Annual Overdraft facility fee

natsplatnat

Good afternoon All!

I can usually be found living out my debt-free musings over on the DFW forum - but I have a question that I think you may be more equipped to answer for me.

I have banked with HSBC for many years and have 2 current accounts, each with an overdraft facility with them. I have just had my 'annual review of your overdraft facility' letter from them and for the first time (ever, as far as I can remember) they are not charging me to maintain the limit on either of my overdrafts. In the past I have been charged £25 on each account to keep my formal overdraft limit.

Now, it seemed odd that they were not charging me this year. That was until I realised that I very rarely use the facility on one account and haven't used the other OD for well over a year. Do they think that as I am more financially organised now that if they charged me, I would cancel the facility, but leaving it there tempts me to use it and they make interest off me?

Anyway, getting to the point, this leads me to ask if these annual charges can be claimed back as I am now toying with the idea that they only charge people who use their overdraft heavily (or who go over it and incur £25 each time they do so); people who potentially are already in financial hardship?

Thanks in advance for any thoughts - Natsplatnat x

pooch

natsplatnat wrote: »

Good afternoon All!

I can usually be found living out my debt-free musings over on the DFW forum - but I have a question that I think you may be more equipped to answer for me.

I have banked with HSBC for many years and have 2 current accounts, each with an overdraft facility with them. I have just had my 'annual review of your overdraft facility' letter from them and for the first time (ever, as far as I can remember) they are not charging me to maintain the limit on either of my overdrafts. In the past I have been charged £25 on each account to keep my formal overdraft limit.

Now, it seemed odd that they were not charging me this year. That was until I realised that I very rarely use the facility on one account and haven't used the other OD for well over a year. Do they think that as I am more financially organised now that if they charged me, I would cancel the facility, but leaving it there tempts me to use it and they make interest off me?

Anyway, getting to the point, this leads me to ask if these annual charges can be claimed back as I am now toying with the idea that they only charge people who use their overdraft heavily (or who go over it and incur £25 each time they do so); people who potentially are already in financial hardship?

Thanks in advance for any thoughts - Natsplatnat x

HSBC do not just charge the renewal fee to those that use an existing facility heavily, or even lightly.

I think HSBC have recently (or will shortly) change their rules, about annual reviews but previously they charged for each request (but gave 1 free within a given period). An annual review was considered a request as are unauthorised overdraft requests, so if you had incurrred one or more of those (the first of which would have been free) that is why the annual review one would have been charged.

natsplatnat

But HSBC themselves decided to review my OD - the only way I could have avoided paying the fee would have been to get my OD removed... which was not an option. So in the past,they have been able to decide that my formal OD has to be reviewed each year and that they would charge me £25 a pop for doing so? (my OD limit never changed!!!)

noh

The way to avoid the fee is not to have made any formal or informal overdraft requests within the previous six months.
That is why you have not been charged this time.

http://www.hsbc.co.uk/1/2/overdrafts

pooch

natsplatnat wrote: »

But HSBC themselves decided to review my OD - the only way I could have avoided paying the fee would have been to get my OD removed... which was not an option. ...

Yes it is an option.
Maybe not one you were happy to accept, but an option provided by the bank.

natsplatnat

noh wrote: »

The way to avoid the fee is not to have made any formal or informal overdraft requests within the previous six months.
That is why you have not been charged this time.

http://www.hsbc.co.uk/1/2/overdrafts

Ah, I see the section you refer to. So I shouldn't have been charged last year if I hadn't made any formal or informal overdraft requests within the 6 months leading up to my review? I will have to check back at my spreadsheet!!

natsplatnat

Seems harsh though that if you are in a posistion to need an OD or indeed go over your OD limit (which you pay for in charges) they then charge you to decide that you can keep your OD!