Unarranged Overdrafts and Charges

NeverGoEuropcar

Hi all,

I need some help, I'm trying to help my 18 year old son to manage his finances he takes little or no responsibility at the moment and I can see he is going down a path of credit and debt.

Anyway i'm sitting here quite perplexed at the minute as his bank has allowed him to go overdrawn and then whacked the £25 charge onto his account, I've talked him through appealing to their good nature to remove the charge as it is the first time this has happened so I think he stands a good chance of having it removed.

What makes me so angry though is that they have let him go overdrawn using his cash card, so it wasn't even a DD that has put him into this negative balance and they then whack the £25 charge on if he hasn't paid this back within 24 hrs, if he wants to put a facility on his account so this cant happen he has to pay them a monthly fee of something like £10 a month.

I just cant see how this is fair, can anyone help with advice?

In addition does anyone know of a free resource that my son can use to help give him financial discipline? He isn't listening to me, it might be a parent child thing but I wonder if he talked it through with someone else if it would help?

Any help appreciated

Thanks

dunstonh

Anyway i'm sitting here quite perplexed at the minute as his bank has allowed him to go overdrawn and then whacked the £25 charge onto his account

Bank staff do not accompany him when he goes spending. The bank cannot stop many transactions going through (e.g. debit card transactions below store floor limit)

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NeverGoEuropcar

Oh believe me I have spent hours explaining it, he doesn't listen, anyone that can help me with advice to get kids sorry young adults to listen please say so.

The bank is letting him, when I was his age I couldn't go overdrawn unless I arranged an overdraft I taught myself once the money was gone it was gone.

Please explain to me how the banks are being responsible if they charge someone a monthly fee not to prevent unarranged overdrafts? Sorry in my book this is as irresponsible as him spending.

Your comments weren't helpful, I already know what you have told me the advice I am looking for is if anyone has any idea of a financial institution that doesn't penalise people or helps prevent them spending money they have not got.

Atidi

NeverGoEuropcar wrote: »

Oh believe me I have spent hours explaining it, he doesn't listen, anyone that can help me with advice to get kids sorry young adults to listen please say so.

The bank is letting him, when I was his age I couldn't go overdrawn unless I arranged an overdraft I taught myself once the money was gone it was gone.

Please explain to me how the banks are being responsible if they charge someone a monthly fee not to prevent unarranged overdrafts? Sorry in my book this is as irresponsible as him spending.

Your comments weren't helpful, I already know what you have told me the advice I am looking for is if anyone has any idea of a financial institution that doesn't penalise people or helps prevent them spending money they have not got.

Maybe have a look at a local building society offering a traditional passbook account?

He'll still be able to have payments (e.g wages, benetfits, etc)paid in but won't have access to debit card facilities or direct debits as those are the kind of services that allow him to spend what he doesn't have.
He won't get access to a pewrsonal cheque book either, not that they are used much nowadays, but if he does happen to require the odd cheque (and he has the funds to support it) then he could get a counter cheque which will usually be free with such an account

He should even get a tiny amount of interest on his deposits which may help him to get into the saving habit too :beer:

dunstonh

The bank is letting him, when I was his age I couldn't go overdrawn unless I arranged an overdraft I taught myself once the money was gone it was gone.

But we didnt have debit cards or electronic means that could get around checks. Although we did have cheque guarantee cards and you could go amok with those. However, you typically didnt as there was a lot more responsibility 25 or so years ago.

Please explain to me how the banks are being responsible if they charge someone a monthly fee not to prevent unarranged overdrafts? Sorry in my book this is as irresponsible as him spending.

The banks have no means to stop small transactions going through. As I said above, you could do this 20-30 years if you wanted to with guarantee cards. You are given facilities on the basis of trust and an agreement to use them correctly. However, if you abuse that trust and take money that is not yours then you will be charged. If your son lacks the awareness and responsibility then either you force him to change accounts to something that doesn't have a credit facility or just let him make his own mistakes. He will soon enough realise the consequences of his actions once he starts looking for mortgages and lenders wont touch him because his bank account shows poor money management.

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Basically, if he is as unruly as you suggest then he should stop having a current account and move to a deposit account instead. These have no facilities to take him overdrawn. He wont get a debit card, cheque book or be able to do direct debits/standing orders but then he doesnt have the maturity for those things. So, perhaps that is what he needs to hear.

TheMoney

Being charged for an account that doesn't allow you to go overdrawn is ridiculous, no bank I'm aware of would offer that. All he needs is a basic bank account, with only a cash card so only ATM withdrawals can be made. As mentioned previously, every merchant has a floor limit, which for example if that is set at £10, any transaction made under £10 in their store won't be checked with the bank first to ensure sufficient funds. There are also other situations involving debit cards that can lead an account overdrawn despite to overdraft on the account. All it boils down to is responsibility, banks cannot manage your account for you. Let him get in debt, let him turn to payday loan companies, let him learn the hard way if he won't listen.

NeverGoEuropcar

TheMoney wrote: »

Being charged for an account that doesn't allow you to go overdrawn is ridiculous, no bank I'm aware of would offer that. All he needs is a basic bank account, with only a cash card so only ATM withdrawals can be made. As mentioned previously, every merchant has a floor limit, which for example if that is set at £10, any transaction made under £10 in their store won't be checked with the bank first to ensure sufficient funds. There are also other situations involving debit cards that can lead an account overdrawn despite to overdraft on the account. All it boils down to is responsibility, banks cannot manage your account for you. Let him get in debt, let him turn to payday loan companies, let him learn the hard way if he won't listen.

HSBC charge for it...

Thanks for the reply, he lives under my roof so i'm trying to prevent him getting into debt. I recognise he needs to learn himself and negative experience normally does the trick, i'm just making sure the rest of us dont suffer as a result

Atidi

NeverGoEuropcar wrote: »

HSBC charge for it...

Then get him to ditch and switch