Bank Charges Passed to Debt Collectors - Help Please!!!

catabel

Five years ago I had a direct debit come out of my account, that left me £4 overdrawn. As I had no overdraft set up they said it was an 'illegal overdraft' and gave me a £20 charge on top of this. I was very young (17), at the time and stupidly thought it would all just go away.

I then moved away from home (family problems) and about 8 months later, after getting in back in touch with my family found out that for about a number of months, Natwest had been charging me £6 a day without my knowing for this 'illegal overdraft' that I had completely forgotten about! They said that I owed them over £600 for this initial £4 charge. After speaking to someone on the phone they agreed to reduce the fee to £285 if I paid it that day. I missed the bank that day and paid the £285 the following day without realising that they would charge me another £6 for another day that I was in my overdraft (I assumed they had put a stop on it because of our conversation) and the whole cycle started again.

The debt has now been passed on to a debt collection agency is at £1095! Please can someone help advise as to what I should do - this situation is literally ruining my life! I have had no contact with anyone about it since 2010.

[Deleted User]

Go to the Citizen's Advice Bureau and see a Debt specialist.

tripled

Put in a written letter of complaint demanding the money you paid back except for the £4 you owed them and that the charges be written off. If they do not agree, take them to the ombudsman or the small claims court.

Meanwhile, this quote taken from the CAB Website may help alleviate some of your stress.

You can borrow money at any age, but access to loans may be limited because a lender will not usually be able to take a young person to court if they break the terms of a loan. This is because you cannot usually be legally held to a contract you make when you are under 18.

I went through a similar thing a few years ago for a debt of 63p with Natwest. They only took note when I made a formal complaint couple with a request for my information and charges under the Data Protection Act. The 63p was ultimately written off by them (along with a couple of hundred pounds worth of charges) "as a gesture of goodwill".

meer53

tripled wrote: »

Put in a written letter of complaint demanding the money you paid back except for the £4 you owed them and that the charges be written off. If they do not agree, take them to the ombudsman or the small claims court.

Meanwhile, this quote taken from the CAB Website may help alleviate some of your stress.

I went through a similar thing a few years ago for a debt of 63p with Natwest. They only took note when I made a formal complaint couple with a request for my information and charges under the Data Protection Act. The 63p was ultimately written off by them (along with a couple of hundred pounds worth of charges) "as a gesture of goodwill".

The OP has already had an offer of goodwill from the bank, they agreed that they could repay £285 instead of £600 !

Your advice isn't very good, and "demanding" refunds of charges is definitely not the way to go about this. The OP admits to not speaking to anyone for the last 4 years, they're going to really struggle to get any reduction in the amount currently owed.

The OP should contact Stepchange for advice.

tripled

I don't see how "only" charging fees of £281 for a £4 debt is "goodwill". Given the fact the OP was under 18 when they went £4 overdrawn, it is unlikely the debt itself is enforcable in any way, much less the charges. The fact that the OP paid them anything is "goodwill" in itself.

Based on the facts given, I stand by my advice that a written letter of complaint is the way to go here, aiming to get the £281 refunded. In my opinion your advice, to go to a charity that helps with debt management, is poor. The OP should not be paying Natwest anything further.

While the OP may have been naive in ignoring the debt, this isn't a case where someone has been on a spending spree and is trying to avoid paying it back, the OP has already paid this "debt" back 72 times over.

DevCoder

There is a difference between an under 18 being held to the contract of a loan and an under 18 incurring charges.

You couldn't have an authorised overdraft as that's the bank extending a line of credit, but a penalty fee for unauthorised debt is not a contract of credit.

Meer is giving the correct advice, they should be contacting StepChange for advice, they will advise how to proceed with negotiating with the bank. "Demanding" is not going to get anywhere except getting the banks backs up and then any further goodwill gesture will be non-existant.

tripled

The contract upon which they are basing these charges is one agreed when the OP was under 18. The charges themselves are unlikely to be enforcable.

I will concede my wording could have been better, when writing a complaint I agree you would not write "I demand". However, the OP should write to them, explaining the grounds for complaint (they dispute the charges), their reasoning (the charges are unenforcable and excessive) and their expectations (the account and charges be frozen with immediate effect, and ultimately that the file be closed and £281 be refunded).

Based on the response they get, the OP can then decide how to proceed. If an outright rejection, I would at that point suggest appealing to the ombudsman, and emailing a couple of newpapaer money columnists to see if they'll consider taking it up (the under 18 angle in particular might interest them). If they refund the OP then all is well. If their response falls somewhere in the middle (a partial refund or lower settlement figure) the OP would need to decide whether or not to fight the good fight or accept the settlement.

Of course the other option is for the OP to bury their head in the sand for two or three more years - not a course I'd necessarily recommend, but unless the bank takes the OP to debt on what is (in my opinion) legally questionable ground then the debt would become stature barred anyway.

