Hsbc...

matttye

Gromitt wrote: »

If you don't agree to it, keep your money in separate banking groups. For example, Santander and Lloyds TSB.

Typically savings accounts used to offer a more competitive rate than a current account, but now its the other way around. I guess they didn't want you earning 7% and just asking them to transfer to your current account when bills/etc are due. You'd have to do that yourself.

I do exactly that!

Caladan wrote: »

I find your posts are well thought out and informative and thank you for them, I will argue this point though.

The right of set-off is the right to balance an overdue debt against a credit balance. As the bank has agreed to provide the overdraft facility (albeit informally) the debt is not overdue. The customer has requested the overdraft by authorising payments out of the account without sufficient funds in the account to settle them. This is a point of contention, and I'm in mixed minds as to whether or not it's right, but on balance I believe it is.

Also - The customer may have the funds in the other accounts for a specific purpose, such as a cheque issued or an electronic payment waiting to be sent. As the bank is not concerned about the credit worthiness of the customer at this stage (hence allowing the informal overdraft) it could be considered unreasonable for it to start setting off the debt.

Hope this post makes sense, it's Friday after all.

Kind regards,
Cal

Your second point is a good one, but I have some points to make on the first. A customer may have authorised a payment to go out by way of a continuous payment authority, but more than likely the vast majority of the time they would not have authorised that specific payment. If they had, they would surely have money in the account to cover it.

Usually people go overdrawn when something unexpected goes out of their account. It's unlikely anybody would knowingly authorise a payment which will take them into an unauthorised overdraft, knowing how much banks charge for such facilities.

So what I'm trying to say is, whilst the payments are classed as authorised, the customer may not actually know about them coming out.

Here's an idea though; why not give us the option?

I'll give you two examples that have happened to me personally.

1) I signed up for an Amazon Prime one month trial without reading that Amazon will automatically take a £49 payment to cover the service for the year, if I don't cancel within the 30 days. I didn't even have to enter any bank details, being as it was my Amazon account and they were already saved.

2) My car insurance automatically renewed at the end of the year. Again, had no idea this was going to happen.

Both of those payments were 'authorised' but I had absolutely no idea about them until they came out. This has shown me the importance of reading the bloody small print However, even now I don't do this for everything - who has time?

Caladan

I'll try to respond point by point based on my own personal opinion and experiences

matttye wrote: »

Your second point is a good one, but I have some points to make on the first. A customer may have authorised a payment to go out by way of a continuous payment authority, but more than likely the vast majority of the time they would not have authorised that specific payment. If they had, they would surely have money in the account to cover it.

Usually people go overdrawn when something unexpected goes out of their account. It's unlikely anybody would knowingly authorise a payment which will take them into an unauthorised overdraft, knowing how much banks charge for such facilities.

CPAs are a horrible thing, and I try to discourage customers from using them unless they have to (I have a couple myself in fairness, but it's companies I know and trust). I would argue that although people may not know a payment will take them overdrawn, they will generally know that the payment is due, therefore it's a lack of planning rather than a lack of information that takes the account over. I'm open to debate on this an fully aware it's not always the case.

matttye wrote: »

Here's an idea though; why not give us the option?

I'll be brutal here - At what point does the bank give the customer the option? Is it when the payment goes out taking the customer overdrawn and the bank has to call the customer to confirm (costing the bank money and time) or is it it before the payment goes out but the bank reasonably expects it to (also costing the bank by way of investment in technology to anticipate such transactions in Advance, impossible in the case of debit card CPAs/payments)?

Or does the bank call the customer to let them know a payment has gone out and would you like them to transfer the funds for you? Even then, the phone call and staff time etc cost money.

I don't disagree, and with todays technological abilities I reckon a quick, and free, text would be reasonable to let the customer know something is up, but once real people get involved it's actually very expensive.

matttye wrote: »

I'll give you two examples that have happened to me personally.

1) I signed up for an Amazon Prime one month trial without reading that Amazon will automatically take a £49 payment to cover the service for the year, if I don't cancel within the 30 days. I didn't even have to enter any bank details, being as it was my Amazon account and they were already saved.

