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Santander - Increase in Under Funding Fee?
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kirklean
Posts: 30 Forumite
Mornng,
I have in the last few months moved my Current Account over to HBoS and I am paying my overdraft off in Santander (ex A&L account) gradually.
I have 2 current accounts with them that are in overdraft and had been paying in £100 a month to steadily bring them towards credit and close the accounts.
Because the Ts and Cs of the account were that you had to pay in £1000 a month, I was getting a £5 under funding charge applied to both accounts. This was fair I guess given that I knowingly was under funding the account. Trouble is, logged in to the online banking this morning and noticed in the pending charges that this has been increased to £10 per month under funding fee. I have not been notified of this, which I would have thought was a fairly major change to their Ts and Cs. It now means that it is going to take much longer too to clear off the overdrafts at the current amount I pay in. That is 100% increase in a fee. I see this as totally unfair to just apply this new level of charges without informing their customers first.
I have in the last few months moved my Current Account over to HBoS and I am paying my overdraft off in Santander (ex A&L account) gradually.
I have 2 current accounts with them that are in overdraft and had been paying in £100 a month to steadily bring them towards credit and close the accounts.
Because the Ts and Cs of the account were that you had to pay in £1000 a month, I was getting a £5 under funding charge applied to both accounts. This was fair I guess given that I knowingly was under funding the account. Trouble is, logged in to the online banking this morning and noticed in the pending charges that this has been increased to £10 per month under funding fee. I have not been notified of this, which I would have thought was a fairly major change to their Ts and Cs. It now means that it is going to take much longer too to clear off the overdrafts at the current amount I pay in. That is 100% increase in a fee. I see this as totally unfair to just apply this new level of charges without informing their customers first.
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Comments
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Are you sure it's an underfunding fee?
As far as I know that's not been increased, but what has changed very recently is the cap on the 'daily arranged overdraft fee' of 50p. The cap is now 20 days per month, rather than 10 days per month, so maybe that's where your £10 pending charge comes from.
If that's the case, expect another £5 fee on top for underfunding the account.
http://www.santander.co.uk/csgs/StaticBS?blobcol=urldata&blobheader=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1223412341387&cachecontrol=immediate&ssbinary=true&maxage=3600 (page 11)0 -
I've always taken £5 overdraft fee into account (it was 50p per day capped per month at £5). The charge definately states Under Funding Fee £10.00 and an additional line of Overdraft Useage Fee £5.00.
I'm going to call them later.0 -
I had a bank account with Abbey which is now with Santander. I just received a statement with a £10 daily overdraft fee on it. I had an overdraft on the account, the interest rate on which was 18%. I have now been informed that they are going to charge 50p a day flat fee with a maximum of 20 days being £10 pm, with no interest charges.
This may appear to be an easier and more transparent way of charging, but as I said to the adviser I spoke to, you need to have a balance of more than £666 in overdraft for £10 pm to equate to 18% pa or 1.5% pm. Any less and you are paying more than the interest they used to charge on the old overdraft interest.
If for example you regularly run into overdraft say by £200 pm for the last 20 days of the month, then the £10 fee they charge is 5% pm or 60% pa!!. Alternatively if you have an overdraft of £2,000 for the full 30 days in the month then again the charge is £10, which equates to 0.5% pm of 12% pa. I do not understand how they are allowed to charge the same fee to someone who owes £200 as that that is charged to someone owing £2,000. I rang and queried this and was informed that the "majority" of their customers had asked for this change to take place.
I also suspect that eventually they will charge the flat fee and then re-introduce interest charges as an addition.
If you, like me, feel that this charging structure is unfair to those with smaller overdrafts then can you please contact Santander as they appear to think that everyone is happy to pay more.0 -
I take it again, they never advised you of this change? Should they not advise their customers to a change of this sort? Quicker this overdraft is paid off the better.0
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