Declined Overdraft

Purple_Rein

Hi All
Recently applied for an overdraft of £4k to enable me to make a payment of £5640 into an ISA account whilst waiting for arrival of funds (£11.4k) from a maturing Bond.
The application was made online to RBS and as I received no forthcoming approval, I felt it better to make my own arrangements to ensure that my ISA cheque was covered - this necessitated moving funds from another account.
I (wrongly) assumed that there would be no problem with my application for the following reasons:
35 year connection with RBS (dating back to Williams & Glyns)
Previous mortgage with RBS now repaid - the Bank still hold a Legal Charge over my mortgage-free property
Salary of £2k per month mandated to my RBS account
Previous loans repaid without difficulty
Never been overdrawn or had a payment refused
I hold a Fixed Term ISA of £10k with the Bank.

I eventually received a letter stating that application refused due to 'not meeting the Credit Score criteria' and that they may in future reconsider 'if my circumstances change'. I have expressed my disapproval and asked them to reconsider now, as a precautionary measure in the event that this may be required in the future.
So far, they have made a payment of £20 to me for the delay in responding but, more importantly I feel, they are maintaining that they are unable to offer any overdraft facilities to me which is of concern.
I have asked for a more detailed response with specific comment about where my application fell short of the Bank's criteria.

Has anyone else come across a situation like this? I feel bemused by the Bank's decision - and wonder if any guidance can be offered, in particular if the Bank continue to deny this facility to me. If this remains the case, I shall look to the Ombudsman for common sense to prevail!

Many thanks for taking the time to read this

Bob_the_Saver

Someone will no doubt enlighten me, but if it's their money you're looking to borrow it's up to them.

BugsyBrowne

Customer loyalty went years ago if there ever was any.

I got an OD for 3k after only 3 months banking with Lloyds so might be worth getting shot RBS.

wannaberichbtch

I can understand your frustration but I don't think the ombudsman will support your case, you would firstly have to exhaust the bank's complaints procedure. Far better I think to switch, First Direct will give you £100 for switching, and you get an overdraft of at least £500, £250 of which is interest free, plus th 8% regular saver which beats the best Isa rates.

Starting

I do not understand why the OP imagines he is entitled to an overdraft. Seems an arrogant post.

YorkshireBoy

Purple_Rein wrote: »

Recently applied for an overdraft of £4k to enable me to make a payment of £5640 into an ISA account whilst waiting for arrival of funds (£11.4k) from a maturing Bond.

You wanted to borrow money at circa 18.9% EAR to save at circa 3% AER?

You must have a very good reason to want to do such a thing?

coldhandoff

Purple_Rein wrote: »

I shall look to the Ombudsman for common sense to prevail!

Based on what? The bank doesn't owe you an overdraft nor are they obligated to give you one.

pmduk

Purple_Rein wrote: »

I have asked for a more detailed response with specific comment about where my application fell short of the Bank's criteria.

I feel that it's unlikely that any bank will divulge their credit scoring criteria to a customer, for obvious security reasons.

I'm not certain the ombudsman can intervene in a bank's commercial decision.

Sadly, you're going to have to accept this decline and move on, as others have said there is little to be said for loyalty to banks any more.

opinions4u

Purple_Rein wrote: »

Recently applied for an overdraft of £4k to enable me to make a payment of £5640 into an ISA account whilst waiting for arrival of funds (£11.4k) from a maturing Bond.

Lending for investment purposes is exceptionally high risk. If its lending to save (as opposed to invest) then the borrower is making a strange decision.

The application was made online to RBS and as I received no forthcoming approval, I felt it better to make my own arrangements to ensure that my ISA cheque was covered - this necessitated moving funds from another account.

Hardly the end of the world.

I (wrongly) assumed that there would be no problem with my application for the following reasons:
35 year connection with RBS (dating back to Williams & Glyns)
Previous mortgage with RBS now repaid - the Bank still hold a Legal Charge over my mortgage-free property
Salary of £2k per month mandated to my RBS account
Previous loans repaid without difficulty
Never been overdrawn or had a payment refused
I hold a Fixed Term ISA of £10k with the Bank.

So at a time when the banks (through their own actions) are well and truly on their backsides you expect them to give you £4k so that you can top up an ISA.

I eventually received a letter stating that application refused due to 'not meeting the Credit Score criteria' and that they may in future reconsider 'if my circumstances change'. I have expressed my disapproval and asked them to reconsider now, as a precautionary measure in the event that this may be required in the future.
So far, they have made a payment of £20 to me for the delay in responding but, more importantly I feel, they are maintaining that they are unable to offer any overdraft facilities to me which is of concern.

They don't have to lend if they don't want to.

I have asked for a more detailed response with specific comment about where my application fell short of the Bank's criteria.

Unfortunately the will only disclose very generic detail. Reveal too much and they train people how to succeed with fraudulent credit applications.

Has anyone else come across a situation like this? I feel bemused by the Bank's decision - and wonder if any guidance can be offered, in particular if the Bank continue to deny this facility to me.

A written appeal outlining the facts you state (without emotion) is all that's left.

If this remains the case, I shall look to the Ombudsman for common sense to prevail!

And they will tell you that your complaint is outside their jurisdiction. They cannot make a bank lend a customer money.

chambta

£4k is a significant overdraft. Ultimately the decision is based on a multitude of factors - not least your account conduct. If you'd called your branch they'd have likely told you what could have applied to your account. Anything beyond that is virtually impossible to get approved 'up above'.

ses6jwg

As said 4k is a significant overdraft in the current climate.

I very rarely see overdrafts offered above £2500 nowadays, and that's to people who turnover more than £2.5k per month and whose balance never drops below £1k.