Bank charges "dressed up" as facility fees.

MDE

Hi
I bank with First Direct, and in July 2011 went over my agreed overdraft by an amount less than £2, for less than 24 hours. This should have incurred a fee, but First Direct cancelled this as a good will gesture- although never actually told me that the fee had been incurred or cancelled, as it never appeared on my statement.
I have today had £25 removed from my account, by FD, by way of payment for the renewal of my overdraft facility. This is the first time they have ever charged me this, and having queried it with them, they have told me that it is because I exceeded the overdraft limit within the last 6 months, which means I am no longer entitled to the fee free overdraft facility. (Note, it's not interest free, so they are making money from me on any overdraft I incur).
To my way of thinking, this is a penalty charge for exceeding the overdraft, although it is dressed up an an overdraft facility fee. A customer who did not exceed their overdraft wouldnot be charged the fee, so it is directly linked to my exceeding the overdraft limit. It is a fee of £25 for exceeding my overdraft by less that £2 for less than 24 hours!
I have queried this with FD, but if they say no to a refund, are there any other options available to me?
Thanks....

dunstonh

To my way of thinking, this is a penalty charge for exceeding the overdraft

You thinking is wrong. It is a charge for a facility on the account as part of their published terms and conditions.

A customer who did not exceed their overdraft wouldnot be charged the fee, so it is directly linked to my exceeding the overdraft limit.

Someone has to pay for the staff member that is required to look at your account because you chose to exceed your agreed facility.

are there any other options available to me?

Not nowadays. Most banks refund on your first error but this is your second error. The charge is within their published t&c. So, no wrong doing has taken place by them.

MDE

Not nowadays. Most banks refund on your first error but this is your second error. The charge is within their published t&c. So, no wrong doing has taken place by them.

How is this my second error please? I went over my agreed limit once, for which a charge was supposedly levied but then cancelled as a goodwill gesture. The facility fee I am now being asked to pay for the overdraft is as a direct result of my going over the limit on that one occasion- there haven't been any other occasions!

noh

You are right in saying that this is not your second error.
The first and only error you made was exceeding your overdraft facility back in July.
First direct do not charge for the first formal or informal overdraft request within a six month period. That is why you were not charged in July.
You were charged £25 for renewing your formal overdraft because you had made an informal request in the previous six months.

As dunstonh says it is not a penalty fee it is a charge for the provision of a service and as such is currently lawful.
Not much you can do except ask FD nicely to waive the fee.

MonkeyMad

Seems that you were free enough to refuse to renew your facility when it came around (which isn't something the bank has to give you for free). You are not being charged for you previous borrowing, you are being charged for your future borrowing. This isn't being dressed up as a bank charge in the sense you are thinking at all. You want to be able to have the ability to borrow money and they are going to ask to you pay up front for it which is an entirely reasonable business practice. They have knowledge of previous unauthorised borrowing which represents a risk and that has to be paid for. In the same way I would expect people with poor credit ratings to pay a premium to borrow money.

Have you tried telling them you don't want to renew your authorised overdraft facility and would like to have your money back?