2) My car insurance automatically renewed at the end of the year. Again, had no idea this was going to happen.

Both of those payments were 'authorised' but I had absolutely no idea about them until they came out. This has shown me the importance of reading the bloody small print However, even now I don't do this for everything - who has time?

This is a difficult one, if I were to toe a proverbial company line I would say yes, you should have read the small print and/or accepted general industry standards (especially with the car insurance). In fact, I'm rather tired and don't want to argue this point but I reckon for car insurance you wouldn't have a leg to stand on.

For CPAs/contracts on websites I'm very sympathetic - The small print is small, the terms are long and arduous and no one really knows where they stand unless they have far too much time on their hands. I've written off a lot of money as goodwill payments for customers who've fallen into this trap even though the bank isn't actually at fault just because the way these things works is an absolute joke. Nevertheless, as I say, the bank isn't actually at fault.

I guess it's kind of like legal matters - ignorance isn't an excuse.

If I haven't made myself very clear or if I've sounded a bit offensive in this post I didn't mean to, I've had a few too many mojitos tonight

Kind regards,
Cal

pmduk

matttye wrote: »

I signed up for an Amazon Prime one month trial without reading that Amazon will automatically take a £49 payment to cover the service for the year, if I don't cancel within the 30 days. I didn't even have to enter any bank details, being as it was my Amazon account and they were already saved.

If you haven't used the prime benefits since the end of the trial, Amazon will usually refund the fee.

rb10

matttye wrote: »

I wonder why banks can only use the 'right to set off' when it benefits them and not the consumer.

There are issues in the event of fraud that make this a bad idea.

If the bank was to top up your current account aftereach transaction, it would give a fraudster essentially unlimited access to yohr savings.

Minimum balance text alerts are far safer.

JournalGirl

OP, I don't know if HSBC do this, but their sister bank, First Direct, offer a free text messaging service. Mine is set to let me know when I am within £200 of my overdraft limit. It works a treat, and has saved my bacon a few times, allowing me to transfer money in from one of the other accounts.

And because they are all liked to my offset mortgage it doesn't really matter which account the money is in for interest purposes.

matttye

Caladan wrote: »

I'll try to respond point by point based on my own personal opinion and experiences



CPAs are a horrible thing, and I try to discourage customers from using them unless they have to (I have a couple myself in fairness, but it's companies I know and trust). I would argue that although people may not know a payment will take them overdrawn, they will generally know that the payment is due, therefore it's a lack of planning rather than a lack of information that takes the account over. I'm open to debate on this an fully aware it's not always the case.

I quite agree with you that it's often due to bad planning. That said, I had absolutely no idea about either of the transactions I mentioned in my previous post. I note you responded to those later in your post, so I'll reply to those parts later.

Caladan wrote: »

I'll be brutal here - At what point does the bank give the customer the option? Is it when the payment goes out taking the customer overdrawn and the bank has to call the customer to confirm (costing the bank money and time) or is it it before the payment goes out but the bank reasonably expects it to (also costing the bank by way of investment in technology to anticipate such transactions in Advance, impossible in the case of debit card CPAs/payments)?

A simple option that can be turned on/off by the customer at will via internet, telephone or in-branch banking.

It could work as follows; bank checks if customer has sufficient funds in another account to cover the cost of a payment that will take them into an unauthorised overdraft. If he/she does, funds are transferred either before or after the transaction. Bank could waive the charges if it knows the money is coming back in straight away.

Caladan wrote: »

Or does the bank call the customer to let them know a payment has gone out and would you like them to transfer the funds for you? Even then, the phone call and staff time etc cost money.

I don't disagree, and with todays technological abilities I reckon a quick, and free, text would be reasonable to let the customer know something is up, but once real people get involved it's actually very expensive.

I'm suggesting it could all be done automatically. In theory, as all accounts are held with the same bank (I am only suggesting this would work with multiple accounts with the same bank), any transfers between accounts should be instant, so no need for any human interaction.

