Nat West withdraws overdraft

Jools63

Hi I am new here so I hope I am doing things right. If not just let me know.

Me and my husband recently had notification that suddenly and for no apparent reason our overdraft limit with Nat West was to be reduced by £950 on the 4th December. As you can imagine - this is going to cause us financial difficulties as we reach our limit every month.

We have been trying to negotiate with the bank for the past 3 weeks. We cannot find out who in the bank authorised the reduction or indeed why they were reducing our limit in the first place.

We offered to reduce the overdraft gradually (£50 per month) but this was dismissed.

After another visit to our local branch and yet another batch of phone calls today - they have suggested that they lend us £950 which we can repay at £55 per month. However, this suggestion does not guarantee that our loan application will be successful as we have other debt commitments. We will not find out until the 2nd of December if our loan application has been agreed - and if it has not this leaves us two days to find an alternative solution.

Can anyone suggest where we can go from here. We have contacted the financial ombudsman who has told us that Nat West have every right to reduce the overdraft limit - but they have sent a letter of complaint to the bank. We have lodged a complaint directly with the bank ourselves - but as yet nothing has come back.

Surely as a responsible lender - Nat West have a responsibility to help us to avoid going over our overdraft limit and accruing additional charges.

Any suggestions would be greatly appreciated.

DevCoder

No, they can call in the credit line when they wish.

Theres a moral line that they shouldnt reduce the credit limit to a point below what you are currently overdrawn but this is down to them and would not seem to apply to yourselves as you are under the credit limit (ie your overdraft) at present.

Sorry but thats the current climate, the banks will be constantly monitoring their liquidity ratios and reducing what they forsee as potential bad debt.

There is responsible lending and responsible borrowing, the credit line is normally a short term facility extended by banks (or at least it should be viewed as such by borrowers and should not be contantly used). The exception is an agreed credit facility backed by collateral which overdrafts tend not to be.

DevCoder

My suggestion is

If you have already submitted a loan request then wait for their response, do not apply for further credit.

Even if the above, then post on the debt free wannabe section of this forum, constantly dipping into your overdraft by £900 indicates spending beyond your means.

When posting there, use the Statement of Affairs calculator to dhow what your income and outgoings are.

There are extremely helpful people on that subforum who will help to reign in your spending so you are not constantly using an overdraft facility.

Thrugelmir

Jools63 wrote: »

After another visit to our local branch and yet another batch of phone calls today - they have suggested that they lend us £950 which we can repay at £55 per month.

Time to take your budget apart and make savings.

maninthestreet

Post your Statement of Affairs (monthly income / outgoing, savings and debts) on the Debt Free Wannabe for advice.

pmduk

Jools63 wrote: »

Surely as a responsible lender - Nat West have a responsibility to help us to avoid going over our overdraft limit and accruing additional charges.

Being a responsible lender means ensuring that people you lend to have the means to repay. It follows that a responsible lender will sometimes say no to further lending, which is exactly what natwest have done.

People complain on here occasionally that their bank has pulled the plug on their overdraft without notice. Natwest gave you several weeks notice.

As others have said, the answer is to cut down expenditure. In the long run it may be Natwest have helped you get back on track. (I appreciate it won't seem like that now.)

Jools63

Thanks for the advice everyone. I will try the debt free wannabe section as suggested.

According the natwest they are reviewing everyone's credit limits - as you said in your post krisdorey.

Thanks again everyone.

stclair

Jools63 wrote: »

Thanks for the advice everyone. I will try the debt free wannabe section as suggested.

According the natwest they are reviewing everyone's credit limits - as you said in your post krisdorey.

Thanks again everyone.

They best not be reviewing mine...

The removal of overdrafts are generally system generated depending on how an account has been managed and feeds from the CRAs.

If they get shirty with you remind them of number six of the customer charter:

6) We will be proactive in doing what we can to help customers who may be facing financial difficulty.

You could set up a repayment plan with them;

http://www.natwest.com/personal/repayment-service.ashx

Sharon87

I would suggest if your loan does get refused, have you got another bank account elsewhere? If so change it so your pay goes into these accounts so it doesn't get gobbled up by the overdraft reduction. If not open a basic account and use that for everything.

Then your Natwest account will be overdrawn, you'll incur fees and credit rating wont be good, but you may be able to negotiate with Natwest a debt repayment plan and try and get them to freeze interest and charges.

This is the worst case scenario. But as others have said get over to Debt Free board and people can make suggestions on how to improve your budget and make savings.

Good luck!

meer53

If they've offered a loan to repay the overdraft, it will probably be agreed as it's not technically new lending, it's just restructuring the overdraft. But be aware that a condition of the loan will probably be that you have no overdraft at all so you will really have to look at your budget to avoid ending up in the same position again. You're obviously spending more than you have coming in, post a SOA for help.