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LLOYDS TSB - Planned Overdraft charges
mcpaderson
Posts: 17 Forumite
Hi there,
I am writing as I am very disappointed with Lloyds Tsb and their overdraft fees.
I do not rely on my overdraft and only have it as a precaution, having put most of my savings into our house we recently bought and also as an extra protection to ensure I meet all mortgage payments.
Moreover, I only have the overdraft as a Lloyds Tsb advisor recommended that I have it as there were no fees if I needed to rely on it and I would only pay interest.
HOWEVER, as you may know, they have changed their policy (about a year ago) and if you go into your PLANNED overdraft, they automatically charge you £5, even if this is for one day, in addition to interest.
As someone who only goes into my overdraft by accident, and moves the money out of saving to correct the balance when this happens, I am very unhappy about paying £5 given that the overdraft is PLANNED and I always replace the money as soon as I have realised.
I spoke with Lloyds Tsb on the phone and the advisor's approach was... well we can change our terms when we like and we send the terms and conditions out to customers when whenever we do. He also said he cannot do anything about the fees I have already been charged and cannot stop any future fees, even if this meant losing a customer of 20+ years.
No surprise they have been struggling recently.
Has anyone had experience with this and been able to reclaim any of these charges?
I am writing as I am very disappointed with Lloyds Tsb and their overdraft fees.
I do not rely on my overdraft and only have it as a precaution, having put most of my savings into our house we recently bought and also as an extra protection to ensure I meet all mortgage payments.
Moreover, I only have the overdraft as a Lloyds Tsb advisor recommended that I have it as there were no fees if I needed to rely on it and I would only pay interest.
HOWEVER, as you may know, they have changed their policy (about a year ago) and if you go into your PLANNED overdraft, they automatically charge you £5, even if this is for one day, in addition to interest.
As someone who only goes into my overdraft by accident, and moves the money out of saving to correct the balance when this happens, I am very unhappy about paying £5 given that the overdraft is PLANNED and I always replace the money as soon as I have realised.
I spoke with Lloyds Tsb on the phone and the advisor's approach was... well we can change our terms when we like and we send the terms and conditions out to customers when whenever we do. He also said he cannot do anything about the fees I have already been charged and cannot stop any future fees, even if this meant losing a customer of 20+ years.
No surprise they have been struggling recently.
Has anyone had experience with this and been able to reclaim any of these charges?
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Comments
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Has anyone had experience with this and been able to reclaim any of these charges?
The new style charges are generally considered to be fairer in the eyes of the law. Untested but seeing as the banks won their previous court case on the old charging methods, you dont see anyone testing the new methods any time soon.
It is a free market. If you dont like the charges that Lloyds make then take your banking elsewhere.
Timescale with the bank is no indication of your profitability as a customer. I have just told an IFA to dump a client who "he has looked after for 25 years" (his words) as it was unprofitable and looking after wasnt what he was doing. He was wasting half a day every 6 months having a cup of tea and a biscuit without being paid for doing it. For about 15 years now, Lloyds have had the ability in branch to tell the profitability of an account to them. If you were that profitable they would look to keep you.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
@dunstonh
I may well go elsewhere - the real issue here is what is the justification for charging customers £5 PER DAY for using a PLANNED overdraft. They never used to! They also 'sold' me the product on the basis that there were no such fees.
I note that you are a financial advisor. I do not think customers want advice purely motivated by profitability to financial houses/advisors. Especially not when certain financial houses have been bailed out with tax payers money.
If you were talking about a purely private self-sufficient operation that was managing itself well then I might be more inclined to agree with you.
Instead, this seems to be an easy way to generate extra money since the £5 is in addition to interest.
I have a financial advisor, I do not expect tea and biscuits, but I do expect advice that is not purely based on his own profit motives. My IFA found our mortgage, he got his commission but to retain a good client base he needs to assure his clients that he considers their best interests and is not thinking of his own pocket every time he gives some advice. Customers want the best product for them, not the product that gives the IFA the most commission.
I welcome responses to the substantive issues I have raised as opposed to getting drawn into the profit motivations of the financial houses and advisors.0 -
the real issue here is what is the justification for charging customers £5 PER DAY for using a PLANNED overdraft.
They dont have to justify it to you. I know you want them to but you are not going to get it.They never used to! They also 'sold' me the product on the basis that there were no such fees.
They are also allowed to give notice of changes to their terms of account and give you the chance to take your business elsewhere if you dont like those changes. The fact you didnt means you accepted the changes.I note that you are a financial advisor. I do not think customers want advice purely motivated by profitability to financial houses/advisors. Especially not when certain financial houses have been bailed out with tax payers money.