Edit: I will add I am assuming the OP is in England/Wales with regards to the debt being legally enforcable and time limits.

meer53

tripled wrote: »

The contract upon which they are basing these charges is one agreed when the OP was under 18. The charges themselves are unlikely to be enforcable.

I will concede my wording could have been better, when writing a complaint I agree you would not write "I demand". However, the OP should write to them, explaining the grounds for complaint (they dispute the charges), their reasoning (the charges are unenforcable and excessive) and their expectations (the account and charges be frozen with immediate effect, and ultimately that the file be closed and £281 be refunded).

Based on the response they get, the OP can then decide how to proceed. If an outright rejection, I would at that point suggest appealing to the ombudsman, and emailing a couple of newpapaer money columnists to see if they'll consider taking it up (the under 18 angle in particular might interest them). If they refund the OP then all is well. If their response falls somewhere in the middle (a partial refund or lower settlement figure) the OP would need to decide whether or not to fight the good fight or accept the settlement.

Of course the other option is for the OP to bury their head in the sand for two or three more years - not a course I'd necessarily recommend, but unless the bank takes the OP to debt on what is (in my opinion) legally questionable ground then the debt would become stature barred anyway.

Edit: I will add I am assuming the OP is in England/Wales with regards to the debt being legally enforcable and time limits.

You're missing the point. The OP has already disputed the charges with the bank. They've already agreed to a goodwill refund, possibly taking into account the OP's age, We don't know do we ?

The OP is no longer 17, they're an adult. It doesn't matter how the debt has accrued, it's debt, they owe money to the bank. Money which has been correctly applied to their account.

The OP is at fault here by not making sure that the account was cleared and then closed. The OP will have received letters about the amount owed, nothing here is legally questionable, i don;t see why you think it is ?

tripled

meer53 wrote: »

The OP has already disputed the charges with the bank. They've already agreed to a goodwill refund, possibly taking into account the OP's age, We don't know do we ?

They haven't refunded anything. They offered to let the OP pay a reduced settlement if paid within a given timescale, but the OP did not meet that so it's irrelevant.

meer53 wrote: »

The OP is no longer 17, they're an adult. It doesn't matter how the debt has accrued, it's debt, they owe money to the bank. Money which has been correctly applied to their account.

The age of the OP now is what is irrelevant. The contract was agreed when the OP was under under the age of 18. If I lend my 14 year old nephew £1 for a week on the basis he signs a contract agreeing to pay me 50p a day for late payment, if he doesn't pay me back I wouldn't succeed if I took him to the small claims court for £700 once he turns 18. Or indeed for £880 when he's 19. The case would be laughed out.

meer53 wrote: »

The OP is at fault here by not making sure that the account was cleared and then closed. The OP will have received letters about the amount owed, nothing here is legally questionable, i don;t see why you think it is ?

Whether you think the OP "should" have dealt with it at the time (although I agree with you), or whether they have recieved letters, is about as relevant as whether the price of fish has gone up or down. The pertinent facts are these:

• While under the age of 18, the OP went overdrawn
• Natwest has been applying charges based on a contract agreed when the OP was under the age of 18
• The OP has paid Natwest £285
• Natwest wants a further £1095 from the OP

If the OP was 18 or over when he went overdrawn, your advice may be correct. He was not, therefore I respectfully disagree with it.

meer53

tripled wrote: »

They haven't refunded anything. They offered to let the OP pay a reduced settlement if paid within a given timescale, but the OP did not meet that so it's irrelevant.


The age of the OP now is what is irrelevant. The contract was agreed when the OP was under under the age of 18. If I lend my 14 year old nephew £1 for a week on the basis he signs a contract agreeing to pay me 50p a day for late payment, if he doesn't pay me back I wouldn't succeed if I took him to the small claims court for £700 once he turns 18. Or indeed for £880 when he's 19. The case would be laughed out.



Whether you think the OP "should" have dealt with it at the time (although I agree with you), or whether they have recieved letters, is about as relevant as whether the price of fish has gone up or down. The pertinent facts are these:

• While under the age of 18, the OP went overdrawn
• Natwest has been applying charges based on a contract agreed when the OP was under the age of 18
• The OP has paid Natwest £285
• Natwest wants a further £1095 from the OP

If the OP was 18 or over when he went overdrawn, your advice may be correct. He was not, therefore I respectfully disagree with it.

The OP DID pay the reduced agreed amount, BUT, they paid a day late, causing further fees.

It was the extra days fees which have caused the new amount owed. The OP admits they haven't spoken to anyone for the last 3 years about the account which is why the fees are now what they are.

Whether we agree or not, they owe Natwest the money and as they have already agreed for them to pay a reduced amount for the original £600 owed, there's not much chance of another goodwill offer.

Aquamania

I don't think the OP is interested either way; they were last here 2.5 hours after posting and before receiving any response and have not been back since.

Probably sat back laughing at the ongoing squabbles now though ... :cool: