Legitimate claim?

LittleTinkTink

Hi everyone, before I go ahead and try to claim some charges back I thought I'd run it past you all first. At the start of this year I made a purchase on-line using my debit card which came to £40. The payment was taken and everything was fine, or so I thought. I went to the bank the next day to get some money and I had insufficient funds so I checked my balance and I was -£37. I wasn't able to clear the balance until pay day but by that time I had a slew of charges thrown on to my account. I would like to know why my bank wouldn't just reject the payment I made on-line as it was clear I didn't have enough money. If they won't give me an overdraft but then allow me to go overdrawn anyway at a MUCH higher rate, isn't this a bit unfair? Would I be able to claim these charges back?

dunstonh

I would like to know why my bank wouldn't just reject the payment I made on-line as it was clear I didn't have enough money.

If it was below the floor limit for checking the balance the bank could not reject it. Or if your account wasnt marked with a strictly no overdrafts (i.e. a zero strict limit or similar depending on your bank).

they won't give me an overdraft but then allow me to go overdrawn anyway at a MUCH higher rate, isn't this a bit unfair?

It is not for the bank to monitor and control your spending. If you leave it to the bank then you will incur charges for your lack of responsibility.

Would I be able to claim these charges back?

You can ask them. If its your first error then the banks will often refund. If you have a history of taking their money without consent then they will likely say no.

Technically, you have no grounds for complaint as its all your fault.

LittleTinkTink

I appreciate you taking the time to help me out but I do disagree with you. If I am not allowed an overdraft and attempted to make a payment of £40 with £3 in my account then the payment should have been rejected. The fact that the bank had refused me an overdraft but let me go overdrawn anyway is stupid. If they didn't believe I could pay back an overdraft on a lower rate of interest why would they give an unauthorised overdraft with charges that are way higher than a usual overdraft. It doesn't make any sense. The payment attempt should have been rejected on the spot. I know I am in control of my spending but I also know that if I don't have enough money in my account, I cannot buy anything as I do not have an overdraft facility. Never have.

Again, thanks for taking the time to answer anyway.

I see now, your almost one of them : )
Explains the motives behind the answer.

dunstonh

If I am not allowed an overdraft and attempted to make a payment of £40 with £3 in my account then the payment should have been rejected.

Why do you think that? (you are wrong anyway).

The fact that the bank had refused me an overdraft but let me go overdrawn anyway is stupid.

The bank didnt let you. You used your card and the retailer used a method that didnt check for available funds (floor limit most likely reason)

If they didn't believe I could pay back an overdraft on a lower rate of interest why would they give an unauthorised overdraft with charges that are way higher than a usual overdraft.

Again, they didnt let you. You abused the facility you were given.

The payment attempt should have been rejected on the spot.

That isnt how it works. You are not a child. You have a responsibility to know what you have to spend. Certain transactions will be checked against available funds but not all will be.

I see now, your almost one of them : )
Explains the motives behind the answer.

Stop being so silly. An IFA is a competitor to the banks in retail terms but in this area there is no overlap at all.

LittleTinkTink

I'm not being childish by any means. You have to play by the same rules as a bank therefore you can't really factor in 'fairness'. Any rational person can see what I mean and realise that the bank has acted unfairly by refusing me an overdraft on the grounds that I can't pay it back and then charging me more in month than an overdraft would have. I didn't have any 'facility' that I abused, if anything it is a trap for people like me who believe that if you don't have the money, the bank will refuse the payment and the fact you perpetuate the opinion that 'it's all your fault' shows that you are in fact taking the stance a bank would. The bank are protecting their own interests, you are simply enabling them by backing up their unfairness and therefore you yourself are part of the problem. My account has always been based on; if I don't have it, I can't spend it. The way my bank accounts are usually run. I've had payments rejected from the same place for lack of funds, and not a big lack of funds, we're talking £'s off what the total was. I wouldn't think it was weird that I was allowed to go overdrawn using my debit card otherwise.

dunstonh

You have to play by the same rules as a bank therefore you can't really factor in 'fairness'.

No I dont. I am an IFA not a bank.

Any rational person can see what I mean and realise that the bank has acted unfairly by refusing me an overdraft on the grounds that I can't pay it back and then charging me more in month than an overdraft would have.

Any rational person can see that they refused to lend you their money but you went out and took it without permission anyway.

I didn't have any 'facility' that I abused

You used the card that the bank trusted you with to use sensibly.

if anything it is a trap for people like me who believe that if you don't have the money, the bank will refuse the payment

ignorance is no excuse.

the fact you perpetuate the opinion that 'it's all your fault' shows that you are in fact taking the stance a bank would.

I am taking the stance as its logical and common sense and I can see exactly how it happened. You are just ignoring the facts the truth because you dont like it.

The bank are protecting their own interests, you are simply enabling them by backing up their unfairness and therefore you yourself are part of the problem.

Of course the bank are protecting their own interests. You took money from them without permission. They are not going to allow you to do that without recovering their costs.

My account has always been based on; if I don't have it, I can't spend it.

Not in the eyes of the bank it hasnt. debit card transactions have never been that way.

I've had payments rejected from the same place for lack of funds, and not a big lack of funds, we're talking £'s off what the total was.

Floor limits vary. Cleared/uncleared funds may not be up to date, transactions due to go through are not yet earmarked against your cleared funds balance.