No financial advice firm has been bailed out with taxpayers money. However, the bottom line is that if you dont pay for advice you are not going to get it. So, profitability is an issue. You dont expect a builder to build you an extension unless you pay them.I have a financial advisor, I do not expect tea and biscuits, but I do expect advice that is not purely based on his own profit motives. My IFA found our mortgage, he got his commission but to retain a good client base he needs to assure his clients that he considers their best interests and is not thinking of his own pocket every time he gives some advice. Customers want the best product for them, not the product that gives the IFA the most commission.
You are mixing up the ability to trade and be profitable with bias. I am fee based. So, dont rely on commission. In reality, your mortgage adviser was biased. He would only have considered commission paying mortgages. Not non-commission paying ones that a fee adviser would have considered. A commission based adviser cannot offer non-commission paying deals as they cannot afford to do so. If you turned around and asked them to do it for no fee and consider non-commission deals they would refuse and let you go elsewhere.
If you are not profitable to the bank, then they will be happy to lose you as a customer. Even if you have been with them 20 odd years.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
I do not rely on my overdraft and only have it as a precaution...
It seems clear from these statements that you don't actually need an overdraft at all at the moment. In which case..Moreover, I only have the overdraft as a Lloyds Tsb advisor recommended that I have it...
..make sure you don't have these little accidents. If you don't like the overdraft fees well then surely you simply have the option not to pay them. Give yourself a buffer so it doesn't happen.As someone who only goes into my overdraft by accident..0 -
It seems clear from these statements that you don't actually need an overdraft at all at the moment. In which case..
..make sure you don't have these little accidents. If you don't like the overdraft fees well then surely you simply have the option not to pay them. Give yourself a buffer so it doesn't happen.
I agree, but as I say, at the moment our savings have gone into the house purchase and so it was a short term solution whilst we rebuilt our savings and can rely on our own "buffer".0 -
They dont have to justify it to you. I know you want them to but you are not going to get it.
No they don't have to, but I am sure they will lose customers if this is their attitude - i.e. creating new fees for something that was previously free and with no additional benefit to customers.They are also allowed to give notice of changes to their terms of account and give you the chance to take your business elsewhere if you dont like those changes. The fact you didnt means you accepted the changes. .
I do not need legal advice from a financial advisor thank you. I am perfectly aware of the law of contract. As I have said, they can move the goalposts but I expect to move elsewhere.No financial advice firm has been bailed out with taxpayers money. However, the bottom line is that if you dont pay for advice you are not going to get it. So, profitability is an issue. You dont expect a builder to build you an extension unless you pay them..
This post is about LLOYDS TSB. Not financial advisers - you brought this aspect up, which I view to be an irrelevent viewpoint to incorporate. You insist on relating this post about Lloyds, to financial advice, its irrelevent. The £5 fee is not for advice. The banks can generate significant profit from the money we place in our accounts with them. That's how they 'get paid' in this situation and also from the interest. The £5 is a further additional bonus to them without any further service to the customer. That said, and as you are aware, the failure by banks to make 'profit', has been widely attributed to the incompetence of 'expert' advisers in the financial industry. Funny that.You are mixing up the ability to trade and be profitable with bias. I am fee based. So, dont rely on commission. In reality, your mortgage adviser was biased. He would only have considered commission paying mortgages. Not non-commission paying ones that a fee adviser would have considered. A commission based adviser cannot offer non-commission paying deals as they cannot afford to do so. If you turned around and asked them to do it for no fee and consider non-commission deals they would refuse and let you go elsewhere.
I am not mixing anything up. He told me he worked this way and I looked at other products myself. The deal he got me was better and his service and efficieny was excellent, and for me, THERE WAS NO FEE! All you talk about is profit. I assure you, even if you offer your clients every product under the sun, they will not pleased that you are so overtly profit driven and happy to ditch them as soon as they become less profitable - you certainly would not say this to a potential new client you are trying to secure!
ANYWAY,
...it would be great to get on point - new £5 overdraft fee... are any Lloyds customers unhappy with it and have you had it refunded?0 -
No they don't have to, but I am sure they will lose customers if this is their attitude - i.e. creating new fees for something that was previously free and with no additional benefit to customers.
The vast majority of account holders dont suffer charges. It wasnt previously free. It was packaged in a different way.I do not need legal advice from a financial advisor thank you. I am perfectly aware of the law of contract. As I have said, they can move the goalposts but I expect to move elsewhere.
So, why post on the internet that you didnt like that they could?you brought this aspect up, which I view to be an irrelevent viewpoint to incorporate.
It was to give a comparison. You seem to think your 20 years is worth something.You insist on relating this post about Lloyds, to financial advice, its irrelevent.
