First Direct bank charges :-(

pauljoecoe

Before I start I am aware this was a mistake of my own making so please refrain from 'holier than thou' comments.

Last month due to a moving money around error i was overdrawn by £1200 for one day. However, there was £57,000 in my savings accounts which are all linked via my offset mortgage.

FD have charged me £25 for this indiscretion. I am surprised to discover FD do not offer a automatic sweeping facility for situations like this. My previous accounts at Intelligent Finance did.

When all 3 accounts I have with FD (current and 2 savings) are all linked to my offset mortgage which and there is plenty of equity in that account too it seems ridiculous to charge £25 for 1 day overdrawn.

I have asked FD to refund the charge but we shall see...

I have been a 100% fan of FD for the last 4 years. This is my first moan about them. Just wanted to vent!

opinions4u

IF had a very unusual offsetting model which, given that the brand is being run down, appears to have been flawed.

I am surprised to discover FD do not offer a automatic sweeping facility for situations like this

Why? Did they ever suggest they had the facility?

YorkshireBoy

A quick check of your T&Cs seems to indicate there's no "informal overdraft request" charge for the first request in the last 6 months. So it doesn't sound like this was your first request?


I was going to suggest you make a "formal overdraft request" in order to avoid charges for future mistakes, but since you've already made an "informal overdraft request" they'll charge you £25 for this...and it doesn't sound like that would go down well!

Hominu

Your savings account is linked to your offset mortgage for the purposes of interest only. If you go overdrawn on your current account more than your formal overdraft amount and more than once in a 6 month period then you'll be charged £25 for a 'setup fee'.

So this must be the 2nd overdraft in the last 6 months.

I don't know if its still the same but FD use to apply the setup at night, so if you setup a formal overdraft before 3:30pm, you didn't get charged anything (a bit late for this now however).

pauljoecoe

Hominu wrote: »

Your savings account is linked to your offset mortgage for the purposes of interest only. If you go overdrawn on your current account more than your formal overdraft amount and more than once in a 6 month period then you'll be charged £25 for a 'setup fee'.

So this must be the 2nd overdraft in the last 6 months.

I am not aware that i have been overdrawn before. I must admit I have never really looked into FD charges before as I never thought I'd be in position to incur them. I shall just keep a £10K buffer in the account from now on to be safe. Thats the annoying thing...as all accounts are offset against the mortgage it really doesn't matter where the money is. I only keep the money in separate accounts to differentiate in my mind what is 'savings' and what is everyday spending.

edit: just checked..and you are right I did go overdrawn, again for one day by £600. Damn....ah well, you live and learn!

opinions4u wrote: »

IF had a very unusual offsetting model which, given that the brand is being run down, appears to have been flawed.

Why? Did they ever suggest they had the facility?

No...it just seems a simple and obvious thing to offer.You can set up a automatic sweep of a set amount at a certain date each month. Why not have the option of an automatic transfer of funds from savings to current if the current dips below a set amount. Thats what IF did.

The downside for FD is that they only benefit from the interest of the mortgage (3.69%) (one day on £1200 in this case) as apposed £25!

pauljoecoe

GOOD NEWS! FD have agreed to refund the £25 as a gesture of good will.

I still think this is a stupid and unfair charging system. Calling a temporary dip into the red an request for an 'informal overdraft' is ridiculous. I'd rather be charged interest even if it was fairly high. As this was caused by a payment into another account owned by me then I'd rather they'd just not paid it.

But credit where it's due, FD have come up trumps on customer service once again.

Gromitt

They don't charge a formal overdraft setup fee, so if you had a £1500 overdraft, this would never had occured, you would have just been charged a small amount of interest.

Personally however, I prefer to just use the £250 standard overdraft and keep at least £500 in the account at all times. That means I have £750 towards unexpected expenditure. Yes I can probably increase my £250 overdraft to £750 and put the £500 in a savings account, but that gives me about 83p/month gross, not worth bothering about.

Note that they'll only refund the £25 charge once, so don't let it happen again