Caladan wrote: »

This is a difficult one, if I were to toe a proverbial company line I would say yes, you should have read the small print and/or accepted general industry standards (especially with the car insurance). In fact, I'm rather tired and don't want to argue this point but I reckon for car insurance you wouldn't have a leg to stand on.

I don't deny I was ignorant to the situation, but again it's this 'small print' way of doing things I don't like. I only passed my driving test in October 2010. My first car insurance company (eCar) didn't automatically renew my policy.

My second one (Admiral) sent me a 'renewal reminder' email which, as usual, contained a massive wall of text, and somewhere in the middle was the part that said 'To ensure your renewal is handled quickly and efficiently, Admiral will, with your continued permission, debit the account we have on file shortly after your renewal date.'

Such important information should be at the top, in bold. I.e. "If you wish to renew your policy with us, you do not need to do anything. We will automatically renew your policy on dd/mm/yyyy unless you instruct us not to do so."

Industry standards aren't always apparent to those new to the industry.

Caladan wrote: »

For CPAs/contracts on websites I'm very sympathetic - The small print is small, the terms are long and arduous and no one really knows where they stand unless they have far too much time on their hands. I've written off a lot of money as goodwill payments for customers who've fallen into this trap even though the bank isn't actually at fault just because the way these things works is an absolute joke. Nevertheless, as I say, the bank isn't actually at fault.

I guess it's kind of like legal matters - ignorance isn't an excuse.

I quite agree. I just think the pertinent information, especially regarding debiting of accounts, should be made to stand out. NOBODY has time to read thoroughly every single agreement they sign.

pmduk wrote: »

If you haven't used the prime benefits since the end of the trial, Amazon will usually refund the fee.

Yes, that's exactly what happened. It's just lucky that I had enough money to cover expenses when this came out!

rb10 wrote: »

There are issues in the event of fraud that make this a bad idea.

If the bank was to top up your current account aftereach transaction, it would give a fraudster essentially unlimited access to yohr savings.

Minimum balance text alerts are far safer.

True!

ColdIron

matttye wrote: »

A simple option that can be turned on/off by the customer at will via internet, telephone or in-branch banking.

It could work as follows; bank checks if customer has sufficient funds in another account to cover the cost of a payment that will take them into an unauthorised overdraft. If he/she does, funds are transferred either before or after the transaction. Bank could waive the charges if it knows the money is coming back in straight away

Matttye, have you any idea how much this would cost? It would be eyewateringly expensive

Even the simplest change will involve a minimum of a 12 month project once you factor in cost benefit analysis, risk assessment, compliance, budget approval, the design cycle, software development, internal quality assurance, bug fixing, end user acceptance, rollout and training

Most banking and financial systems are an unholy alliance of disparate systems, some up to 20 years old, running on different platforms all held together by scores of messaging systems to keep the whole show on the road

What you suggest approaches a complete re-write that benefits the bank by precisely zero, particularly when the alternative solution is for the end user to stay on top of their affairs

I don't mean to be harsh but the stark realities of commercial software systems are hard to ignore

matttye

ColdIron wrote: »

Matttye, have you any idea how much this would cost? It would be eyewateringly expensive

Even the simplest change will involve a minimum of a 12 month project once you factor in cost benefit analysis, risk assessment, compliance, budget approval, the design cycle, software development, internal quality assurance, bug fixing, end user acceptance, rollout and training

Most banking and financial systems are an unholy alliance of disparate systems, some up to 20 years old, running on different platforms all held together by scores of messaging systems to keep the whole show on the road

What you suggest approaches a complete re-write that benefits the bank by precisely zero, particularly when the alternative solution is for the end user to stay on top of their affairs

I don't mean to be harsh but the stark realities of commercial software systems are hard to ignore

I'm not suggesting they should actually go ahead and implement it, just asking if there are reasons "why not" - to which I've had plenty of responses

Gromitt

Bank could waive the charges if it knows the money is coming back in straight away

Most do that anyway - with some if the account is in credit by 3:30pm, then they don't care about transactions which made it overdrawn during the day.