You have totally missed the point.I assure you, even if you offer your clients every product under the sun, they will not pleased that you are so overtly profit driven and happy to ditch them as soon as they become less profitable
It is clear to see that you will never run a business. That isnt a bad thing as not everyone has the skills in that area and yours may well be elsewhere. A business cannot operate if it is not profitable over the long term. It doesnt matter if its your adviser, me, a builder, plumber or a bank. If the bank believes you are not a profitable customer then it will not bat an eyelid at your moving your account elsewhere. Indeed, if you are loss making, it will be doing them a favour. And for the record, my clients are fine about it. I agree my fees with them. if they dont want to pay then they do not get the service....it would be great to get on point - new £5 overdraft fee... are any Lloyds customers unhappy with it and have you had it refunded?
The same response as all the other threads. Since the court case, the banks have only been refunding on hardship cases or first time errors or other similar goodwill payments. As you have already gone to the bank and asked them and they have not refunded then they have made their decision. The FOS no longer take on complaints about "unfair" bank charges and court action is out of the question unless you happen to get yourself locked in the bank and not allowed to leave (reference to the only successful case since the banks won the bank charge case)I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Are you sure its not £5 a month they charge.. I also have a planned overdraft of £500, occassionally i have used it, and only ever see £5 coming out the bank once a month... Im positive its not £5 a day...0
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little_miss_muppet_face wrote: »Are you sure its not £5 a month they charge.. I also have a planned overdraft of £500, occassionally i have used it, and only ever see £5 coming out the bank once a month... Im positive its not £5 a day...
You are right. £5 pm for planned overdrafts.
It is £5 for unplanned plus a daily fee for every day over.
Unplanned Overdrafts
If you try to make a payment out of your account (for example by Direct Debit or cheque) and you don’t have enough money, we will treat this as a request for an ‘Unplanned Overdraft’ or for an increase in one you already have. If we agree, we’ll provide you with an Unplanned Overdraft (or extend your existing one) to cover the payment.
You’ll pay a £5 Monthly Overdraft Usage Fee if you use an Unplanned Overdraft of more than £10 any time during a monthly billing period. As stated above you’ll only pay this fee once in a monthly billing period no matter how many times you go overdrawn in that month. If you use both a Planned and Unplanned overdraft during a monthly billing period you’ll also only pay this fee once. Also if you use an Unplanned overdraft Daily Fees will be applied, which vary depending upon the balance of your Unplanned Overdraft. We will also charge you interest on the amount of overdraft you’re using. If we don't agree to give you an Unplanned Overdraft, you won't be able to make the payment and a fee will normally apply.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
The vast majority of account holders dont suffer charges. It wasnt previously free. It was packaged in a different way.
Previously there was no £5 charge, I just had to pay any consequential interest. Therefore for my purposes, this charge is new. Lloyds have not disputed this hence the new terms and conditions - which you have already recognised.So, why post on the internet that you didnt like that they could?
I have not said they cannot do it. I have said that I do not like it. Its something new that they didnt feel necessary before but now have decided to do. Obviously I am not happy about new additional fees for the same service (as far as I am concerned). People were not happy to have to start paying to watch sports events on tv that were previously free.It was to give a comparison. You seem to think your 20 years is worth something.
I agree, I do think it is worth something and I bet if I ask Lloyds they will tell me it is. They aren't going to market themselves as profit based in how they treat customers, no-one does, and so for that reason I think they should be seen to make effort for any unhappy customer, especially one who has been with them for 20 years.It is clear to see that you will never run a business. That isnt a bad thing as not everyone has the skills in that area and yours may well be elsewhere. A business cannot operate if it is not profitable over the long term. It doesnt matter if its your adviser, me, a builder, plumber or a bank. If the bank believes you are not a profitable customer then it will not bat an eyelid at your moving your account elsewhere. Indeed, if you are loss making, it will be doing them a favour. And for the record, my clients are fine about it. I agree my fees with them. if they dont want to pay then they do not get the service.
Another assumption made without knowledge - that might lead some to say it is "clear" you are a prime example of the few bad eggs in the financial industry.
I would say you are lacking clear business sense, what sort of long term profit model turns away customers during a period when the industry is struggling. In any event, as someone with a positive current account balance 99% of the time and a credit card with Lloyds, how is a £5 refund unprofitable for them. I suggest you stop making assumptions without knowing the facts.
Out of interest, for the record, are you prepared to put your name to these comments since your clients are aware of your motivations and happy?
Do you have any links or associations with Lloyds?The same response as all the other threads. Since the court case, the banks have only been refunding on hardship cases or first time errors or other similar goodwill payments. As you have already gone to the bank and asked them and they have not refunded then they have made their decision. The FOS no longer take on complaints about "unfair" bank charges and court action is out of the question unless you happen to get yourself locked in the bank and not allowed to leave (reference to the only successful case since the banks won the bank charge case)
Thank you for an 'on point' post.0
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