Overdraft increase refusal???

Ultrasonic

meer53 wrote: »

An application to increase the overdraft facility is exactly why they would consider withdrawing the overdraft, and asking the OP to agree a repayment proposal with them. It is bringing the OP's problem to their attention. Thats what would happen where i work anyway (not Lloyds).

Not working in banking I'm a little surprised at this. Does a customer repeatedly exceeding an agreed overdraft limit not automatically get flagged in some way? It would seem odd that if this is of concern to a bank that they should wait for a customer to bring it to their attention. Also, surely if a customer realises that they are repeatedly exceeding an agreed overdraft by a small amount (£70 doesn't seem much to me) then the logical thing for them to do would be to request an increase in their overdraft limit. Surely this demonstrates greater awareness of their financial situation than someone who simply ignores it?

Note to the OP: I am not advising that you do or do not apply for an increase in your overdraft limit. Other posters have more relevant knowledge and I would listen to their advice.

meer53

Ultrasonic wrote: »

Not working in banking I'm a little surprised at this. Does a customer repeatedly exceeding an agreed overdraft limit not automatically get flagged in some way? It would seem odd that if this is of concern to a bank that they should wait for a customer to bring it to their attention. Also, surely if a customer realises that they are repeatedly exceeding an agreed overdraft by a small amount (£70 doesn't seem much to me) then the logical thing for them to do would be to request an increase in their overdraft limit. Surely this demonstrates greater awareness of their financial situation than someone who simply ignores it?

Note to the OP: I am not advising that you do or do not apply for an increase in your overdraft limit. Other posters have more relevant knowledge and I would listen to their advice.

It starts to get flagged when transactions start to be returned more than when just going over the agreed overdraft.

You may think it would be a logical thing to look at increasing the overdraft but from the banks point of view, why would they want to increase any lending that the customer has, if they can't stick to what their existing limit is already ? If they can't manage, the alarm bells will ring very loudly if a higher limit is asked for.

The logical thing to do is not to ask for a higher limit, but to look at your budget to work out why you are constantly exceeding the limit. You are obviously spending more than you have coming in.

An overdraft is not there to be spent, it's supposed to be used as a contingency for emergencies.

Escorcio

meer53 wrote: »

I disagree.

An application to increase the overdraft facility is exactly why they would consider withdrawing the overdraft, and asking the OP to agree a repayment proposal with them. It is bringing the OP's problem to their attention. Thats what would happen where i work anyway (not Lloyds)

The OP needs to sit down and work out how to reduce their outgoings significantly.

Most banks have their overdraft facilities to be renewed/reviewed after a term, typically a year.
A review would also be triggered by continual abuse, for example, having gone over your limit X times, or reaching a landmark internal behaviour score.
The only reason a person would look at it to remove it would if the OP happened to be referred to his banks money management or credit risk team. A routine application to increase his overdraft would not trigger them to look into removing his current overdraft

meer53

Escorcio wrote: »

Most banks have their overdraft facilities to be renewed/reviewed after a term, typically a year.
A review would also be triggered by continual abuse, for example, having gone over your limit X times, or reaching a landmark internal behaviour score.
The only reason a person would look at it to remove it would if the OP happened to be referred to his banks money management or credit risk term. A routine application to increase his overdraft would not trigger them to look into removing his current overdraft

Where i work, a request for an overdraft increase on an account where there is constant evidence of usage above the agreed limit, would automatically refer that customer to the credit risk team. They would never be automatically offered any further lending.

There are automatic markers on every account which indicate how accounts are run, constant returns or requests for payments to be made which take the account over the limit will prevent limits being increased without a conversation with the customer.

Depending on that conversation, the limit can be left as it is, reduced or removed, or the account can be closed completely.

YorkshireBoy

Escorcio wrote: »

A routine application to increase his overdraft would not trigger them to look into removing his current overdraft

That's EXACTLY what happens with NatWest (and presumably RBS too) when you apply for an increase or a decrease.

The old facility is automatically removed and you're credit scored again for the new one.

Many have reported losing their NatWest facilities altogether on this board.

If LTSB operate similarly then the OP may shoot themselves in the foot!

Ultrasonic

meer53 wrote: »

You may think it would be a logical thing to look at increasing the overdraft but from the banks point of view, why would they want to increase any lending that the customer has...

I said it would be logical for the customer to ask, not that it would be necessarily be logical for the bank to grant the request (I would expect that to depend on individual circumstances). I think what was surprising me was the suggestion of a customer realising they had a problem and then requesting a small increase in their overdraft limit leading to the whole overdraft provision being removed. Obviously I completely agree that the best course of action is for the customer to find a way to reduce their outgoings (or increase income) to improve their situation.

Ultrasonic

I should perhaps add that it is evident from other posts on this thread that given bank policies it clearly isn't sensible for the OP to ask for an increase in their overdraft limit. I'm not suggesting otherwise.

meer53

Ultrasonic wrote: »

I said it would be logical for the customer to ask, not that it would be necessarily be logical for the bank to grant the request (I would expect that to depend on individual circumstances). I think what was surprising me was the suggestion of a customer realising they had a problem and then requesting a small increase in their overdraft limit leading to the whole overdraft provision being removed. Obviously I completely agree that the best course of action is for the customer to find a way to reduce their outgoings (or increase income) to improve their situation.

But it wouldn't be the most logical thing for the OP to do.

The logical thing would be for them to think "why am i in this position" ? And then to do something to rectify it, not ask for more money. That doesn't help them at all. In fact it just puts them in more debt. If they can't pay back what they already have, giving them more makes the situation worse.

BUT, lots of people think the same way as Ultrasonic does. (not saying that you are in this situation of course)

Therein lies the problem ! Look at some of the posts on the forum, people looking to take out a loan for rent arrears, looking to borrow from credit cards to repay overdrafts etc. It's not the solution, it just creates a whole new problem.

MoneySaverLog

sunflowerjazz wrote: »

What is CPD99??

A CPD99 is a Credit Policy Decline, which means as far as Lloyds TSB are concerned they are just going to flat decline any credit application you make to them.

BugsyBrowne

Don't you just love it how some people do a bunk from their debts and default on payments then wonder why they have credit decline policies on there banks internal scoring it's mad it's not rocket blo0dy science why the bank has gave this.

If anyone has got a CPD don't fault the bank fault your own financial disaster prior to the account.