LittleTinkTink

"No I dont. I am an IFA not a bank."

Advice you give must be within the rules of financial law, you can't give advice that breaks the rules. Bank are also bound to the law.


"Any rational person can see that they refused to lend you their money but you went out and took it without permission anyway."

You are implying that I managed to steal from a bank simply by using my debit card. I wish it was that easy.


"You used the card that the bank trusted you with to use sensibly."

I would agree if we were talking about a credit card but we are not. A debit card gives you access to your own banked funds so the only person who suffers from poor spending is you, not the bank.


"ignorance is no excuse."
It's not my job to know the fine details about the banking system, if it were I would be working in one. No overdraft implies you cannot exceed your balance and will not be allowed to exceed your balance, any regular customer would assume this and should have no reason not to think so when using their debit card.

"I am taking the stance as its logical and common sense and I can see exactly how it happened. You are just ignoring the facts the truth because you dont like it."

Obviously I don't like it, it is unfair to trap people. I imagine you think I called the bank, they refused an overdraft and I then hatched a devious plan to rob them with my debit card. I requested an overdraft months before being allowed to go overdrawn so whatever evil scheme you think I concocted, you are mistaken.


"Of course the bank are protecting their own interests. You took money from them without permission. They are not going to allow you to do that without recovering their costs."

Banks are not easily robbed. You seem to be under the impression that my debit card gives me direct access to the banks money regardless of my own balance. The way you say it makes it seem like every person with a debit card can spend money regardless of their balance but they do not do it because the bank do not give them the permission.


"Not in the eyes of the bank it hasnt. debit card transactions have never been that way."

It is the fault of the bank for not doing their job properly. They allow people to overdrawn because it results in bigger fees than an authorised overdraft. When I have a debit card I only expect to be able to spend what I have deposited and if I try and spend more I will not be allowed to. If I can go over my limit without asking the bank for an overdraft then this implies that I do technically have an overdraft at my disposal so therefore I should not pay inflated fees for the service.


"Floor limits vary. Cleared/uncleared funds may not be up to date, transactions due to go through are not yet earmarked against your cleared funds balance."

When using a Visa debit card floor limits shouldn't even come in to play unless there is a problem with the vendors terminal or connection to the bank. The bank do not disclose floor limits so even though they are trying to prevent fraud they are in fact creating another trap for people who make mistakes with their money and then they punish them for it.

I really do appreciate your input as you clearly know your stuff but you have failed to convince me it is all my fault.

noh

"ignorance is no excuse."
It's not my job to know the fine details about the banking system, if it were I would be working in one. No overdraft implies you cannot exceed your balance and will not be allowed to exceed your balance, any regular customer would assume this and should have no reason not to think so when using their debit card.

It certainly is your responsibility to read and understand the agreement you entered into when you opened the account.
If you care to read that you will see you have what is called an informal or unarranged overdraft facility available to you. It is at the banks discretion if they pay amounts requested. A request to use this facility was made when you offered your card for the purchase when you had insufficient funds in the account.

If you tell us the bank and type of account involved I will attempt to find the relevant T+Cs for you on their web site.

jamesd

When you make a formal request for an overdraft the bank considers whether it's willing to lend you money. It may decide no.

When you have made a promise to pay another party the bank is placed in a difficult position by you. It knows you've promised to pay and it knows that it didn't want to lend you money. For modest amounts of money the bank may choose to let you keep your word. Or it may have no choice because of the terms of the card scheme and a lack of check due to the value of the transaction. Whichever applies, it's really your job not to make an undertaking to pay that you can't honour. The bank may help you to keep your word but you shouldn't rely on it.

It is possible to get cards that don't work if it's not possible to check and confirm that there is sufficient money in your account. You might ask your bank to issue you one of those if you really want some transactions rejected just because of temporary glitches in the links between machines and banks.

If you dislike the way your current bank handled this do remember that you can have more than one current account and it's usually not that hard to gradually switch banks.

If you apologise for your mistake and ask the bank not to make the charges on this one time they may agree. Or not, it's up to them. They are entitled to the money but in the interests of customer good will they will often choose to refund the first time.

Hanky_Panky

LittleTinkTink wrote: »

"I really do appreciate your input as you clearly know your stuff but you have failed to convince me it is all my fault.

I don't like using the word 'fault' as it is too emotive in these circumstances. Substitue 'responsibility' instead.

You may not like what dunstonh has written but he is spot on. It is absolutely your responsibility to ensure you have sufficient funds in your account before agreeing any payments either via debit card or cheque - I believe in France it is actually a criminal offense to write cheques without there being sufficient funds in your account. Not so draconian here but you get the picture.

Please take heed before you incur the charges again.

LittleTinkTink

Where to start?

The bank I was using was Lloyds TSB Classic account. I can't find the terms and conditions myself but at the time it was taken out I was 16 so terms and conditions didn't even enter my mind.

Cheques are a far different matter. Cheques are a promise to pay, debit cards have a direct line to your bank (the chip and pin terminal) which tell the vendor that the transaction is good to go or not. No funds = no sale. As much as I hate to quote wikipedia:

"Floor limits do not apply to certain types of debit card (such as Visa Electron and Solo), as these cards require authorisation for every transaction to prevent the cardholder becoming overdrawn."

This means that the bank had the request from the vendor and okayed the transaction despite a lack of funds. They shouldn't have allowed it at all. That is my point.