HSBC want to charge me - but is this right, and what can I do?

thriftymanc

Sorry that this is a bit long, but please bear with me and read this all through before commenting!


My OH and I have a joint current account and a joint savings account with HSBC. We also have a current account each and an ISA each.

This is how we work our finances:

We both get our wages paid into our separate current accounts, which we use for our own personal stuff. We keep some of our savings in our ISAs to earn more interest and if we can't put it in an ISA then we put in the joint savings account. For joint 'couple' stuff like bills, food shopping etc, we use the joint current account - we let it go overdrawn and instantly top it back up from another account, so that our money isn't just sitting in the current account and therefore not earning as much interest as it would in an ISA or saver.

Our joint account does not have a proper, fixed 'overdraft' as such.

This may sound like a stupid thing to do, constantly going overdrawn, but on HSBC's website it quite clearly states:

"An informal overdraft request is where you do not contact us in advance, and debits (for example, cheques, Bill Payments, Standing Orders, debit card transactions or ATM withdrawals) which you have issued are presented to us for payment and either there's not enough money in your account or your balance would exceed any existing formal overdraft limit. If we agree to your request the overdraft will be provided for 31 days. If another informal request is received within the same 31 day period, this will be treated as a new request."

In other words, if I spend money that is not in the account - for example my water bill comes out or something - and the money goes through, then this is an 'informal overdraft' and they have agreed to it. If they hadn't agreed, the money would be refused. So regardless of the charges, I know that I am 'allowed' to spend money which is not in the account.

However, I do keep a very close eye on our finances, and I log into the HSBC website every single day to top the joint account back up to £0.00. Because all six of our accounts are with HSBC, when I transfer the money it is instant, not 5 working days or whatever.

In HSBC's Fair Fees Policy, they again quite clearly state:

"You will not have to pay a fee for an informal overdraft request if your account is credited with covering funds by the end of the same day. "

But today, I log into the bank account and see that they are going to take £74 from the account on July 21, to cover 'overdraft charges' (there is no other information, this is as specific as it gets) from May 31 - June 29.

!!!!!!?!

As far as I was concerned, HSBC allowing me to become overdrawn meant that they had agreed to an informal overdraft (after all they could have just refused to let the money leave my account, e.g. my debit card could have been refused in Tesco or whatever, but this has never happened). And as I said, I log in every single day and repay the money instantly. There has only been one day that I haven't logged in as I was away from home, and when I logged in the next day I was only overdrawn by about £5, and that was this month anyway, so not relevant to the dates quoted.

I have even mentioned to a member of staff in a branch that I do this, because ironically I thought it made more sense to leave the money somewhere that it would gain interest for as long as possible, and the staff never told me that this was wrong.

Also I am angry with HSBC for letting muggins here blithely carry on doing this for so long without warning me that I would get charged.

Are HSBC right? Is there anything I can do to stop them from taking this money? Never mind the fact that I can't really afford it, it seems highly unfair and I was only doing what I thought was allowed seeing as it does say so on their website!

Any advice would be greatly appreciated.

jonesMUFCforever

IMO you have an overdraft facility or you don't.
If you have it will be written on the front of your statement somewhere.

If not and you have gone o/d expect to be charged.

The best way I would go about getting it removed is to ask for an account review. They will be so pleased to think that they will sell you something that they might well refund the charges, you can then decline all of their kind offers (unless they offer something that will benefit you).

thriftymanc

ejones999 wrote: »

IMO you have an overdraft facility or you don't.
If you have it will be written on the front of your statement somewhere.

Fair enough, but it does very clearly state on their website that my type of current account has an 'informal overdraft'. According to their rules I've done nothing wrong, I've just used the informal overdraft rather than a formal pre-arranged overdraft with a fixed limit and interest rate. And as I've paid everything back within a few hours they say they won't charge me for it. So why the £74 charge?!

Also I don't get statements other than online ones, so I think it's fairly reasonable of me to believe that what's written on their website is true

Sorry if I'm being dense but how would asking for an account review prevent them from charging me?

gt94sss2

thriftymanc wrote: »

Our joint account does not have a proper, fixed 'overdraft' as such.

The first thing to do seems to be to ask HSBC for a proper overdraft on that account and also see if you can get these charges back.

The HSBC website also says:

• You will not have to pay for your first agreed overdraft request (formal or informal) in any 6 month period. Each further request in a 6 month period may incur an arrangement fee.
• You will not have to pay fees for being overdrawn by £10 or less.

In HSBC's Fair Fees Policy, they again quite clearly state:

"You will not have to pay a fee for an informal overdraft request if your account is credited with covering funds by the end of the same day. "

But today, I log into the bank account and see that they are going to take £74 from the account on July 21, to cover 'overdraft charges' (there is no other information, this is as specific as it gets) from May 31 - June 29.

From the above the £5 overdrawn shouldn't matter according to their policy but things to find out are:

- do you know how HSBC define 'end of the same day'? Is it 3:30, 8pm or midnight?

- was your informal overdraft seen as a "2nd one" in the 6 month period referred to above and thus incurring a charge

I think you will also have to ask HSBC exactly what dates the charges apply to/how they were calculated and the answers to the above questions - if you discover the answers, please share them here.

