Banks automatically increase overdraft

AfterDark

Just looking for the answer to above really, have a friend of mines who banks with halifax, who says they just put her overdraft up on her reward current account from £2500 to £11000. Without her asking for this to be done ? Does this happen or has she requested this ?

TMoose

It's impossible that they have done this without her consent. Overdraft changes have to be requested, and T&C's agreed to.

Also, Halifax have a £5000 limit line before the overdraft has to go to specialist underwriting for manual approval. This would seem to rule out a computer error.

Of course, mistakes happen, and I could be proved wrong.

Moose.

AfterDark

Thanks, was hopeing they wouldn't do that to mines but thought she was at it. she has a habit of telling porkies when it comes to her getting and spending cash.

WelshPaul

TMoose wrote: »

It's impossible that they have done this without her consent. Overdraft changes have to be requested, and T&C's agreed to.

Also, Halifax have a £5000 limit line before the overdraft has to go to specialist underwriting for manual approval. This would seem to rule out a computer error.

Of course, mistakes happen, and I could be proved wrong.

Moose.

Could not have said it any better myself.

paulmcerlean

Christ imagine being 11000 into an overdraft and being sent a letter asking for it all back within 30 days.

miss_missy

TMoose wrote: »

It's impossible that they have done this without her consent. Overdraft changes have to be requested, and T&C's agreed to.

Moose.

i dont know about halifax but i bank with natwest and have never asked for increase in overdraft but it was made bigger on several occassions. has not been increased for sometime and currently stands at 2500
i usually got a letter stating it had been increased once they had done it

i know lloyds who i have joint account with, i have to request the overdraft increase

TMoose

miss_missy wrote: »

i dont know about halifax but i bank with natwest and have never asked for increase in overdraft but it was made bigger on several occassions. has not been increased for sometime and currently stands at 2500
i usually got a letter stating it had been increased once they had done it

i know lloyds who i have joint account with, i have to request the overdraft increase

Interesting - I've never banked with NatWest, but it's the first I've heard of overdraft limits with auto increases (which actually scares me slightly - more so that credit cards... Don't know why, but hey!)

I guess now that Lloyds and HBOS are slowly integrating they will maintain their "on request only" increase policy. Which suits me just fine (as an HBOS customer).

Moose

miss_missy

hi Tmoose
i have to admit i assumed that the way my bank did it was how most banks did it, i assumed when you signed up for a current account with an overdraft they say they will review it just like any credit agreement and that ment that not only can they reduce it they can also increase it

i must say im not 100% that lloyds dont increase overdrafts without ppl requesting it as my partner never uses his (our lloyds joint account was originally just his)

jonesMUFCforever

Could it be that OP's friend has misread the new limit - could it be that it is £1100 not £11000?
I agree no bank will automatically raise an overdraft facility to that level without being asked.

miss_missy

jonesMUFCforever wrote: »

Could it be that OP's friend has misread the new limit - could it be that it is £1100 not £11000?
I agree no bank will automatically raise an overdraft facility to that level without being asked.

ohh good point maybe they have actually reduced the limit and shes misread it if so hope she doesnt go on a spending spree or it will be charges galore!!!!!!!!

jambosans

There's nothing in the terms and conditions suggesting they can't do this, in fact, quite the contrary:-

Halifax_Current_Account_Terms_&_Conditions wrote:

25.2 If we agree to an Arranged Overdraft, we will decide your overdraft limit and tell you what it is. We will also tell you when we will review it. At that time we will review your Arranged Overdraft and decide whether or not to continue to provide it at the same limit, and inform you of our decision by letter. We may also change your Arranged Overdraft if condition 25.3 applies.
25.3 We may change your overdraft limit at any time...

The above suggests, that, just like the original "agreed" limit, upon review, Halifax tell you the limit. There's no implication that Halifax have to seek express permission before increasing the limit. If the customer does not "agree" to the new limit, they can contact Halifax, and have it changed (subject to status).

Similarly in the past, I've had the credit limit on two credit cards increased, with a letter informing me - I wasn't asked beforehand. I don't see why lending on a bank account is any different.