Bank charges, is this normal?

charwill

Hi there

I recently went over my overdraft limit, without realising it, for a period of about 10 days. This is only the second time (in the 20 years I've had the account) that I've gone over the limit, the previous time about six months ago I was charged a £25 un-arranged overdraft fee by HSBC.

This time, however, they sent me a letter to tell me that I owe them £125 in charges for the five individual transactions that took me further and further over my limit. The amount I went over my overdraft limit in total was around £200. As soon as I received the letter I paid money into the account to take me back under my overdraft limit.

Is it normal for a bank to charge £125 for that amount of unscheduled overdraft over a relatively short period of time?

meer53

It's £25 for each transaction that takes you further into your unarranged overdraft.

Check your terms and conditions, it's explained there.

Agricolae

charwill wrote: »

Hi there

I recently went over my overdraft limit, without realising it, for a period of about 10 days. This is only the second time (in the 20 years I've had the account) that I've gone over the limit, the previous time about six months ago I was charged a £25 un-arranged overdraft fee by HSBC.

This time, however, they sent me a letter to tell me that I owe them £125 in charges for the five individual transactions that took me further and further over my limit. The amount I went over my overdraft limit in total was around £200. As soon as I received the letter I paid money into the account to take me back under my overdraft limit.

Is it normal for a bank to charge £125 for that amount of unscheduled overdraft over a relatively short period of time?

How much you're charged depends on the bank, but all banks will charge for being in excess of your account limits and having items go unpaid.

In this case it could be you've been charged £25 a time for items going unpaid. This is a lot (for comparison, Natwest charges a flat rate of £6 per unpaid item) but it is in the HSBC terms and conditions that for every returned item over £25 they will charge you £25.

However, I find it more likely that the charges are HSBC's own "interesting" unarranged borrowing fees. They treat every attempt to make payment from your account which takes you over your agreed overdraft limit as "an informal request for an overdraft", for which they charge £25 per time if it happens more than once in 6 months. However there are various permutations to this (see their Fair Fees policy).

Gromitt

It may be worth your while setting up a formal overdraft just in case it happens again in the future. You think you'll never need it and then something happens like this and it costs you a fortune.

I've got a £250 overdraft on my account "just in case". It costs nothing whilst I'm in credit and far less than a unauthorised overdraft should I use it (along with a text message telling me I'm now using it so I can fix it within, hopefully, 24 hours).

There is typically a limit to how many times they can charge you the £25, it'll all be explained in the T&Cs.

pqrdef

Ask for a refund. Then switch banks whether you get the refund or not.

If you get the refund, the charge is just a try-on. This kind of attempted gouging isn't an acceptable way for a bank to treat customers.

They'll get the message, but only when they're made to.

opinions4u

Advice to everybody with a bank account.

1. Read the charging tariff.

2. Understand it. If you don't, ask.

3. Operate your account in a way that means you never pay a bank a penny.

4. Don't whine when you get charged. It was your choice to act in a way that generated the charges.

Bank charges are optional. Just act in a way that means you never pay them.

p00hsticks

Gromitt wrote: »

It may be worth your while setting up a formal overdraft just in case it happens again in the future.

As the OP says that "I recently went over my overdraft limit, " then it sounds like they already have one (and are using it) but exceeded it on this occasion.

staffie1

pqrdef wrote: »

Ask for a refund. Then switch banks whether you get the refund or not.

If you get the refund, the charge is just a try-on. This kind of attempted gouging isn't an acceptable way for a bank to treat customers.

They'll get the message, but only when they're made to.

How are they trying it on? I'm sure that the charges will be detailed at length in the agreement. As far as the bank are concerned they are are meeting their obligations under that agreement! If they refund, it will be out of goodwill (and on this occasion I think they should do so) rather than an admission that they are somehow trying to defraud the customer.

aidrenegade

charwill wrote: »

Hi there

I was charged a £25 un-arranged overdraft fee by HSBC.

Had this problem 2 months in a row! I'm a self employed tiler. 2 months in a row its been my 'Virgin' tv etc payment that bounced. The bank won't give me a temp overdraft option to cover me getting caught out by a direct debit withdrawal that is on going.
Is it legally or ethically wrong to charge a wopping £25 for a 'computer generated' overdraft fee for a temp overdraft HSBC never supplied? We are only talking maybe £50 overdrawn but now in 2 months I have to pay that in 2 X £25 fees. To be honest thanks to this site I'm now normally out of debt but a little drop of in work that I can't controll is causing me problems!

I'd actually accept the £25 fee if HSBC paid the direct debit even if it put my account less than £50 overdrawn just so my monthly direct debit went through!

chambta

aidrenegade wrote: »

Had this problem 2 months in a row! I'm a self employed tiler. 2 months in a row its been my 'Virgin' tv etc payment that bounced. The bank won't give me a temp overdraft option to cover me getting caught out by a direct debit withdrawal that is on going.
Is it legally or ethically wrong to charge a wopping £25 for a 'computer generated' overdraft fee for a temp overdraft HSBC never supplied? We are only talking maybe £50 overdrawn but now in 2 months I have to pay that in 2 X £25 fees. To be honest thanks to this site I'm now normally out of debt but a little drop of in work that I can't controll is causing me problems!

I'd actually accept the £25 fee if HSBC paid the direct debit even if it put my account less than £50 overdrawn just so my monthly direct debit went through!

If you can't afford it it cancel it.