Bank Overdraft Advice Please

newstart4me

Hi All,

I hope someone can help regarding an issue I've just discovered regarding an overdraft on one of my Natwest accounts.

Basically I'd got into a bit of mess with some Payday Loans (I know I know I was very stupid). A change in my personal circumstances meant I could not service these slowly reducing balances each month. I therefore wrote and emailed them explaining this and making monthly repayment offers. I also changed the account to which my salary was paid into (still Natwest).

Anyway I'd never heard from the PDL's regarding my offers but had phone calls Chasing payment. Each time I referred them to my letters.

Today I've received a letter from Natwest regarding an unauthorised overdraft on the 'old' account. Having just been to check the balance I am now nearly £750 overdrawn!!!

How can this occur when I have no overdraft facility? I will be on the phone first thing to establish what has been going on but can a bank do this?

meer53

Does the overdraft relate to a payment taken from the PDL company ?
If it does, then when you gave the PDL company your debit card details, you authorised them to debit your account with whatever payment is due.

Because card payments are guaranteed for the company who are claiming them, the bank has to pay them, whether you have an overdraft or not. You should be contacting the PDL company, not your bank.

newstart4me

Right, I had the emails from the PDL's saying that payment had been attempted and not successful. This is about a month and a half ago so wasn't sure if the system problems Natwest had experienced may have allowed these to be processed?

I can't understand what the point of an overdraft limit is if this can occur?

meer53

An agreed formal overdraft limit is there for you to use as a buffer if you need it. An informal overdraft is when payments debit your account which take you over that limit.

Card payments have to be honoured by your bank so if you don't have enough available in your formal overdraft facility, your bank pays them, taking you into an informal overdraft position.

Speak to the PDL company to see why they haven't responded to your letters. Just because they weren't successful taking the money a month ago doesn't mean they won't try again. They will continue to try until they get what they are owed. Do you still owe them any money ?

YorkshireBoy

I understand the banks now have to cancel a CPA (which is what you have) if you request them to.

However, I'd expect the PDL company to ramp up their attempts to collect if you do that!

newstart4me

The PDL's must have collected all of the outstanding balances. I don't have Internet banking so can't confirm this until the morning.

Also I presume there is a time limit when the CPA can be cancelled? I hadn't been monitoring this account so can't be certain when these payments were taken until I speak to the bank. I would also think the PDL's wouldn't offer any useful help seeing as they've now claimed all of the balances.

Is it a wise idea to setup a new account with a separate bank for salary, rent etc otherwise Natwest will just raid the other account I have for the £750?

dalesrider

newstart4me wrote: »

Also I presume there is a time limit when the CPA can be cancelled?

They could only claim anything back after you have cancelled with the PDL co's.
Although under regs now they can take cancellation when you speak to natwest.
But as YorkshireBoy said. If any payment is returned, then they will be chasing you and adding interest as it goes.

While I understand that you are trying hard to get yourself out of a mess. And this next bit is not aimed at you.

I think it is morally wrong to cease payments on any loan, purely by abusing PSD and stopping a CPA.

I'm sure at some point these types of payments to this type of retailer will go to FOS and the implications of allowing these payments to be stopped in this fashion, could have a greater impact on any loan, and someone not wanting to make payments.

fozmcfc

My thoughts are, if the payday loans have been paid off in full, then that is a blessing.

Ok you now have an unauthorised overdraft, but I'd rather be dealing with Natwest, then a load of payday loans. Payday loan charges for not paying are ridiculous, so if you are clear of them be grateful for that, as the charges will just keep adding up.

If you are not clear of the payday loans, then you really need to face it head on and do everything possible to contact them and come to an arrangement to pay.

Definately, if you are clear of payday loans, rather than going in all guns blazing, I would take the apologetic approach with Natwest. Try to come to some arangement about paying it off, over the next 6 months or so and ask them not to keep making charges.

If you go in all guns blazing, I think you will get short sharp shrift from Natwest.