Sudden overdraft removal - please advice!

laurajane81

Hi

Towards the end of last year I realised that I was no longer able to make all the repayments I had on various loans and credit cards. I contacted a debt management company, who when through my income and outgoings and put a debit management plan in place.

I had had my current account with Barclays for the past 13 or so years, but as I owed them money both in the form of an overdraft and Barclaycard, I was advised to switch my current account to a different provider. My overdraft limit with Barclays was £2200, which it had been for a number of years and I owed £1820 on this.

All the agreements where in place with all over creditors expect for my overdraft. Barclays never replied to the original paperwork and offer of repayment. My debt management company therefore resent the paperwork and offer of repayment to them on the 2nd September. They then declined the repayment proposal.

On the 9th September I received a letter from Barclays (dated the 7th September) stated that I was over my £10 agreed overdraft limit and that they were therefore going to charge me £22 every 5 business days until this was repaid. They never contacted

I spoke to them on the phone on the 9th September and they told me that they had the right to reduce my overdraft at any stage and a letter had gone out that day to that effect.

They hadn’t contacted me at all, all year and the only money going into the account was that that the debt management company had been paying them. This was all fine until they received the paperwork about the debt management plan.

I don’t know what to do. Obviously as I am on a debt management plan I do not have this kind of money laying around. Neither can I borrow it from other sources. I am shocked by Barclays decision especially as they are aware of my circumstances.

Please can you advise me on what I can do? Can a bank just change your overdraft overnight without notice and start changing an additional £22 a week?


Many thanks
[EMAIL="complaint.info@financial-ombudsman.org.uk"][/EMAIL]

Fiddlestick

laurajane81 wrote: »

Please can you advise me on what I can do? Can a bank just change your overdraft overnight without notice and start changing an additional £22 a week?

Yes - overdrafts are repayable on demand.

However, they also have an obligation to treat customers fairly. If you were trying to get in touch with them to negotiate a repayment structure and they were ignoring your attempts, suddenly canceling the overdraft and putting you into a position where you will be charged doesn't really strike me as fair.

Have you asked them to put you into a repayment plan since this happened?

CLAPTON

which debt management company are you using?

laurajane81

It's with Payplan. They have sent them statement of income and outgoings and a repayment plan twice, to which they are first did not reply and later declined.

onlypaddy

As an aside - you are currently paying for a debt management plan that you can implement yourself for free. Ask on the debt free wannabe board for details I think...

Mark_In_Hampshire

I thought PayPlan was free.

The overdraft ought really to have been put into the debt management plan in the first place, so the payments you're making ought to be going towards repaying that.

If the account was your primary one, it would be tempting to think that the lower limit of the account is the OD limit and that it doesn't (strictly speaking) need repaying, at least, not now.

However since it now does, I'd contact PayPlan and get it added in.

And get yourself a basic bank account elsewhere to make the payments from.

This doesn't help you in the immediate short term (the loss of that credit facility) but it's not surprising it has been withdrawn in this circumstance, and as others have said, the bank is perfectly entitled to do so, although a little prior notice first wouldn't go amiss.

laurajane81

Hi Payplan is free.
I had put Barclays on there in the first instance - they have been getting repayments from them since Dec 09, it was only when I realised the set up with them said 'pending' still, that Payplan resent the paperwork.

It wasn't so much the removal of the credit facility - if they had reduced the overdraft down to what I owed it wouldn't have been an issue, but demanding instant repayment of the money whilst they know you are in a DMP I found very shocking, especially as there was no notice at all. In fact the first I know was when they sent me a charge notice for being over my reserve.

laurajane81

The notification of a repayment plan was what made them do it, without any notice - just a demand for full repayment.

onlypaddy

My bad, didn't know it was PayPlan. You just mentioned a debt management company

davidgmmafan

laurajane81 wrote: »

The notification of a repayment plan was what made them do it, without any notice - just a demand for full repayment.

Welcome to the sympathetic world of banking. Person gets expert advice, for free, and sets up a payment arrangement they can afford when things get tough.

Bank notices person is struggling and so issues a deman for immediate payment. I have no idea where these people are who they believe would have a DMP setup and yet have vast sums of money laid around to clear and OD in full. Idiots.