Is your agreement required for an overdraft?

Yardstick_2

My friend was very seriously ill in a Third World country two years ago, and needed cash for essential medical treatment. As she was unable to travel she saw no alternative but to entrust someone with her PIN number so that they could make a cash withdrawal from an ATM in a nearby town.

She assumed that the most they could withdraw would be the credit balance in her current account, but in actual fact the bank had given her an overdraft limit of £2,000 without her knowledge or agreement (they have been unable to produce any relevant correspondence, but now claim that they did not need her agreement in any case).

The person to whom she had given her PIN number was therefore able to clear her account up to the overdraft limit, but as they returned with the amount she had requested (keeping the rest for themselves) she was unaware that any theft had occurred until she returned to the UK and found herself £2,000 in debt to the bank.

The bank has refused to accept any liability (shared or otherwise) for this situation, have charged her monthly interest at the full overdraft rate (deducted from her current meagre income), and have even refused to consider converting the overdraft into a loan with a lower rate of interest.

Does anyone have any suggestions or advice about what she can do about this?

Thanks!

dunstonh

The bank has absolutely no liability.

She gave her PIN to someone else which is in breach of the banks terms and conditions and that has left herself open to this. If she forces the issue, the bank may withdraw card facilities from her to breaking the T&C and allowing this to happen.

Debt_Free_Chick

Yardstick wrote: »

As she was unable to travel she saw no alternative but to entrust someone with her PIN number so that they could make a cash withdrawal from an ATM in a nearby town.

Effectively, she gave her permission for this person to take money from her account.

She assumed that the most they could withdraw would be the credit balance in her current account, but in actual fact the bank had given her an overdraft limit of £2,000 without her knowledge or agreement (they have been unable to produce any relevant correspondence, but now claim that they did not need her agreement in any case).

The terms & conditions of the account almost certainly allow the bank to grant an overdraft. £2,000 might have been what they offered when the account when the account was opened; or the T&Cs may simply state that the overdraft will be whatever the bank decides "from time to time". However, the availabilty of an overdraft is not the issue here.

The person to whom she had given her PIN number was therefore able to clear her account up to the overdraft limit, but as they returned with the amount she had requested (keeping the rest for themselves) she was unaware that any theft had occurred until she returned to the UK and found herself £2,000 in debt to the bank.

This person has therefore stolen £2k from your friend.

The bank has refused to accept any liability (shared or otherwise) for this situation, have charged her monthly interest at the full overdraft rate (deducted from her current meagre income), and have even refused to consider converting the overdraft into a loan with a lower rate of interest.

The bank has no liability. The person is responsible for the theft. Unfortunately, your friend helped them to commit the theft by giving them access to her account. She could try the Police, but I doubt they would be interested - effectively, by handing over the card & PIN, your friend was effectively telling this other person "Help yourself"!

Has your friend approached this other person? Is there, perhaps, more to this story ....?