Lloyds Bank's three month rule re 'inactive' accounts

Jenny05

Having wasted the morning on a series of extremely frustrating calls to Lloyds TSB, I’m just writing this by way of a warning to people who may not be aware of a rule regarding ‘inactivity’ on a bank account.

I would normally transfer money every month from my business account to my budget account (both with Lloyds) to pay all my usual household bills. However, in mid-November I actually deposited a larger sum of money into the budget account. Since then I have just been spending that money as usual without making my regular transfers as they were unnecessary.

The account remained in credit all this time – until yesterday when my normal mortgage payment went out by direct debit. This took me slightly overdrawn, but nowhere near my agreed overdraft limit.

As I check my accounts online daily, I noticed this morning that the direct debit to the mortgage company had been returned unpaid.

I’ve spent the best part of this morning trying to unravel this scenario. It transpires that – because I hadn’t put any further money into the account for three months and regardless of the fact that it remained in credit until yesterday and I have still not gone over my overdraft limit – the ‘system’ automatically rejects all payments until I make another deposit into the budget account. On top of that, I will be charged £10 for the returned item!

I was assured that the ‘three-month rule’ would have been mentioned in the terms and conditions section of documents relating to my account – I haven’t unearthed said documents yet.

I won’t go into detail about the somewhat tiresome exchanges I’ve had with Lloyds about this. I can understand that they need to protect themselves but a little flexibility surely wouldn’t go amiss with someone who has banked with them for over 30 years. I’ve just been landed with an unexpected charge – and the potential of a negative mark against my credit rating for defaulting on my mortgage – which I feel is unmerited.

This might be something which other people have covered before, so my apologies if it is! But be aware!

DrSyn

As you have been with them for over 30 years, suggest you write a formal letter of complaint to to the CEO of Lloyds at their head office. I most certainly would given the info in this post.

Ask for the return of any charges a reasonable amount for your waisted time, calls and frustration.

ironlady2022

That sounds like a nightmare. I would class an inactive account as no transactions at all (eg no DDs or income) within set period. This is very sneaky of them and a late payment on a mortgage can hit you very hard!!!! If you are thinking of remortgaging it's bad news really. Definitely complain!

Incyder

thanks very intresting.
I have a lloyds account but have no direct debits or standing orders so would never get to know this rule. 3 months does seem short. I guess putting a tenner in and drawing it straight back out the cashpoint 4 times a year is easy enough. I'll write it in my diary.

a&akay

I agree that something like this could be buried deep in the small print for any other account I've got, including small print changes made retrospectively. That's why I've got an SO set up from my main active bank account of £1 for each other account that I may want to keep active but don't use, eg for deals they may offer, thus reducing the 'new customer' paperwork problem for future attractive deals. I recycle the accruing small amount of money every few months to my active account.

jonesMUFCforever

I don't know anything about this ''rule''.
If you are in credit then there is no reason why your d/d's should not be paid. I would suggest going into a branch to speak to a bank manager to sort this out.

redlady_1

Having banked with Lloyds for over 20 years and been a good customer, never going over an overdraft limit, cards, insurance etc with them, they way they are increasing their charges is insane and their banking practices becoming more ruthless. Did you know the overdraft interest on a basic current account is higher than most credit cards?? Combine that with the £5 useage fee and I am about to pay it off and transfer elsewhere.

The fact that they have done this does not surprise me in the slightest.

iereboy

Three month rule?

Your accounts does not count as inactive after 3 months!

What about people who live abroad for 6 months and dont use their accounts and come back here to live? Their accounts are certainly not inactive?

Lloyds "like" you to put money into your current at least once every 3 months and they sometimes send you a letter telling you to do this especially if you live in your overdraft.

There is no underfunding fees like what some other banks charge.

Ring them to waiver the charge. They can especially if it is the first time you've had a returned item.

ironlady2022

I'm not surprised giving their dire situation. I'd be surprised if they will refund you back.

Biggles

I can't imagine there's any such 'rule', especially for an account with funds in it.

You need to talk to someone who knows what they're on about.

Though I have a nasty suspicion this is just a bit of trolling.

Jenny05

Thanks to all who have replied for your suggestions and support. This is the first time I've ever posted on any forum - I was just exasperated!

I've written my letter of complaint - and will probably do so again when I get the next statement with the charge on it - but I don't hold out much hope. I'll report back anyway.

The first two people at Lloyds that I spoke to about the problem were as baffled as I was - but then a 'manager' came on the line and her whole attitude was dismissive and patronising.

I'm now looking to swap accounts - it's something I've never considered before because I have four accounts with Lloyds plus their credit card and it seems so much hassle to change. Though I guess that what they rely on - people never changing accounts even though they are treated like dirt!