I can't believe banks can get away with this...

ED

David Campbell - great to have you on MSE giving such helpful response. Reminds me of the good old days when customers could discuss important matters direct with their bank manager.

Walletwatch

skeggysteve wrote:

Sorry to disagree but it sound to me like the bank have 'set up' the customer - we'll let then get away with for a couple of month then hit them with the charges.

OK you shouldn't go overdrawn without asking BUT if you do it by mistake (no one is perfect!) and the bank allow it what are you to think?

Agreed, and I think Abbey have more than acknowledged it by refunding half the charges the first time round. If one is a repeat offender though (using a strong term for want of a lighter one), I don't see why the Bank should reconsider.

You know you've been charged for going overdrawn once, why should you get into such a situation again?

As somebody else has pointed out, the bulk of a Bank's profits come from Corporate and Institutional Banking and its Treasury operations. I used to head the retail operations of a bank branch, and if that split is anything to go by, Retail contributed a paltry 15% to the branch profits, Corporate and Treasury accounting for the rest!!! Given this, I don't see why Banks should go out of their way to 'set up' customers as you call it. The first charge should have been a deterrent enough to avoid any such situation in future.

My sympathies with the OP for having got into such a position inadvertently the second time round, but he should appreciate that if he was expecting debits to hit his account AFTER already having been charged once, it is all the more reason for him to be doubly careful that he has enough credit balance to cover his debits.

Walletwatch

skeggysteve wrote:

And reserving money when paying by debit card? And all the other money making things (scams) they do?

Who said that they make any money by reserving money when you pay for something by debit card? This is clearly a misconception. While the funds are not available to you when you pay by debit card, the value date of the actual debit would have to be when the funds are actually transferred to the merchant, not before that. And it's the value dated balances that are used for interest computation, so you wouldn't lose out on the interest either.

Now, there are some banks that have systemic inadequacies, where the hold on funds persists even after the physical debit takes place. Here, there is a likelihood that you get wrongly charged if a second debit happens in the intervening period when the actual debit has already happened, but the hold on funds has not been removed, causing available funds to be inadequate. But even in such cases, you can get these charges refunded, though it might be a logistical nightmare to speak to people in call centers,etc.

Having said that, this is not something prevalent in the Banking system altogether, it is just a few banks, and I would avoid banking with them, if this turns out to be a frequent problem.

skeggysteve wrote:

The banks don't need to charge " those who fail to comply with the terms of their accounts."
to make "current accounts are financially viable".

Unfortunately, people like you and me sign terms and conditions that clearly spell out that these charges may be applicable. Best to not get into a situation that might make you liable to these.

skeggysteve wrote:

Banks don't care about the customer they only care about profit.
They seem to have forgotten that we, the customer, are the ones that are the starting point for that profit!
Steve

I don't disagree with that, and I must say, that a charge of £60 for going overdrawn by £5 is diabolical to say the least. Let us however, view this whole thing in the context of the OP's specific situation.

Walletwatch

davidcampbell wrote:

jaimeo, decision on mandates will be made when they are requested - first thing in the day. if no funds at that time it may be returned. if you credit that same day unless you tell your bank you have done so no-one can change the decision because they dont know. banks clearing centre need to be told (usually via the callcentre) although certain branch staff may be able to do this on your behalf (depending on which bank you are talking about)

thats why same day is not always enough.

hth



DC

To add to DC's comment above, same day transfers are not good enough when you are expecting a chq to hit the account, and chances are, that the payment will be refused, even if you do fund the account later. This is where arranging an overdraft (even one which is not at 0% interest) helps, as so far as you fund the account same day, you will never be charged interest, nor will your chqs / DD payments be returned.

To illustrate, (and this might be a deviation, apologies in advance) I have a Regular Saver account with HSBC (in fact I have two of them, as I opened a joint current account with the missus made that her salary acct) However, as soon as the salary comes in, I w/d it immediately, and deposit it in cash, into a high interest savings acct. On the date the Reg Saver debits are due, I let it happen and cause the account to go overdrawn by £500, but remember to deposit cash to cover it on the same day, leading to zero interest liab.

