Santander overdraft silliness

djones9960

Hi

I posted last week about Santander arbitrarily cutting my overdraft facility by two thirds, to a level less than I currently owe on the account(I was nowhere near the old limit), and being told I have to go and see them in person in order to appeal.

I went to see them over the weekend and, frankly, the story has gotten a bit, well, odd.

Apparently decisions on overdrafts are made on a monthly basis by people called 'underwriters' who seem to live in an ivory tower. I say they live in an ivory tower because you can't contact them. Apparently no-one (including people in-branch) has their number because 'they are administrators who don't have the training to deal with the general public'.

The appeal, apparently, I can't make until the change has already kicked in because 'the underwriters would just kick it out'....

I called their complaints line yesterday and was told that my complaint would go to the next level up (the manager in-branch was frankly rude; he made out that the bank were doing me a favour by giving me the overdraft to 'save me from financial embarrassment', whereas actually the overdraft is part of the product I signed up to and the whole reason I switched to the account was the cheap overdraft)

The complaints line chappie also said that the reason they cut the limit is that I am now classed as an 'irresponsible spender', based on the amount I paid in that month compared to the amount I spent.

The fact I went on holiday that month doesn't seem to have occurred to them, in spite of the fact that the extra payments I made were to a post office in Wales(buying Euros), getting a FairFX card(which didn't actually arrive until after I'd left, hence the PO stop) and a hotel in Dublin. If it weren't for those I'd have actually been *up* last month by a couple of hundred.

So, essentially, I lost my overdraft facility because I went on holiday.

onlypaddy

hmmm.....reading all your posts, maybe your solution is to stop living in permanent debt? Go to the Debt Free Wannabe board and post a Statement of Affairs using this calculator (you can format the results for MSE at the bottom: http://www.makesenseofcards.com/soacalc.html

They will point out areas to cut back and pay off your debts

djones9960

If you'd read my posts properly you'd have noticed that I have been on my way out of this sort of debt, and it's just this behaviour from the bank that has thrown a spanner in the works.

I've offloaded my credit card and cahoot debt(which Santander also messed with) onto my mortgage, something which may tell you what my credit score (however they calculate it) is given the reluctance of mortgage companies to lend. The only debt remaining is the overdraft and that is coming down at about £200 a month(the increase in the overdraft was £300 due to the holiday; and £200 of that was to FairFX which didn't arrive in time so the increase should have been £100). I could have lived with this reduction if they'd given me six months, but six weeks' warning takes the mickey.

But that really isn't the point. They've moved the goalposts on the account when I didn't break any of their rules. The fact that legally they are allowed to do this I find a bit shocking TBH. It certainly isn't made plain when you take accounts like this one on.

paulmcerlean

You didn't lose your overdraft because you went on holiday. You lost it because you lived in it permanently and the bank rightly over a period of time judged you to be a high risk and therefore removed it.

All above board and legal.

djones9960

Piffle. I haven't had the account anything like long enough for them to come to that conclusion and as I have already pointed out the level of the overdraft had been coming down.

How many times do I have to point this out? The assumption on this board that it is obviously my fault and it couldn't possibly be a mistake by the bank is astonishing.

Reducing the limit to not much more than the maximum level in the previous month (to ensure there can't be any more spending than is paid in) is one thing. This is quite another. To comply with this reduction without borrowing any extra from elsewhere I would need to raise an extra £600 by 5-and-a-half weeks time. Is that reasonable? They shouldn't hand out limits of £2400 in the first place if they don't expect them to be used.

garthdp

The bottem line is that banks do not want to give cheap overdrafts to people.They want them to have expensive ones so are making uit harder and hrder to get and maintain cheap ones.Dont take it personally.You are not really anything to them, just another customer.

onlypaddy

djones9960 wrote: »

The assumption on this board that it is obviously my fault and it couldn't possibly be a mistake by the bank is astonishing.

The assumption by people that overdrafts are a right, and not a privelege, is astonishing. Mind you, it is Santander we're on about, so a mistake is also very probable....

Overdrafts are designed as a temporary lending solution, not a facility to permanently live in. This is why they are repayable on demand.

djones9960

garthdp wrote: »

The bottem line is that banks do not want to give cheap overdrafts to people.They want them to have expensive ones so are making uit harder and hrder to get and maintain cheap ones.Dont take it personally.You are not really anything to them, just another customer.

