Accidental 0% Student bank overdraft 10 years after graduating

jmb1

Hi. Need some advice from those in the know. I graduated around 10 years ago from a masters degree as a mature student. I had an interest free overdraft facility of £1800. When I graduated id guessed it was renamed a graduate overdraft facility. The bank didn't say how long this facility would last but I assumed maybe a year.

10 years later, I still have it, Clearly a bank error. Yes, I've been a bit dishonest in not telling them I'm no longer a student or recent graduate but I can't afford to pay £1800, close the account, and be done with it and no one is none the wiser.

What I'm wondering is, IF I did get caught, say in a telephone conversation (I avoid calling them for this reason) if I was asked if I was still a student and told the truth rather than blatantly lie that I was, could/would they demand 10 years of overdraft interest from me??

I'm doing a good job of reducing my debts as a debt free wannabee so i'd rather concentrate on (slowly) paying off my interest-earning debts but I obviously wouldn't want to be lumber with a demand that would bankrupt me!

ses6jwg

This happened to me with Natwest, albeit I got 2 years extra free. Nothing happened.

As it's clearly their error, in my opinion its extremely unlikely they would demand 10 years worth of interest.

I'd just keep schtum and don't complain if it's ever spotted.

alanq

You say it is no longer a student account but a graduate account. You are and will remain a graduate will you not?

jmb1

alanq wrote: »

You say it is no longer a student account but a graduate account. You are and will remain a graduate will you not?

Hehe well quite. No, I assumed they mustve transferred it to some sort of 'graduate' account seeing as they didnt shut down my student overdraft facility but its still called a student account afaik.

CKhalvashi

ses6jwg wrote: »

This happened to me with Natwest, albeit I got 2 years extra free. Nothing happened.

As it's clearly their error, in my opinion its extremely unlikely they would demand 10 years worth of interest.

I'd just keep schtum and don't complain if it's ever spotted.

Please refer to the Limitations Act (c.58, 1980), and it's six years as a maximum.

Stay quiet, and try to put a few £ a week to one side to cover the OD. Fight the interest as maladministration.

CK

Fire_Fox

jmb1 wrote: »

Hi. Need some advice from those in the know. I graduated around 10 years ago from a masters degree as a mature student. I had an interest free overdraft facility of £1800. When I graduated id guessed it was renamed a graduate overdraft facility. The bank didn't say how long this facility would last but I assumed maybe a year.

10 years later, I still have it, Clearly a bank error. Yes, I've been a bit dishonest in not telling them I'm no longer a student or recent graduate but I can't afford to pay £1800, close the account, and be done with it and no one is none the wiser.

What I'm wondering is, IF I did get caught, say in a telephone conversation (I avoid calling them for this reason) if I was asked if I was still a student and told the truth rather than blatantly lie that I was, could/would they demand 10 years of overdraft interest from me??

I'm doing a good job of reducing my debts as a debt free wannabee so i'd rather concentrate on (slowly) paying off my interest-earning debts but I obviously wouldn't want to be lumber with a demand that would bankrupt me!

Are you using this as your main or only current account? If not they can generally call the whole debt in immediately, check the terms and conditions. Often graduate and student accounts must be your main or only account.

jmb1

Fire_Fox wrote: »

Are you using this as your main or only current account? If not they can generally call the whole debt in immediately, check the terms and conditions. Often graduate and student accounts must be your main or only account.

It's my main account. I do have another two accounts but they are unused and zero balance.

Fire_Fox

jmb1 wrote: »

It's my main account. I do have another two accounts but they are unused and zero balance.

Phew! I was reading that as you might have a permanent -£1800 balance so not using it. Agree with the others I'd make a serious effort to reduce the balance over a period of say nine months, and plead ignorance if they try to charge interest. If you have a lot of 'comings and goings' you could easily not notice whether interest was being applied.

ManWhoCan

I am in the same situation with Barclays. The account has since been converted to a joint account but still has a £1500 0% overdraft. My account started as a student account then was changed to a graduate account and for the last few years has been a plain 'Barclays Bank Account'. I recently added a 'Pack' to the account and received a letter with the terms of the overdraft. The letter stated:

Up to £1500 - Free
Over £1500 - 0%

I always considered it to be their mistake but I am slightly worried now that they are going to ask for interest for the last few years. Should I tell them?

212

To be honest, banks lose so much in bad & doubtful debt that I doubt they'd care about a few years interest on 1.8k. They wouldn't be able to charge you the full whack as it's partly their error, so even at say 10% a year (which I doubt they'd try for or even get if you appealed) for the 10 years it's ~2k and not worth the hassle of them claiming it - and since an O/D is unsecured debt, if they doubled what you owed and demanded it back, and you went into say bankruptcy, they'd get nothing/very little anyway.

You just have to be very careful not to lie if they ask you - as that could potentially be logged and shared and destroy your chances of getting credit (and even insurance) in future.

If it was me, if they said something like are you a student, just say something along the lines of 'no, why?'. And if they don't ask... don't tell!

jmb1

Thanks for replies, I guess I'll just keep mum