Advice needed please

dancingdaisy

Clever people any chance of some help?

Basically my daughter has got herself in a mess with the bank, each time she has gone in to try and sort it she has been told not to stress and its not a lot etc, just pay £25 by 1st of month...she explains she can't and she just goes around in circles, then she gets phone calls from collections and they have a go at her.

I have gone in today and spoken to someone on her behalf, my daughter was with me and I told him that I expected the charges dropped and agreed to make the payment on her loan each month. It transpires that each time she has gone in some bright spark has just opened up another account for her, she now has 5 bank accounts!
She went in last week and explained her situation and they opened up a business account for her...absolute madness! One of the accounts is an account you have to pay to have...no money means they could not take the service charge, so more charges.
It is a right mess.

Anyway I told the lad that all accounts are to be closed except one and all charges were to be taken away...he spoke to the manager who agreed to take off pending charges (these charges are approx £100 a month!) I told him this was unnacceptable and I would deal directly with his manager, but he was too busy to talk to me so I have made an appointment to see him tomorrow.


Basically I need to know if employees of banks get bonus' for opening new accounts (so I can suggest staff retraining) also what the policy is on fair banking, surely they have a customer care charter to ensure that young kids who are in college don't get stuffed royally by banks. Also opening up a business account for a young girl who has only recently become self employed and earns approx £15 a day at the moment is a damned stupid move.

In those 5 accounts, one is an ISA opened a few years ago that now has 0 in it. 2 Bank accounts, one of which is O/D by £75 (all charges), a loan account with an O/D of £600, but with a £500 O/D limit (hence charges) and the business account with £0 in it.
It's all very well stopping pending charges, but she is still going to get charges on 2 accounts every month if £200 isn't paid into those accounts to clear them, and I cannot do that and she does not have enough money to pay them off within a month.

Thanks in advance for any advice given.
I hope I have made sense.

Jake'sGran

Can't your daughter use the Internet? I realise that she may not own a computer. If you are going to sort this out for her maybe you could manage her banking. This wouldn't be ideal but you could keep an eye on things until she is confident enough to deal with this horrible bank or change to another. I just can't believe the way they treat customers.

In these circumstances I would go through their official complaints procedure and if the bank refuses compensation you can then go to the Financial Ombudsman.

opinions4u

Is your daughter over 18?

Why does she keep agreeing to open new accounts?

Why did she choose to get in to debt?

What does she have to show for the debts accrued?

Before turning it all on to the bank, work out what part your daughter has played in creating her own financial mess.

I need to know if employees of banks get bonus' for opening new accounts

Some do. Some don't.

surely they have a customer care charter to ensure that young kids who are in college don't get stuffed royally by banks

Accounts have terms and conditions which contract adults and banks accordingly. I would make sure your daughter begins to understand exactly what she has, how best to use the facilities and how pointless debt for pointless purchases is, well, pointless and damaging.

dancingdaisy

Thank you for your replies.
My daughter realises that she has got herself into a pointless mess BUT haven't most people at some point? you only have to see the amount of people who post on here regarding their own financial mis-management, I know I have!
My daughter is learning a valuable lesson from this, why do you think I am not paying it off for her? I am trying to help her in other ways.

She agreed to the opening of various accounts as she was advised to by the bank when she turned to them for help, all of these accounts are with the same bank. Hence my looking for advice so I can help her. I don't want to go into the meeting with the bank manager tomorrow without having the necessary knowledge in order to resolve this.
As far as I am concerned this is NOT responsible lending/banking.
Who on earth would give a student with no income extra bank accounts that have a charge for the use of? It beggars belief.

I am in no way, shape or form trying to get my daughter out of this, she got herself in debt...BUT I do believe that the bank should be held accountable for charging her £100 a month in bank charges for accounts that were not explained to her correctly and she agreed to because she was just following their advice.
I now have a 20 year old daughter on anti depressants who cannot stop crying. Now to some of us £600 in debt is a small drop in the ocean, my student debt alone is still astronomical... but to her this is massive and she is unable to cope.
Hardly fair banking is it.

