When does 15p equal to £65?

angel_islington

First things first. Santander are a rubbish bank and that's being polite. It's not my opinion, it's a fact. I wouldn't trust them to hold my you know what whilst I'm taking a wizz.

Secondly, this is 2011. There are so many way we can ensure that we don't go overdrawn. Personally, I have a text alert setup that tells me when I go under a certain amount. It's not exactly up to the minute but it's a useful guide. I can also check my balance on my phone and do so on a regular basis. Not to mention traditional internet banking, cash machines, telephone banking etc. All of these tools are at our disposal and more often than not, are free to use. It is our personal responsibility to manage our accounts correctly. That said, I am not exactly a saint in this regard but I like to think that I have learned from my mistakes. It is so much more hassle trying to get charges back etc than it is not going overdrawn in the first place.

However, and this IS a big point. £65 for going 15p overdrawn is a disgrace. You can say "you signed up for the terms and conditions" all you like but no bank can justify that. The financial ombudsman in their bank charges guidance say they will look at situations where the charges are unproportionally high. I think its fair to say this is the case here. They certainly wouldn't just tell you "it's fair because it says so in the terms and conditions".

dzug1

angel_islington wrote: »

However, and this IS a big point. £65 for going 15p overdrawn is a disgrace. You can say "you signed up for the terms and conditions" all you like but no bank can justify that. The financial ombudsman in their bank charges guidance say they will look at situations where the charges are unproportionally high. I think its fair to say this is the case here. They certainly wouldn't just tell you "it's fair because it says so in the terms and conditions".

But it's not £65 for going 15p overdrawn - it's for doing that AND doing nothing about it for however long it was

And you don't look at the £65 in isolation - it's considered in relation to the package of charges for the account, most of which are zero.

It might still be unfair - but it's not as clear cut as just looking at that one (OK multiple ones) charges

elvis86

On the whole, whilst I would be pretty p****d off if this happened to me (mainly with myself for making such a silly and costly mistake), I'm with a lot of other posters who have said that this is the OP's daughter's fault. The fact that the purchase of a Graze box sent her overdrawn is probably pretty inconsequential in the grand scheme, but it will make people have less sympathy than if she'd spent her last fiver on nappies for her baby..:cool:

I agree that we need to look at regulation of bank charges, because some are plain unfair (eg accumulative charges where a charge for going overdrawn is applied to an account, and this then triggers further penalties because a person's balance is now further overdrawn etc etc), but as others have said, we are very lucky to have free banking.

I'm certainly accutely aware that my bank can't make any money from operating my account whatsoever. I have no savings, mortgage or loans with them, just a current account which is always in credit (usually by just a few pounds by the time my wages are paid into it each month). I'm sure a lot of people are the same, and yet there are obviously costs to the bank for running our accounts (eg staffing branches, issuing statements/debit cards etc).

Unfortunately for the OP's daughter, the way our system works is that those who cannot manage their money responsibly partly subsidise free banking for the rest of us by way of charges. Personally however, I'm inclined to think this is a pretty fair system. The alternative would perhaps be for everyone to pay a monthly fee for their account, with no fees for going overdrawn etc, regardless of whether you're responsible or not?

At least the system we have now rewards people who are careful, and facilitates free banking for those of us who manage our money effectively. Some will no doubt bleat about "penalising the poor", but at the end of the day it's an indiscriminate system. It doesn't matter whether you earn £800 a month or £3000 a month, so long as you don't spend more than you earn the banking services are provided for free.;)

noodle

elvis86 wrote: »

At least the system we have now rewards people who are careful, and facilitates free banking for those of us who manage our money effectively.

I agree with, pretty much, everything you wrote. I have always likened it to speed cameras.. where I have no objection at all to penalising people who speed to provide a bit of a subsidy to people who don't.

However, if road and fuel taxes were abolished and the penalty for doing 80mph on the motorway was raised to £50,000, I'd think that was OTT. That's an extreme example, of course.. but, perhaps, so are some bank charges compared to the amounts of money involved.

It's also worth adding that banks to get to take all the money that those of us who don't go overdrawn have in our accounts and leverage it up to make big profits.

I understand that in the case of the OP's daughter it wasn't that she paid £65 to borrow 15p (anyone care to calculate the representative APR on that? it would put Wonga.com into perspective!), it was that she took advantage of an unauthorised overdraft facility, and there's a fee attached to that.

I like free banking, but if it is to be subsidised by people who incur charges then I want those charges to be fair and proportionate. Whether these charges are fair is a moot point, but I'd say that if it reaches a point where the only way to provide free banking to the rest of us is to levy unfair charges, then the system should be changed - even if that means an end to free banking. As it is, I think that the implied taxpayer guarantee over banks means that they owe us, and perhaps giving us free day-to-day banking is the least they can do (given the additional benefits they get from having our cash) and so where they do charge people, those charges must be a non-punitive assessment of the cost of the service provided, and not a vastly overstated amount that's pumped up to subsidise the rest of us.

ALIBOBSY

I think the fact that a bank think its ok to slap a load of charges on for just 15p is outragous. At that level it is more than likely a genuine miscalculation rather than recless "sticking it on the card". My bank allow a small 6 pound "miscalculation", without penalty.

ali x

vax2002

Santander tried this on me as well, when I demanded a full account statement (you are only give a summary via post) it transpired they had delayed application of funds to the account which meant money paid in did not show as balance, when faced with a county court claim they backed down an refunded. The same trick is widely used, they are sharkskin !!!!!! trying it on at fleecing people, close the account and bank elsewhere.

IrishGypsy

I do wonder sometimes if some people have selective reading abilities:

"As long as your daughter hasn't gone overdrawn again since this mishap a branch can waive all fees as long as this was the only instance in her statement period where she went under £10 OD."

All this arguing over the actual scenario (and not the discussion about the3 actual principle of it) is pointless as it's a moot point. I'd be interested in knowing how the OP's daughter has got on...

MichaelCR

Lokolo wrote: »

The charge is a fee so nothing related to the amount overdrawn by.

However if she is under 18 she cannot be charged an overdraft fee.

If she is 18 or over its an important lesson learnt.

The OFT States, That banks can only charge a charge to the customer that reflects the true loss incurred by the bank, I can certainly tell you going 15p overdrawn has not cost the bank £65.

I would tell them to remove it, I have reclaimed over £300 in bank charges through letters explaining my rights and the OFT's regulations.

If that doesn't work, Threaten them with the Financial Ombudsman service, This has always worked for me when placed in a letter.

I can provide the letter that i've used to clear the charges if that helps, It has never failed to work.

glider3560

MichaelCR wrote: »

The OFT States, That banks can only charge a charge to the customer that reflects the true loss incurred by the bank, I can certainly tell you going 15p overdrawn has not cost the bank £65.

But there are two charged involved here: the £25 one-time fee and then £5 per day. You could argue about the £25 fee, but the fiver is just an overdraft charge.

Lokolo

MichaelCR wrote: »

The OFT States, That banks can only charge a charge to the customer that reflects the true loss incurred by the bank, I can certainly tell you going 15p overdrawn has not cost the bank £65.

I would tell them to remove it, I have reclaimed over £300 in bank charges through letters explaining my rights and the OFT's regulations.

If that doesn't work, Threaten them with the Financial Ombudsman service, This has always worked for me when placed in a letter.

I can provide the letter that i've used to clear the charges if that helps, It has never failed to work.

This isn't the DFW board, we don't cosey up those that put themselves in debt because of overspending and not reading T&Cs.

If you read the rest of the thread a couple of Santander workers show that the charge is only charged when over £10, but the OP hasn't come back so I guess we'll never know what happened