HSBC Overdraft

smj43

I've banked with HSBC for over 10 years and have paid in £1000s over that time yet every time I ask for a formal agreed overdraft I'm told I don't meet their 'criteria'. Yet they are happy to allow me to go overdrawn 'informally' and charge me an arm and a leg for the privilege. I've asked them why this is but the only answer I get from them is 'our system controls everything and we can't do anything about it'.

I understand my credit file isn't the best and that I do go into overdraft a bit too often, but when did banking become so impersonal? On a customer level, to say no to an arranged overdraft yet allow me to go into informal (aka expensive) overdraft and not even consider my request despite the fact I regularly pay in nearly 3k each month is a bit out of order?

Or am I being unreasonable?

TheEffect

smj43 wrote: »

I've banked with HSBC for over 10 years and have paid in £1000s over that time yet every time I ask for a formal agreed overdraft I'm told I don't meet their 'criteria'. Yet they are happy to allow me to go overdrawn 'informally' and charge me an arm and a leg for the privilege. I've asked them why this is but the only answer I get from them is 'our system controls everything and we can't do anything about it'.

I understand my credit file isn't the best and that I do go into overdraft a bit too often, but when did banking become so impersonal? On a customer level, to say no to an arranged overdraft yet allow me to go into informal (aka expensive) overdraft and not even consider my request despite the fact I regularly pay in nearly 3k each month is a bit out of order?

Or am I being unreasonable?

If I were a bank and was reviewing your account after you've applied for an overdraft, I'd decline you. Bad credit file, often in your overdraft, often going over your agreed limit = bad risk. I applaud HSBC for responsible lending.

I've recently (in the last 3 months) applied for a £1k overdraft and credit card with HSBC. While both were 'referred', I was accepted for both, all-be-it a £500 limit on the CC, which is once again, responsible lending looking at my current financial position.

maas

smj43 wrote: »

I understand my credit file isn't the best and that I do go into overdraft a bit too often, but when did banking become so impersonal?

These days, you bank with a computer. The computer makes most of the decisions on whether to lend/offer services and then the "friendly" staff just relay that information to you.

PeacefulWaters

smj43 wrote: »

I've banked with HSBC for over 10 years and have paid in £1000s over that time yet every time I ask for a formal agreed overdraft I'm told I don't meet their 'criteria'. Yet they are happy to allow me to go overdrawn 'informally' and charge me an arm and a leg for the privilege.

To summarise, you regularly take their money without asking.

I've asked them why this is but the only answer I get from them is 'our system controls everything and we can't do anything about it'.

One of the many things their automated underwriting system is doing is assessing how you use your account with them. You have, on more than one occasion, borrowed their money without agreeing it.

I understand my credit file isn't the best and that I do go into overdraft a bit too often, but when did banking become so impersonal?

About 30 years ago.

On a customer level, to say no to an arranged overdraft yet allow me to go into informal (aka expensive) overdraft and not even consider my request despite the fact I regularly pay in nearly 3k each month is a bit out of order?

To summarise, you earn a decent wedge but keep spending more than you earn. Without agreement. That sort of thing used to annoy traditional bank managers. While you might have been able to sweet-talk 10% of them a solid credit scoring system doesn't allow that.

Or am I being unreasonable?

You're living in financial cloud-cuckoo land. Manage your account responsibly and things may change. Keep abusing it and they won't.

Thrugelmir

maas wrote: »

These days, you bank with a computer. The computer makes most of the decisions on whether to lend/offer services and then the "friendly" staff just relay that information to you.

Technology has resulted in far more data being available is assessing credit worthiness. Personal relationships started to die out many years ago.

Thrugelmir

smj43 wrote: »

I've banked with HSBC for over 10 years and have paid in £1000s over that time

And presumably spent it again. Which means that you've no worth as a customer. In fact you've probably cost the bank money. If you utilise a lot of bank employees time.

smj43

My point was why do they allow me to go into 'unauthorised' overdraft but not agree to set up a formal limit? They call it 'unauthorised' and you may say I'm taking their money 'without asking' however I do ask when I make a request to withdraw cash/make a purchase that I don't have a balance to cover. Their system obviously says 'yes' to these requests.

My point was it's ok for them to charge me absurd amounts and let me go into unauthorised overdraft but won't give me an agreed one that would cost me less.

pmduk

The world has changed and credit not as easy to obtain anymore. Add to that the fact that banks have been burned by lending willy-nilly and you may see why credit is more difficult to obtain now.

bengal-stripe

smj43 wrote: »

My point was it's ok for them to charge me absurd amounts and let me go into unauthorised overdraft but won't give me an agreed one that would cost me less.

Are you certain the same thing would not happen if you had a small authorised overdraft of £100 or £200? You might still spend too much and exceed your authorised overdraft, slipping into the unauthorised one, but it would be 100 or 200 quid further down the road.

For the time being, create your own "buffer" of £100 or so and do not try to spend every last quid in the account.

eskbanker

smj43 wrote: »

My point was why do they allow me to go into 'unauthorised' overdraft but not agree to set up a formal limit? They call it 'unauthorised' and you may say I'm taking their money 'without asking' however I do ask when I make a request to withdraw cash/make a purchase that I don't have a balance to cover. Their system obviously says 'yes' to these requests.

My point was it's ok for them to charge me absurd amounts and let me go into unauthorised overdraft but won't give me an agreed one that would cost me less.

I could be wrong but suspect that this just comes down to credit risk management, so, in the same way credit card companies will charge a higher APR to the customers they deem as being higher risk, HSBC are lending you money but charging more to reflect the extra risk they're taking (according to their criteria).

Thrugelmir

smj43 wrote: »

My point was it's ok for them to charge me absurd amounts and let me go into unauthorised overdraft but won't give me an agreed one that would cost me less.

The banks point of view is why do you manage your finances so badly. The charges are transparent. So self inflicted.