I don't take it personally. I didn't even take that rude manager personally, I think he may have just been frustrated to have yet another customer venting their spleen at him because the ivory tower people had screwed yet another customer over and the customer care line had told them the problem could be fixed in-branch.

However, pulling the financial rug from under people like this shouldn't be allowed.

Like I said before, they shouldn't give overdraft facilities of £2400 to people if they don't expect people to use them. The fact is, that up until now this has been by far the cheapest credit available to me.

I'd have rather they told me they were going to start charging credit card-style interest than do something like this.

djones9960

onlypaddy wrote: »

The assumption by people that overdrafts are a right, and not a privelege, is astonishing. Mind you, it is Santander we're on about, so a mistake is also very probable....

Overdrafts are designed as a temporary lending solution, not a facility to permanently live in. This is why they are repayable on demand.

Well, actually, I did make an assumption. My assumption was that if I obeyed the rules as I understood them, the bank would have no reason to withdraw the overdraft facility. Like I say, I've never been anywhere near the limit I currently have and I was sold the account based on the overdraft being free for a year and costing £5/month thereafter. No mention of the limit being reviewed and arbitrarily changed, whether I've been in overdraft all year or not.

The facility was by far the cheapest line of credit available to me and to me it is perfectly reasonable to expect me to use it. Frankly, I'd have been stupid not to.

Now that I know the nature of overdrafts (I had no idea they were repayable on demand, they don't mention this anywhere but the small print) I have done a bit of reading, and I've read that the repayable on demand power of the banks is very rarely used anyway.

I'd have assumed that even in those cases the bank would have had some reason other than the overdraft simply being constantly in use within the agreed limit.

blueberrypie

Okay, so you didn't break any of their rules. But nor did they. Whether you noticed it in the small print or not, overdrafts are repayable on demand - and that is one of the reasons that they aren't a suitable product if you can't find the money to repay them fairly quickly and easily.

I think it's important to remember is that it is the bank's money, and that it has the right to ask for it back. If you want a guaranteed amount to be available while paying a bit of it off each month, a loan is a more suitable product.

There's plenty of material available to anyone who wants to slag off Santander - I just don't think your situation is part of it.

Milly25

paulmcerlean wrote: »

You didn't lose your overdraft because you went on holiday. You lost it because you lived in it permanently and the bank rightly over a period of time judged you to be a high risk and therefore removed it.

All above board and legal.

Hmmm. Well I wonder why they have made the same decision about me then?

I have had a £900 overdraft on my joint current account with Santander for the past 10 years. Yesterday I got a letter which simply informed me it would now be £100. No explanation.

In the past 12 months, I have used the facility twice: both times for less than 24 hours, over bank holiday weekends etc, when payments that would normally have gone in on the 1st, haven't gone in until 2nd or 3rd. On these occasions, Santander ALWAYS choose to debit any DD's or SO's due out on the 2nd or 3rd first thing in the morning, but credits are not made until the afternoon.

I could change the DD's/SO's a few days later, but haven't bothered as I knew the overdraft facility was there, should this happen.

I too rang the no. given on the letter, to be told I was unable to speak to anybody in person about this decision. I believed it was because I so rarely used the facility, that they were making no money out of it, so chose to withdraw it, but looking at the other posts, then this wouldn't follow everybody elses logic. I have just drafted my letter to the underwriters, but wonder if I am going to get a similar letter about my single current a/c (not been overdrawn in past 5 years, but has a £900 overdraft facilty), or my husband's a/c (very often used at the end of the month, £500 overdraft facility?) Would be helpful to know the criteria on which these decisions are being made really, wouldn't it?!

I am tempted to change all my accounts. Virgin Media are bad to deal with on the phone, but I believe Santander are the very worst company of all time (especially noticed the difference now I get through to them to deal with my A & L ISA), so would not be desperately unhappy to change all 4 of our accounts.

Can anyone suggest anyone who might be worth copying in on my letter of complaint? The chief executives office? Customer Care (!!) dept? Anyone who might be slightly interested in saving my custom?