Santander - Overdraft charges on statement when not overdrawn

wizzards

Having banked with Abbey before it became with Santander I have experienced the ups and downs of its customer service.

This month I have a statement where I have interest charges shown on the front of the statement for the 1st January 2011 to be debited on the 25th January 2011. It is quite clear to me that at NO time in the last two months have I been overdrawn. I rang them up and they said I'd have to WAIT untill they actually debit the charges before they can do anything. They admitted they couldn't explain why their computer had done this and that there was definitely no overdrawn point on my account. I am not one of these people that have someone elses statement this month so I am wondering if there is yet another flaw in abbeys systems. So I suggest everyone to check their statements even more closely this month. I think their service is terrible. They won't own a problem when you ring up. They suggest I should go to their branch or I should ring them up again. They say things like "I am terribly sorry and there is nothing I can do." Fortunately I found a freephone number for them on the web so they will be paying the call for chatting to me about their mistakes. :j Then I shall have to consider invoicing them for my time.

jonesMUFCforever

Have you withdrawn funds against uncleared cheques?
Although your account would not show as overdrawn it might be the answer.

wizzards

I don't have any cheques incoming for the last year only BGC credits which show as available balance when they are credited. The account shows on average between 400 and 800 credit since November. The fact that they agreed on the phone it was fault is good enough for me. I took the name of the agent and the date and time of the call so if debits appear I will refer to that. For sure it is a problem with the system. Before I make any online transaction for example I check the available balance which is the cleared balance and I print all transactions to paper or PDF so I have a record of everything I do.

stubbo

You're not the only one, this happend to my Santander account for three months in a row and was one of the reasons for me closing the account.

I called up everytime and was told it was a "known issue", however they did reverse the charges each time before they came out with very little fuss. It might be worth calling again and see if speaking to someone different will mean you can get this sorted?

Although it was only a few pence each time, its an inconvenience to have to call them, it probably ends up costing more to call them to get this rectified the amount they were going to charge in the first place. Very frustrating.

N3WLIFE

They took out over £30 from my account a couple days ago and I wasnt overdrawn!-Thanks to them, I am now!

YorkshireBoy

wizzards wrote: »

I don't have any cheques incoming for the last year only BGC credits which show as available balance when they are credited.

But do you have automated payments leaving the account the same day as the BGCs? If so, that could explain the problem.

I have a question for you...why are you happy to continue banking with them?

ERICS_MUM

I wonder if their system is charging interest for intra-day "overdrafts" ? For example if all debits are put through first (by their accounting system), the balance might show as overdrawn until the credits go on, which could be seconds later. Banks don't usually charge for any "overdraft" in this situation because clearly it is caused by their own processes and never actually shows in the available balance.

This could be happening if their interest system is programmed to base the calculation on the lowest balance during the day rather than the end of day balance after all debits and credits have hit the account.

sillysaver

This Happened to me also, (amongst many other problems) I was charged £2.50 for going overdrawn when i have been £500 in credit for 3 months or more, was told it was a computer error and would be refunded the £2.50, However it is very concerning a bank can make a mistake like this,

I wonder how many customers it has happened to on how many times it has gone undetected :exclamati

wizzards

I think this is the scenario I have. If you for example in the morning transfer money from an esaver account using online banking or telephone banking this shown as an immediately available balance both on the cash machine and to VISA debit transactions. If you then a little later make a purchase using visa debit it checks the account to see if there are funds which of course there are and reduces the available balance by that amount. Then 2-3 days later the VISA debit transaction is actually posted to the statement in the normal way. This means Santander must always be processing all debits in a day before they consider any credits.
In this case it would be totally wrong to charge say 4-5 pounds interest for borrowing money for say seconds or hours in a day when the transactions are clearly against a cleared balance as shown on a cash machine and online/telephone banking. This would explain why there are no other charges other than interest.

Clearly this is a faulty practice and could potentially rake in millions of pounds from unsuspecting customers if this proves to be the case. I have no idea what other banks do so I could not say if its common practice?
For an ordinary person it would be reasonable to expect transactions to be handled in the order they occur on the day that they occur especially if the account shows the balance as having both an actual and available balance that are the same and available for withdrawal. If the balance is not available then it should not indicate that it is either online or at an ATM.
All you will see on the front of the statement is a few pounds or pence on the front of the statement which will be debited the following month.

ERICS_MUM

wizzards wrote: »

I think this is the scenario I have. If you for example in the morning transfer money from an esaver account using online banking or telephone banking this shown as an immediately available balance both on the cash machine and to VISA debit transactions. If you then a little later make a purchase using visa debit it checks the account to see if there are funds which of course there are and reduces the available balance by that amount. Then 2-3 days later the VISA debit transaction is actually posted to the statement in the normal way. This means Santander must always be processing all debits in a day before they consider any credits.
In this case it would be totally wrong to charge say 4-5 pounds interest for borrowing money for say seconds or hours in a day when the transactions are clearly against a cleared balance as shown on a cash machine and online/telephone banking. This would explain why there are no other charges other than interest.

Clearly this is a faulty practice and could potentially rake in millions of pounds from unsuspecting customers if this proves to be the case. I have no idea what other banks do so I could not say if its common practice?
For an ordinary person it would be reasonable to expect transactions to be handled in the order they occur on the day that they occur especially if the account shows the balance as having both an actual and available balance that are the same and available for withdrawal. If the balance is not available then it should not indicate that it is either online or at an ATM.
All you will see on the front of the statement is a few pounds or pence on the front of the statement which will be debited the following month.

I can't think that any bank would do this (deliberately), as these "overdrafts" are not costing them (banks*) anything. I worked for a major bank for 35 years and was involved in calculating interest for personal, corporate and major banks, in sterling and other currencies and we never charged for intra-day.

As I said in my earlier post, I suspect Santander have set up their accounting/interest system incorrectly, possibly to base the interest on the day's lowest balance rather than the "end of day" balance.

* on the other hand, it may be that Santander are so strapped for liquidity to process their CHAPs payments that they themselves are actually are being charged intra-day interest which they are passing on to their customers. If this is what they are doing, it's completely unacceptable.

NB: these are my suspicions only, based on my banking experience. I have no insider knowledge (if only! kerching £££££££)

wizzards

YorkshireBoy wrote: »

But do you have automated payments leaving the account the same day as the BGCs? If so, that could explain the problem.

No I have no automated payments that would cause me to overdraw on the same day as a BGC. I keep an average credit balance of approx £600-800 hence this covers day to day expense from this account.
Regardless if the account shows an available balance which is the same as the actual balance then the cash should be available. The whole point of a BGC is that it doesn't take 3 days to clear like a cheque or thats the way I would understand it.

YorkshireBoy wrote: »

I have a question for you...why are you happy to continue banking with them?

To change bank is fraught with problems. I recently helped my mother switch to the co-op bank after many years with Sanatander. The main reason being that she finds Cash machines a little difficult at her age and withdrawing cash at the counter in Santander seems fraught with problems. With the good old Co-op Bank she can pop to the branch & post office and no problems.
To answer you question I am seriously thinking of changing. However like most people I started with Abbey when it was a building society and untill very recently have found things to be relatively good. Given the recent press reports about data protection and also these strange occurances on my own account I am losing confidence in Santander. However I will give them an opportunity to sort it and if its a one off I will stay but if I get more issues I will have to migrate.