Gives me the best of both worlds - manage to dripfeed £500 a month to earn 8% on it, but do not leave any of the salary money in the low interest paying current account. I must say though, that all of this is facilitated as I work in Canary Wharf and the missus works close to Bank.

daveboy

I can't believe that.....

People have the nerve to complain when they are incompetent at arranging their own financial matters.

Personally, I have an £800 overdraft with Lloyds TSB, which I don't currently use. I know I will be hit with charges should I go over that limit.

Sounds like you'd be better off sticking your money under the bed in future - that way you won't have the risk of charges and won't be able to moan when things go wrong either.

ED

Teasing aside...

Walletwatch - thanks for enlightening many of us so thoroughly. Highly helpful tip from you :

"arranging an overdraft (even one which is not at 0% interest) helps, as so far as you fund the account same day, you will never be charged interest, nor will your chqs / DD payments be returned."

mippy

I'mm admit to being financially incompetent (FYI, Walletwatch, I'm female!). However, I'm just getting to the point where I'm able to budget and on a small amount of money £60 makes a huge difference...and it's a big, big profit on £5. I can understand being charged once, but not three times on the same day.

I have requested an overdraft simply to avoid things like this happening, and been turned down. As mentioned, I had used this £50 'pencil limit' and not been charged before, just interest. It is, to my eyes, as though they picked a random time to start applying charges to my account. I know from asking around that Abbey send out letters to inform when a charge is covered with insufficient funds- nopt so in my case, I recieved nothing. I don't have time to go out and check my balance each time I need to use a card- it's a half-hour round trip to the nearest branch which is longer than I get for lunch- so rely on my card being declined as the indicator of whether there's anything in there or not.

Funnily enough, I have taken to withdrawing all the cash after my rent etc. goes out and keeping it somewhere safe. Did try under the bed but the coins kept falling through....:)

Walletwatch

mippy wrote:

FYI, Walletwatch, I'm female!.

My apologies.

mippy wrote:

However, I'm just getting to the point where I'm able to budget and on a small amount of money £60 makes a huge difference...and it's a big, big profit on £5. I can understand being charged once, but not three times on the same day.

As I have said earlier, I wholeheartedly agree with the lack of reason in the amount charged being so high. As for being charged thrice, I am afraid that also might be part of the T&Cs we are all subject to.

mippy wrote:

I have requested an overdraft simply to avoid things like this happening, and been turned down. As mentioned, I had used this £50 'pencil limit' and not been charged before, just interest. It is, to my eyes, as though they picked a random time to start applying charges to my account. I know from asking around that Abbey send out letters to inform when a charge is covered with insufficient funds- nopt so in my case, I recieved nothing. I don't have time to go out and check my balance each time I need to use a card- it's a half-hour round trip to the nearest branch which is longer than I get for lunch- so rely on my card being declined as the indicator of whether there's anything in there or not.

But it is pretty clear that you cannot rely on being declined as an indicator, from what we learn from DC. And this seems to be general practice among banks and retail establishments, so chances are, you'll have this problem with anybody you bank with.

As somebody else has suggested, if you were guaranteed a credit into your account on the date when the three debits hit your account, can you not approach them, asking them to cover you for charges / expenses incurred as a result of the delayed credit?

mippy wrote:

Funnily enough, I have taken to withdrawing all the cash after my rent etc. goes out and keeping it somewhere safe. Did try under the bed but the coins kept falling through....:)

LOL ;-)

mippy

the credit came from my mum, sadly, not someone who can cover charges!

davidcampbell

I know from asking around that Abbey send out letters to inform when a charge is covered with insufficient funds- nopt so in my case, I recieved nothing.

your source is wrong. we send out letters for any bounced item only. paid items do not generate a letter. hence you didnt receive any

I don't have time to go out and check my balance each time I need to use a card- it's a half-hour round trip to the nearest branch which is longer than I get for lunch- so rely on my card being declined as the indicator of whether there's anything in there or not.

with all due respect thats why we offer other channels - ebanking/automated telephone banking/call centres etc

David Campbell - great to have you on MSE giving such helpful response. Reminds me of the good old days when customers could discuss important matters direct with their bank manager.

just step into my office :rotfl: