Help! - My Daughter is an Ostrich!!

2rea22

Dear All
Help!! Darling Daughter has just come to me for a heart-to-heart. She's in the second year of uni and things are a bit tight. She said she was having a bit of money trouble so I offered her 30 quid to tied her over. If only!

Apparently she has been struggling since April with unplanned overdraft fees with a Halifax Ultimate reward account. This is the one where you pay £15 per month for loads of benefits you don't use!

Anyway she got sucked into the land of overdraft and so sensibly she went to see someone at the branch. She opened a student account with a free overdraft facility and "thought" she had closed the other account down. She paid £300 into the account which left £14 outstanding. She later paid in the £14. However, the overdraft facility had been taken off the account. On the same day she paid in the £14 another £15 account fee was taken out. This started a spiral of bank charges of over £400. This has not been helped by the fact that Darling Daughter has also transfered money out of this account into another account so the account is now overdrawn by £723.64. However, this is fast spiraling out of control. She is trying to pay this off to the tune of £140 per month - however, she doesn't have that kind of money!! I think she is paying at least £1 per day in charges but sometimes £5 at day. A lot of the time it is the charges to the account that is tipping her into unplanned overdraft. When I asked her why she hadn't said anything before she said she'd hoped she could sort it herself and that it would just go away!

What can we do to stop this vicious circle? I don't have the money to bail her out unless I borrow it. I've got her card so she can't spend on it anymore!

Any advice would be really appreciated.

Rea xx

Max_Maxwell

2rea22 wrote: »

I think she is paying at least £1 per day in charges but sometimes £5 at day. A lot of the time it is the charges to the account that is tipping her into unplanned overdraft.

The first step is to get the agreed overdraft increased. When going overdrawn but within your agreed o/d, Halifax charge £1pd regardless of the overdraft amount, so the most your daughter would be charged in any month is £31. If she goes overdrawn and outside of the agreed o/d, Halifax charge £5pd and that can be as much as £155pm and this is where I suspect your daughter is getting clobbered.

She needs to talk to the Halifax and explain her dilemma, and explain that if they increase the agreed overdraft she will be able to repay the debt more quickly and without running into futher financial trouble. Communciation is everything, the bank won't act unless approached.

rising_from_the_ashes

Glad she's finally opened up to you - I've been in her shoes and know how hard it is to try to speak to your parents ..... you feel like you've let them down.

I agree with Max that she needs to speak to the bank and agree either an increase in OD limit so she's not getting unauthorised fees added all the time (she'll hardly make any progress unless these are stopped!) - and an agreed repayment amount each week.

Try and sit down and do a new SOA with her and see how things lie ie does she actually have enough coming in to cover everything going out?

FireWyrm

I have to disagree here. This 'debt' is almost entirely made up of 'fees' which on an original unauthorised overdraft of just £14 is just plain unfair.

I would be going into the branch, I would be speaking to a personal advisor and I would be mentioning the words 'official complaint' and 'financial ombundsman' since this is plainly unfair fee practice. If they have any sense what so ever, they will cancel all charges. Considring that she did indeed pay off the original £14, but a matter of timing forced additional fees and that she is now being charged daily, the bank has a duty to deal with this immediately.

quantic

Speak to the bank, same thing happened to my friend recently, slightly overdrawn on an account and got £900 in charges over a period, when he spoke to them in the branch they took all the charges off and he only had to pay about £25 that he was mistakenly overdrawn.

beecher2

FireWyrm wrote: »

I have to disagree here. This 'debt' is almost entirely made up of 'fees' which on an original unauthorised overdraft of just £14 is just plain unfair.

I would be going into the branch, I would be speaking to a personal advisor and I would be mentioning the words 'official complaint' and 'financial ombundsman' since this is plainly unfair fee practice. If they have any sense what so ever, they will cancel all charges. Considring that she did indeed pay off the original £14, but a matter of timing forced additional fees and that she is now being charged daily, the bank has a duty to deal with this immediately.

Agree, but your daughter should be doing this rather than you. By all means go along for moral support, but your daughter needs to learn to deal with money problems herself to avoid this happening again.

FireWyrm

beecher2 wrote: »

Agree, but your daughter should be doing this rather than you. By all means go along for moral support, but your daughter needs to learn to deal with money problems herself to avoid this happening again.

I agree. I meant the daughter anyway. I was referring to 'I' as in if it were me and they had done this on my account etc...not necessarily the OP.

2rea22

Cheers guys! My daughter has got an appointment for Friday and I'm going along for moral support. Before we go we are going to get all the paperwork straight so she can explain her story in chronological order. I agree that she needs to learn some financial responsibility and the urge to beat her over the head for getting into this mess is almost overwhelming! However, I will be supportive and help her to do a budget that she can stick to! I've been there and done that myself - she's tried to sort it but it's snowballed out of control. I'm glad she's told me! I'll let you know how she gets on.