Abbey O/D charge LoopHole

MckAl

On April 1st I checked my Abbey current account to find out I had been charged for breaching my O/D limit on about 13 occassions, £20 a pop. I thought that there was a £50 buffer at the end of my O/D limit similar to my HSBC account, oops.

Anyway, I rang the Complaints Dept. to see what they could do and they offered me a small reduction and referred me to their Tariff of Charges which states £20 for every breach (now £30 as of April 1st I think). However, I found this paragraph on in the 'Legal Stuff' section on the Abbey current account website:

"If the unauthorised overdrawn amount does not exceed £50, you will not be charged a fee, just interest at the unauthorised rate. The £50 limit is subject to status and does not apply to cash withdrawals. You will be expected to bring the account back up to the authorised position."

http://www.abbey.com/index/cash/current_accounts_index/abbey_account_index/abbey_account_t-and-c.htm
This paragraph was still there at time of posting, however likely to be removed v. soon.

I rang back the complaints manager after advising I was about to contact the Financial Services Authority and Office of Fair Trading to discuss this matter. The paragraph contradicts the Tariff of Charges and thats a breach of Trade Descriptions......etc etc.

She first contested that I had read the passage out of context which I disagreed, could not be any more plain to me. She then offered to refund all charges caused by only breaching my limit by less than £50. With a bit more persuasion, all charges were dropped!

Seems to me this paragraph may be perfect way of getting a refund on any recent O/D charges levied by the Abbey. They were very embarrassed about it and probably hoped to cover it up!

davidcampbell

The £50 limit is subject to status

the £50 buffer zone on the abbey account was withdrawn sometime last year (april 2004 sounds familiar?) so that statement should have been removed long ago from the website


however, it is undeniably clear that it is subject to status and so that is why you were still charged.


DC

bargains83

davidcampbell wrote:

the £50 buffer zone on the abbey account was withdrawn sometime last year (april 2004 sounds familiar?) so that statement should have been removed long ago from the website


however, it is undeniably clear that it is subject to status and so that is why you were still charged.


DC

the buffer zone has indeed been withdrawn, but was replaced by a new policy.

I recieved a letter from them at the end of last year which said that they would still pay any transaction which took me over my overdraft limit by upto £50 and wouldn't levvy any charges for going unauthorised overdrawn providing I hadn't already unauthorised overdrawn my account within the last 6 months

This new policy applies to all Abbey customers even if you don't have an authorised overdraft.

They No longer run the buffer zone and the T&C's quoted by the OP reffer to this new policy. Therefore IMO abbey were quite right to charge him unauthorised fees on this occassion.

davidcampell, I think you have been lucky to get away with the fees here and I would not see this as a loophole for people to overdraw their accounts.

MckAl

I was very lucky to get out of these charges. Im sorry if I wasn't clear, the reason for posting was not to provide people with an excuse for breaching their O/D and getting away with it. I personally do not believe the charges banks levy for breaching an authorised O/D limit are at all justifiable in terms of the costs they accrue.

To my knowledge the banks have not enforced these charges in a court case, they have always backed down when challenged. Furthermore, the Liberal Dem.s are campaigning on this issue, legally banks are able to levy a justifiable charge not a penalty, a £20 O/D charge is a penalty.

These charges should be contested, the more people that do so, the more attention the banks will have to take.

Paul_Varjak

Does anyone know how much money the banks make from people going a 'little' overdrawn?

Yet overdrafts cost nothing to arrange, so if your bank is prepared to give you one, then you may as well have one! And if you do go overdrawn (along as you stay within the limits) then, not only do you suffer no 'penalty fees you usually pay less interest as well!