Sorry, I am ranting on, but I just think it is unfair that she asked for help and has, IMO, been given terrible advice by a financial institution who appear to be unwilling to do anything other than offer her yet more bank accounts.

Ooops sorry in my rant I forgot to explain how she got herself in debt.
She decided to go back to college and then lost her job and a DD went out and she got bank charges...she stupidly didn't sort this for ages and her charges became approx £400 in a very short time, she then went to the bank and they gave her a loan to cover the charges and bank account no3, a loan to a jobless person...she of course didn't pay the loan repayments and rather than talk to me about it buried her head in the sand and here we are today. All of this started with a DD to a mobile phone company for a monthly charge. So she is qalso in trouble with the mobile phone company as well.

SocrateS_2

After you've found out what part your daughter has played in this process you may like to know that according to BBC R4 'MoneyBox' a couple of weeks ago they pointed out how Banks get away with this. As a consequence of everyone going to court against the banks they 'updated' their fees.

As a consequence, you can now open an account, fall foul of some 'fee' or other and consequently have that fee carried over to the next month, as the owner of the account hadn't paid the fee off, they take it from an overdraft, of course if you've not got an 'authorised overdraft' they charge you a punitive charge as punishment and so you end up with 3 charges on your account all accrued due to 'charges'. Or as they were pointed out on R4 as the following:

£1 for each day that they go more than £10 overdrawn and £2 if they’re overdrawn by more than £2,500. If they stray into unauthorised overdraft territory, they’re charged £5 each day. The latest to bring in changes now is Lloyds. For the first time customers will have to pay £5 each month they go overdrawn on top of interest. Unauthorised overdrafts will cost a maximum of £85 a month, which is less than the £200 a month which can be charged at the moment

meanwhile Natwest RBS this year

February its customers will be charged £6 a day for any unauthorised overdraft of more than £6 and that’s subject to a cap of £60 a month. Arranged overdrafts remain unchanged. Interest is charged on the amount you’re in debit

Well unauthorised overdrafts are the most expensive. If you get into one of those, fees and charges can make it hard to get out again, so we’ve compared the costs of having an unauthorised overdraft with the main high street banks. The 2Office of Fair Trading requires banks to publish the cost of six scenarios a customer going into an unauthorised overdraft might face from the cost of the bank refusing a payment because there isn’t enough money in your account to the cost of using your overdraft for 21 days in a row and making twelve payments while overdrawn. So we’ve added the cost of these six scenarios together for typical current accounts. Halifax comes out as the cheapest with Barclays and RBS not far behind. At the other end of the scale is HSBC and the Co-op.

You can read the rest of the program here: http://news.bbc.co.uk/1/shared/spl/hi/programmes/money_box/transcripts/money_box_27_nov_2010.pdf

In a subsequent program they suggested that You can report the situation to the bank and they'll usually remove the charges, if not then you should complain to the bank in WRITING and then if the charges aren't removed you should follow up with a letter informing them you're enlisting the assistance of the FSA\Banking Ombudsman who should do something as it seems to be a situation where the bank is making the mistake and failing multiple occasions to handle the situation properly. There's also some kind of 'charter' the banks have to adhere too, this fundamentally means they're not supposed to do anything to the detriment of the customer. I can't find the link to it, so perhaps the following websites maybe able to assist:

http://www.nationaldebtline.co.uk/
http://www.cccs.co.uk/
https://www.citizensadvice.org.uk/
http://www.adviceuk.org.uk/home
http://www.payplan.com/

I am certain one of them will be of assistance. Sorry I can't find the 'charter' information, but hopefully one of the websites shall provide some information that maybe relevant.

HTH

dancingdaisy

Thank you so much for your help Socrates, a million thanks.
I do feel that the bank has failed my daughter on numerous occasions.
Yes, burying her head in the sand was a stupid thing to do but the effect of this will stay with her forever. She has gone from being a bubbly teenager into a depressed mess, and that is horrible to witness. It took ages to get it out of her and now I want to help, so I truly appreciate your help.
I am loathe to call in an ombudsman as it is her silly behaviour which has caused this, yes the charges I believe are unfair and yes I do think that they have a responsibility to look after their customers, but it would not have gone as far as this if she had spoken to me about it in the first place. A hard lesson learnt methinks.

