 in my account, expecting another wedge, but didnt get it when expected, so HSBC paid it and charged me. in that instance im more than happy.

what i dont like is even if im in an unauthorised overdraft unknowingly, i can still buy items in shops with my card. it should say no in this instance.

mr.brightside87

Blatant profiteering of those who are vulnerable. It's all to keep the high earners happy.

It's disgusting. It really is. And to think the ones they are pooping on have helped them out! Sure doesn't feel that way!

I am now going to have to find a dead end job after uni to pay my main debt before I get my profession and have to pay my student loan. That's if I can even open up another bank account

pie81

fatlad9 wrote: »

mine have paid my mortgage DD in the past when my previous employers decided to get arsey with my last pay packet. was about 500 in my account, expecting another wedge, but didnt get it when expected, so HSBC paid it and charged me. in that instance im more than happy.

what i dont like is even if im in an unauthorised overdraft unknowingly, i can still buy items in shops with my card. it should say no in this instance.

how is the bank supposed to know whether you are in your unauthorised overdraft "knowingly" or "unknowingly". from their point of view both these examples look exactly the same. you can't say they should pay one but not the other really.

fatlad9

mr.brightside87 wrote: »

Blatant profiteering of those who are vulnerable. It's all to keep the high earners happy.

It's disgusting. It really is. And to think the ones they are pooping on have helped them out! Sure doesn't feel that way!

I am now going to have to find a dead end job after uni to pay my main debt before I get my profession and have to pay my student loan. That's if I can even open up another bank account

welcome to my world!!:rotfl:

fatlad9

pie81 wrote: »

how is the bank supposed to know whether you are in your unauthorised overdraft "knowingly" or "unknowingly". from their point of view both these examples look exactly the same. you can't say they should pay one but not the other really.

i wasn't clear sorry... i meant that you cant have it 2 ways, but i dont like being charged £30 when i've been and bought my dinner for £3 at the shop, but i dont mind the charges if its for something as important as paying my mortgage.

in an ideal world though, the charges would be much less

fuzzybear01

I found that they wouldn't pay a £30 DD on one occasion, but did allow a £500 fraudulent card payment go through when I had no money in my account. When I asked why, they said it was to save their customers being embarrassed at the till! Rubbish!

mr.brightside87

fatlad9 wrote: »

welcome to my world!!:rotfl:

I didn't mean any offence though matey.

I was just saying that it was my choice for going back to education and now it's put that at jepordy thanks to the banks and their extortion

ganonman

I'd prefer to be embarrassed at the till, rather than pay £30ish for the previlige of avoiding it.

As to direct debit charges, what about when they charge you £30ish for not paying it?

Lastly, if they gave you 30 days instead of 14 days notice for a fee, it would reduce the risk of getting another fee, as a lot of people get paid monthly.

I think fee's are a necessary evil, but only at a realistic level, of say, £5 or something.

But that's just me.

One thing that winds me up is people that say that people who use their unauthorised OD are committing theft! Are they serious? Banks are not obligated to make their systems give you money that you don't have. Thats like leaving a wad of cash in the street and waiting for someone to take it before you fine them for theft, when you could just not leave it in the street in the first place.

Ah well...