£70.00 charge for 1p over limit is this legal??

anti_nowhere_punk

Today I recieved my bank statement and found that Abbey/santander have charged me £70.00 because I went 1p over my over draft limit for 1 day!! Surely this cannot be legal??
The charges were created as follows..
Instant over draft fee - £35.00
Unauthorised overdraft fee - £25.00
Advance overdraft interest - £8.52
Instant overdraft interest - £1.61

I have phoned up the telephone banking department and complained and they said they can remove one charge in any 12 month period so agreed to remove the £35.00 charge, but claimed they could not remove the £25.00. So I have written to the manager of the bank saying how disgusted I am because I am still being charged £35.13 for going 1p over my limit, and to me this should be illegal!! How can they justify that??

If the manager agrees to remove the charge then all well and good, but if they dont, is there any further action I can take?
Thanks for any advice you can give.

hicskis

By anti nowhere punk:

How can they justify that??

By your contract. You allowed them to do this to you. It is grossly Unfair, we know it, but can't put a stop to it unless we get Competition into the market place that gives us consumers choice.

Premier_2

anti_nowhere_punk wrote: »

...If the manager agrees to remove the charge then all well and good, but if they dont, is there any further action I can take?
Thanks for any advice you can give.

Of course. Try and live within your existing overdraft or if that is really a problem, enquire as to the possibility in raising your existing o/d a little ... afterall it's only 1p extra you appear to need

By living within existing agreed limits, you will not incur unauthorised o/d charges.

Btw, some of that interest applies to the existing approved overdraft (i.e loan) you have.

dunstonh

There is something wrong with your figures which suggest you are not 1p over your limit. You were charged £1.61 interest on the amount over your limit. So, it has to have been more than 1p. £8.52 applies to your existing limit.

anti_nowhere_punk

There is nothing wrong with my figures, I went 1p over my agreed limit for one day and thats what they are charging me!

davidgmmafan

Further evidence that these charges are a punishment and nothing whatsoever to do with service. Unless the OP perhaps feels he has benefitted from this 'service' in some way.

I know the penalty charges argument is dead legally, but that's exactly what they are.

Frankly I'm surprised, with all of the attention on this issue, that there are still banks that levy instant overdraft charges. I agree there is a cartel in operation and the REAL competition is needed to bring about change.

However many banks at least give 28 days notice of the charges. This sometimes creates other problems but is IMO the lesser of two evils. In the situation above there is no proportionality, and no chance for the customer to put things right - which is afterall what the banks claim to want from thier bad bad customers.

So to sum up yes it is legal, but the law is an !!!.

As others have said consider reveiwing the overdraft, or finding an account which doesn't have such eye watering charges or such a cynically approach to levying them.

I am unsure if the instant application of the fees has any bearing on the unfair relationship stuff...

You can get revenge, complain to the FOS which will cost them a few hundred quid. Don't mention to the bank or the FOS that this is the reason you are going through the FOS.

dunstonh

There is nothing wrong with my figures, I went 1p over my agreed limit for one day and thats what they are charging me!

So how do you explain interest of £1.61 on a 1p debt?

You can get revenge, complain to the FOS which will cost them a few hundred quid. Don't mention to the bank or the FOS that this is the reason you are going through the FOS.

The FOS have a filter system to remove complaints before they get passed on to the charging stage. The FOS can also waive the charge of vexatious complaints.

Graham_Devon

So the interest rate is 161% per day?

I somehow think not.

natweststaffmember

The OP has said 1p over their existing overdraft limit which they have been charged £60 less £25.00 the bank have agreed to refund. The interest is for the authorised overdraft since for 1 day, I assume that it would have been minimal interest on that figure.
Personally, I would have written in and asked them to refund all the charges minus interest charges of course based on the length of time the account went over and the amount.

davidgmmafan

"The FOS have a filter system to remove complaints before they get passed on to the charging stage. The FOS can also waive the charge of vexatious complaints."

I don't see how the second how the one applies, and I do think there is a basis on complaint if the charges are applied instantly. This is clearly designed to maximize the charges as it gives the customer no chance to put it right.

Why can't we just have a rule that the charge won't be more than the amount involved? It would go a long way to resolving these issues and save the banks a lot of money responding to complaints I'm sure.