After insisting on a meeting with the bank manager, as I said I want to go in armed with all of the facts, make a case for her and hopefully the bank will see sense on this matter and she pays off the debt with my help and I get my happy daughter back.

YorkshireBoy

dancingdaisy wrote: »

...she then went to the bank and they gave her a loan to cover the charges...a loan to a jobless person...

Take this the right way, but (and especially with you wanting to be prepared for the meeting tomorrow) did she enter "jobless" or something similar on the application form? Have you seen her copy of the form? Might be an idea to do so before the meeting?

Unless it was a 'managed loan'?...which I understand is often given to replace the overdraft where it cannot be repaid on demand.

dancingdaisy

YorkshireBoy wrote: »

Take this the right way, but (and especially with you wanting to be prepared for the meeting tomorrow) did she enter "jobless" or something similar on the application form? Have you seen her copy of the form? Might be an idea to do so before the meeting?

Unless it was a 'managed loan'?...which I understand is often given to replace the overdraft where it cannot be repaid on demand.

Taken totally the right way
Yes she told them that she was jobless, her employees weren't happy to re-arrange her shifts when she went back to college full time, they were having to make staff redundant at the time and any changes to the shift patterns would have caused them problems, so when she approached the bank she went in as a student and explained the situation to them. She was only getting £30 a week EMA & the bank offered her the other bank account to have her EMA paid into and a loan to cover the charges, repayable at £26 a month. There were then problems with the EMA payments, plus the fact that she was a teenager and stupidly thought that £30 was a night out She eventually got to the point where every EMA payment was taken up with bank charges... vicious circle...
I have supported her financially for the last 18 months now.

On the plus side, once this has been sorted out then she can get on the right track again and start paying off her debts and paying me housekeeping!

Nothanks

Please don't be insulted by this, but before you go i'd have a chat with your daughter about anything she hasn't mentioned in full about her interviews in branch. While banks DO take the mickey, and sell whatever they can (It's a sales job after all) the kind of mis-selling you're describing is rare. In my own experience, when dealing with similar complaints there are often discrepancies between what the customer tells the bank and what they tell their defensive parent.

The fee-paying account: A complaint i hear regularly is "how could the bank let me have a fee paying account, i'm a student/unemployed/whatever" i take issue with this because the account is designed to save you money, and unless the seller is selling illegally, they have to provide features & benefits and these CAN help people on low or no income. For example, if you were paying £15 a month to insure your iphone, and a packaged account at 12.95 does the same job, then you've saved £2 every month and the account is worth it. The bank has a duty of care to offer this to every customer as a service not just to customers who look like they can afford it.

The loan: as another poster said, unless it's managed i have no idea how any seller could get a loan signed off with
No income listed. Very odd.

Business account: equally odd. Also, a lot of banks offer the first years banking free to start-ups. If she's not using the account they shouldn't be charging.

As i said, please don't take this as attacking your post or your daughter, when i was her age i made some foolish decisions at the bank too, and i've also battled depression so can truly sympathise, but if everything is exactly as you describe, your daughter has run into the dodgiest seller i've ever come across. The bank should be able to provide paperwork of all the account opening forms, especially the fee-paying account. They should also be able to provide a key facts document that dictates whether their selling is advice or non- advice. There is a chance, if your daughter has signed a form agreeing that the service she received was non-advice, then the "they advised me" line of defence will be difficult to prove.

If you pm me what bank it is, i can ask a comrade from that bank more about their processes if it would be any help, and good luck!
Either

dancingdaisy

Thank you for your advice, again no offence taken at all
I have sent you a PM.

Nothanks

Replied.

I'm also a bit baffled how a branch seller is getting anything opened at all if the account is with a collections team. A lot of banks stop any branch selling when an account is under the heavy mob.

Very curious...