I was thinking of doing something similar (i.e. topping up my own HSBC account if it goes overdrawn for any reason, to avoid charges) - though not on a daily basis! - but I also have an agreed overdraft (which haven't used since coming off their graduate account)

Regards
Sunil

jonesMUFCforever

Purely my opinion but an informal overdraft is not an overdraft at all.
They can use it to charge you as you have found out.

RayWolfe

I have read the Informal O/D as being one the customer has taken rather than one the customer has asked for and the bank giver. In other words an unauthorised O/D.

thriftymanc

Thanks to everyone for the replies so far.

gt94sss2 wrote: »

The HSBC website also says:

• You will not have to pay for your first agreed overdraft request (formal or informal) in any 6 month period. Each further request in a 6 month period may incur an arrangement fee.
• You will not have to pay fees for being overdrawn by £10 or less.

From the above the £5 overdrawn shouldn't matter according to their policy but things to find out are:

- do you know how HSBC define 'end of the same day'? Is it 3:30, 8pm or midnight?

- was your informal overdraft seen as a "2nd one" in the 6 month period referred to above and thus incurring a charge

As I mentioned in my original post (I think, without being able to see it right this very second?!) I did mention this 'topping up' system that I use to a member of staff in a branch, and at that time I was informed that as long as the account with either at £0.00 or in credit at the end of the day (midnight) then it wouldn't get charged. I.e. if I start off at £0.00, go overdrawn and top it back up to £0.00 all on the same date then that's ok. If I was overdrawn overnight into the next date (even if I topped up at 12.30am online) then it would get charged.

Sorry, don't think I made myself clear before - that £5 I mentioned wasn't even within the dates HSBC say this £74 charge is for, that was this month and isn't even enough to incur a charge.

That "each further request within 6 months" thing doesn't apply to my situation. The way it works is, if I was overdrawn by more than £10 and it carried on to the next day, I would get charged a set fee. The first time this happens, I wouldn't get charged, they'd let me off as it's the first time - but if I did it again within 6 months they'd charge me each time. As I haven't done this once, never mind repeatedly within 6 months, they can't charge me.

(Edited to say: the reason I can confirm what I have said in the above paragraph is true is because I generally go more than £10 overdrawn at least three times a week. If they were charging me £25 each time I went more than £10 overdrawn my total charges would be a hell of a lot more than £74 by now. Also, in their reply to my message to them, they said only three charges had been applied (totalling the £74) which is far, far less than the number of times I have been overdrawn by £10+.)

I cannot see why I have been charged at all. I know people have commented that it's because I haven't arranged an overdraft, but that's not really fair. I have totally played by HSBC's rules: for the period they say the charges are for, I have not one single time been overdrawn overnight - i.e. I have always topped the money back up on the same date.

Basically HSBC have advertised that I am completely allowed to go overdrawn without having a prearranged overdraft, as long as I pay it back the same day, but they're now saying I owe them £74. I really don't think I'm in the wrong here!

I have already asked them to break down the charges for me, as they did say I have been charged for three separate incidents, and tell me exactly what they apply to as I have not ever been overdrawn into the next day. They have already replied to my initial message to them - they basically said "no we can't refund you, get lost". Well, that was nice of them! I'll post here again when I find out the exact details of my charges.

thriftymanc

RayWolfe wrote: »

I have read the Informal O/D as being one the customer has taken rather than one the customer has asked for and the bank giver. In other words an unauthorised O/D.

'Informal' and 'unauthorised' are not the same thing in this instant. 'Informal' is HSBC's word, not mine. Informal just means that it's not set in stone, i.e. I have no set limit up to which I can take money out without incurring a charge. Informal means, in this case, that I am allowed to go overdrawn if they agree to it, i.e. if they authorise it. Each time I have gone overdrawn they have authorised it - if they refused to authorise it, then the money wouldn't have been allowed to leave my account. That's what they say anyway!

I don't know if I'm giving the wrong impression in what I said in my first post. I would just like to clarify to everyone reading that just because I am using the 'informal' overdraft, rather than the 'formal' overdraft, doesn't mean I'm taking the p**s and spending money that's not in my account when I'm not allowed to! I'm really not that daft and do read T&Cs very carefully, hence why I am so baffled that I have been charged when I've worked within their limits.

thriftymanc

ejones999 wrote: »

Purely my opinion but an informal overdraft is not an overdraft at all.
They can use it to charge you as you have found out.

In that case how can they state what they state on their website? Surely a bank isn't allowed to say "We won't charge you, honest!" and then do just that? All I am doing is using a service HSBC alledge they offer.

jonesMUFCforever

Well alledgly they want to charge you as well.
Get a proper o/d limit in place to stop this happening again.

I work in a different bank - we have a system whereby sometimes we will let a customer go over their o/d limit and pay items if their internal credit score is good but they will be charged for using more than they should. IMO it works better for the customer than having to bounce payments.

gordo43

You probably won't get much of a response by sending a message online, they'll have a script to stick to (i.e. no refunds allowed). You might be able to get more of an explanation/refund by visiting a branch (and nicely) explaining whats happened, they have more discretion, especially if these charges haven't happened before. You seem to have a good case if you can show them the statement concerned, which shows a zero balance at the end of every day. Might be an idea to ask for a formal o/d at the same time.