unplanned overdraft Lloyds

dalesrider

VanessaDeagan wrote: »

I still don't know the best way to represent overdraft fees, but one thing I'm certain of, it's definitely not using the EAR calculation (doesn't tell the entire story unless you add "EAR of X% plus £10 per day for the first 8 days).

You don't get any clearer that cost per day... If you can't understand that then you can't understand how much money you have...

You have also to remember that banks have to allow customers to get their cash.
Now sadly a ATM only gives you notes. So if you have £4.99 in your account. Then you are entitled to that cash. But you can only get £10 (some now allow £5's).
So are you now saying that you should not be allowed to get your £4.99??

It appears you have stumbled upon an oxymoron ("...going past their limits.").

It is the customers cash. When the customer has spent all THEIR cash and start using the banks. Then they get charged. Is that unfair?

just as I do not judge those who are grammatically challenged, don't know how to use punctuation or a spell checker

:rotfl:
Been on the internet to know when people start picking on this, that they have run out of steam and the door is closing.

psychic_teabag

dalesrider wrote: »

You don't get any clearer that cost per day... If you can't understand that then you can't understand how much money you have...

Yes, a daily charge is clear. But at the current levels it seems rather disproportionate : a £5 daily fee for going over by £1 is excessive. (I'm sure all this was discussed when the daily fees were first introduced.)

You have also to remember that banks have to allow customers to get their cash.
Now sadly a ATM only gives you notes. So if you have £4.99 in your account. Then you are entitled to that cash. But you can only get £10 (some now allow £5's).
So are you now saying that you should not be allowed to get your £4.99??

But it seems that if you withdraw £5, you now owe the bank not only the 1 penny that you borrowed, but a £5 fee. And I guess if you do it on a Friday night, you're going to owe £15.01 by Monday ?

It is the customers cash. When the customer has spent all THEIR cash and start using the banks. Then they get charged. Is that unfair?

No, it's perfectly fair that you should have to pay to borrow.

What we're talking about is whether you should have to pay extra to enable a feature on the account that it will prevent you from going overdrawn when you didn't realize you were about to.

I'm fortunate that I can keep a buffer in my current account : it tends to be around £200 but I don't know to the nearest penny (or even nearest pound) how much is actually in there. [And if I switch over to my new 123 account for everyday use, the buffer will be more like £3000.] Someone who operates much closer to the borderline does run the risk of going over. They should have the option of saying "no, I can't afford the £5 per day borrowing costs. Please don't let me go over accidentally."

Maybe it would be a bit fairer if the unarranged fee started out a bit smaller for the first few quid overdrawn. £1 per day for the first £10 or something. (Which I guess is more or less equivalent to having an arranged overdraft of £10, so that you pay the daily fee for arranged overdraft rather than unarranged overdraft up to that level.) Or even just the amount itself, capped at £5. (Which is still 100% interest per day for small amounts !)

bengal-stripe

psychic_teabag wrote: »

But it seems that if you withdraw £5, you now owe the bank not only the 1 penny that you borrowed, but a £5 fee. And I guess if you do it on a Friday night, you're going to owe £15.01 by Monday ?

Many banks (maybe the majority) do give you a 'buffer' of 10 quid or so, where you won't get charged for being overdrawn.

Of course, there is always someone who will get charged, because s/he was overdrawn by £10.01: "but I was only one penny over!"

meer53

It's not rocket science. Banks charge fees if you exceed your agreed overdraft facility.

The charges are always stated in their t & c's. It's quite easy to keep track of what you spend, either online, or by getting a balance at an ATM or, better still, use a pen, piece of paper and a calculator.

If you don't like the way your bank operates, have a look around and move to another one. As Bengal-stripe says, quite a lot of banks have a buffer before the charges kick in.

Why should banks have to monitor accounts for their customers ?

VanessaDeagan

meer53 wrote: »

It's not rocket science. Banks charge fees if you exceed your agreed overdraft facility.

The charges are always stated in their t & c's. It's quite easy to keep track of what you spend, either online, or by getting a balance at an ATM or, better still, use a pen, piece of paper and a calculator.

If you don't like the way your back operates, have a look around and move to another one. As Bengal-stripe says, quite a lot of banks have a buffer before the charges kick in.

Why should banks have to monitor accounts for their customers ?

Firstly, moving to another bank would be futile and they all implement the same scheme (as far as I'm aware). It's also not possible to close your account if you are a tax-paying employee because all payments from most companies are made directly into a bank account.

Secondly, whether or not keeping track of your account(s) and spending is easy or difficult is not the issue here. The issue is:

Is it morally, ethically and legally acceptable for a bank to force a service (unplanned overdrafts) onto customers and to make customers pay £120 per year if they wish to opt-out of the service?

Another way to look at it:

What could possibly warrant and justify a charge of £120 per year to have a "Control" facility applied to your account to prevent you from going over your limit?

If there's anyone with a legal background who perhaps knows something about the law in respect to this (Goods and Services Act 1982, or whatever Act applies to this kind of thing), then I'd really like to hear from you.

psychic_teabag

Actually, what are the costs of failed payments ? I infer from other threads that a bounced cheque and a failed D/D are about £25 ? If those are the sorts of numbers, I guess £5 per day isn't so bad, as long as you can repair the problem quickly. (esp. if they would debit the £25 from your account and then start charging you overdraft fees anyway !)

meer53

There are banks who do not charge if the account is overdrawn by a small amount.

The OP wasn't asking about the ethics of this, they were asking about whether the facility could be removed. The thread seems to have gone a little off topic.

MnemonicCarrier

psychic_teabag wrote: »

Actually, what are the costs of failed payments ? I infer from other threads that a bounced cheque and a failed D/D are about £25 ? If those are the sorts of numbers, I guess £5 per day isn't so bad, as long as you can repair the problem quickly. (esp. if they would debit the £25 from your account and then start charging you overdraft fees anyway !)

At Lloyds TSB, it's £10 per day for 8 days - not sure what happens after that (i.e. whether or not you're charged £10 per day for 8 days in the following month(s)).

MnemonicCarrier

meer53 wrote: »

There are banks who do not charge if the account is overdrawn by a small amount.

The OP wasn't asking about the ethics of this, they were asking about whether the facility could be removed. The thread seems to have gone a little off topic.

You're right, the OP wasn't asking this. However, I believe the legalities around the unplanned overdraft scheme are very relevant to the OP's original question as the OP has fallen "victim" (if I may use that word) to a scheme (unplanned overdrafts) that arguably shouldn't exist in the first place (or should at least have a free opt-out option instead of a £120 a year opt-out option).

meer53

MnemonicCarrier wrote: »

You're right, the OP wasn't asking this. However, I believe the legalities around the unplanned overdraft scheme are very relevant to the OP's original question as the OP has fallen "victim" (if I may use that word) to a scheme (unplanned overdrafts) that arguably shouldn't exist in the first place (or should at least have a free opt-out option instead of a £120 a year opt-out option).

Debtfreeby2013 says that Lloyds have a free text alert service to help you monitor your account, maybe the OP should have signed up for that free service ? No need to pay £120 a year at all.