HSBC Unauthorised Overdraft - Irresponsible Lending?

edtheball

Hi All

I have two accounts with HSBC, a savings one (with a large-ish balance) and my current account which my wages go into. This month I accidentally used the wrong card to pay for something resulting in my current account going overdrawn. The problem is, I didn't notice and for the last 2 weeks have been using my card as normal to withdraw cash, pay in shops and even had direct debits going through.

According to the staff in HSBC I will be charged £25 per transaction (one per day) up to a maximum of what I have borrowed, which means I now owe them nearly £300 in charges. I wonder, if I continue using my card, when they would stop letting me draw money out? Maybe when the charges were equal to my savings account?

By continually extending my credit over the last two weeks without asking me and knowing this will result in substantial charges, could this be classed as irresponsible lending? I know everyone hates payday lenders, but a bank adding 100% onto what you've borrowed in a 2 week period, that's insane! I also know that it is my own responsibility to manage my funds, but this was just an oversight.

Is there anything I can do to avoid this huuuuuge charge?!

Gromitt

Talk to them and ask, I've had charges > £100 refunded on a few occasions when I thought I had more money than I did, used the wrong card, etc. They'll typically do it once per year.

Secondly, setup an overdraft so if it does happen again, you will not be stung for charges, and (I don't know if HSBC supports this, but FD do for sure and they are part of HSBC) request a text message when your balance gets below a set amout.

edtheball

I have a meeting at the bank set for Monday to discuss this, but whatever the outcome I will be closing all my accounts with them (including ISA's, savings and current account) because I think to let you continue drawing money out and then charge such exorbitant fees is disgusting behaviour and the sheer level of charges here is ridiculous.

They said the unauthorised overdraft service is there to help customers out in an emergency, but obviously if I'm still drawing money out after two weeks it's not an emergency. They should have either put a stop on the account or called me.

Soz for the rant, but I'm properly annoyed about this!

jonesMUFCforever

edtheball wrote: »

I have a meeting at the bank set for Monday to discuss this, but whatever the outcome I will be closing all my accounts with them (including ISA's, savings and current account) because I think to let you continue drawing money out and then charge such exorbitant fees is disgusting behaviour and the sheer level of charges here is ridiculous.

They said the unauthorised overdraft service is there to help customers out in an emergency, but obviously if I'm still drawing money out after two weeks it's not an emergency. They should have either put a stop on the account or called me.

Soz for the rant, but I'm properly annoyed about this!

A bit of a rant from someone who is 100% at fault.
OP all banks work this way.
Put your toys back in the pram!

edtheball

So you think it's OK for a bank to charge 100% of what you borrow?!

And FYI not all banks do it, if I have no money in my Barclays account, the cash machine says 'no funds available'.

But, er, thanks for your helpful and constructive response jonesMUFCforever...

meer53

edtheball wrote: »

So you think it's OK for a bank to charge 100% of what you borrow?!

And FYI not all banks do it, if I have no money in my Barclays account, the cash machine says 'no funds available'.

But, er, thanks for your helpful and constructive response jonesMUFCforever...

Don't you check your balance before withdrawing cash ?

edtheball

Nope. Never needed to before. As far as I knew I had £300 more in my account, just the stupid mistake with the wrong card messed me up.

JuicyJesus

edtheball wrote: »

Nope. Never needed to before. As far as I knew I had £300 more in my account, just the stupid mistake with the wrong card messed me up.

You should. Doing anything with your card without knowing how much money is in your account is a surefire way to have things like this happen.

HSBC have done nothing wrong. You asked for cash and they provided it, and charged the attendant fee for doing so.

They may well refund as it's a first time offence though.

edtheball

I think I might be being a little mis-understood here - if I was asking for cash knowing I didn't have it, then I would happily pay the fees. The point is I thought the money was in there, they didn't tell me it wasn't and now I am £300 down in charges! But, obviously, banks are banks and I'm just little me. Thanks for the warm welcome, MSE Forum.

YorkshireBoy

OP, you may wish to familiarise yourself with your account T&Cs, including the 'price list' for services provided...but especially their fair fees policy and the associated "discretionary policies" they claim to operate.

If you can't find your personal copies, they may be found on the HSBC website.

And some tips for the future, because prevention is always better than the cure:

1. Pay closer attention to your finances. I log into my main bills account several times a week.
2. When you withdraw at an ATM, at least cast a cursory eye over the information on your receipt...particularly the balance.
3. If you don't regularly use the "savings account" card, bury it deeper in your wallet/purse. Even better, change the PIN to one that is different to your main account.

YorkshireBoy

edtheball wrote: »

if I was asking for cash knowing I didn't have it, then I would happily pay the fees.

How is the bank supposed to know what you know?

They provide a telephone number, a website, and are part of an ATM network...all of which will tell you your balance. Use them?