Halifax Buffer £10, Ombudsman decision made, but incorrect

hullds73

Greetings everyone, read a lot of posts, and now in need of help/opinions.

I opened a Student Bank Account in 2010 for my 4 Year course, in 2011 ran into a problem regarding the overdraft. Ive appealed to the ombudsman but they still didn't uphold my complaint with Halifax, but have ALL the evidence, with terms and conditions and halifax leaflet about £10 buffer on my account at the time. The leaflet outlines my account and ALL accounts have a buffer dated June 2011 a month before my problem began.

Where my problem began (at any point feel free to contact me or post regarding this). Firstly please take note of the photocopy of a leaflet dated June 2011 with Halifax. This states all student accounts are entitled to a £10 buffer. On my account a debit went out of my account on June 28th to iTunes (Apple Inc) this takes the account into an unplanned overdraft of £2.71. This is within the £10 buffer that was applicable with my account at the time. This was dated June 2011 at the same time the overdraft enter an Unplanned Overdraft. Im not charged any interest for this problem, because i had a buffer and bring my overdraft back into planned on July 9th 2011, which is nearly two weeks later. No charges are added to my account as a buffer is in place as shown in the leaflet which i mentioned earlier.

My overdraft is increased to £1000 on July 16th for an emergency to pay for a rent due, this was because i had unforeseen circumstances with my University not paying a grant on time. This was a student matter landlord the above information is proof a buffer was in place and no interest is charge on the account of £28 standard fee. (This is proof on the statement and other leaflets i have on recorded and dated)

On my account a debit went out of my account on August 1st to iTunes (Apple Inc) this takes the account into an unplanned overdraft of £1.89. This is within the £10 buffer that was applicable with my account at the time. However i was on holiday at the time so when i came back on 5th August i made a payment of £2.00 to bring the balance back into the planned overdraft.

On 3rd October 2011 I'm charged £28.48, i was furious the charge was added ineffectively to my account, as nothing had happened with my account, and as proof on my statements i never went over my overdraft between 5th August and 3rd October 2011. I began to write letters, and halifax continued to deny they was in the wrong, i began to give up hope with them as it was continuous vicious circle, known as "snowballing" interest on top of interest. However i had a buffer of £10 so this should NEVER have happened.

Before i know it May 2012 is here, still trying to fight the fact this a banking error not my error. The close the account and order the full amount back to paid in full immediately, I'm in my second year at Uni, its impossibly to pay the balance in full, but more to the point i shouldn't be force to pay it because the account is closed because of miss interest payments, but I've not missed any technically there incorrectly added. The account on my credit file is also recorded in default which denies me access to a knew phone at the time too.

As you can imagine when a person has done nothing wrong a person can become very upset and down about the whole thing. I began to give up at University believing i was in the wrong, but again to my surprise someone saw the light at Halifax (Leeds Complaint Centre) and told me i was right and this indeed needed resolving. They refunded those fee's which has amounted to £204 (that should never have happened) no compensation was rewarded for the heart ache and upset caused for that year.

To my surprise i thought this account would be reopened and allowed to okay iff in instalments to the bank or reopened. I was wrong i was told as the account was closed i no longer fell under my terms and conditions and that in order for the default to be removed i would have to pay £971 in 60 days, but It was the middle of August 2012. Bearing in mind at this point i was still a student entering my 3rd year, with another to follow after this. I made a request formally if i could pay instalments with the default been removed off my credit file, as they also admitted they was at fault. The credit file was defaulted because the account was closed, not because i did anything wrong. However with all due respect the account would have not closed if Halifax had not made a banking error in the first place.

I was refused my option to pay instalments of around £75 over the year, these needed to be spread the cost due to not causing other problems such as accommodation, my budget was very tight, as i was studying in london, and technically not supported for paying a demand from a Bank.

Its a simple mistake by a bank that shouldn't have happened, thats now just so out of control its hard for this to be understood, but its pretty simple the account was closed because of the interest, however as admitted by Halifax this interest should have not occurred the error was correct and the interest refunded. The default was to be removed upon the balance been paid within 60 days now i personally thought i was very fair to pay £100 on a student account that was in debt collection (that shouldn't have been there in the first place) they refused to move the balance back into Halifax so i could deal with them, they explained i was no longer under the terms of halifax and needed to deal with "Apex Credit Management". The default is applied as though i was paying off some type of loan where by as i miss a payment it was recorded, but i was in a buffer of £1.89 and for only 4 days. i

I was accepted into the Royal Academy of Music for a Masters (my dream) its also taken years!!! to get to that point hard work and determination, and was refused funding due to this default been recorded on this account, as when i approached Barclays this was discussed about the account. This has ruined my life and quiet frankly now had enough of this whole concept. My expenditure left me a set amount a month which is why i requested instalments for repayment and they denied my efforts, despite THEY made and accepted the banking error. Not only that but i feel into the category of Hardship as a student. I was also told the technical term or my problem was "Snowballing" with fee's which has resulted in the account been closed inappropriately and recoded a finical default which was no fault of myself but with the Bank itself.

I have looked into buffer fee's i have found the following buffers on the banks in the United Kingdom. This was agreed in November 2011, via the government where this would come into action, however as my previous leaflet, and website printout of Martin Lewis website the bank was offering my account a £10 Buffer.

Buffer Zone

Some banks give you a buffer zone, where you are allowed to go overdrawn by a small amount (usually £10-£50 but can be as big as £250) without any interest.

- Lloyds Bank £10 Buffer on Student Current Account
- Halifax Bank £10 Buffer on Student Current Account
- Santander Bank £10 Buffer on Student Current Account
- Natwest Bank £6 Buffer on Student Current Account
- HSBC Bank £10 Buffer on Student Current Account
- Nationwide Bank £20 Buffer on Student Current Account
- Barclays Bank £10 Buffer on Student Current Account
- Yorkshire Bank £10 Buffer on Student Current Account

They have now gone back on there word telling me they wont be removing the default and I'm in the wrong? How can they do that to a customer, and now because i ended up giving up with the ombudsman as i was waiting for nearly 10 months for them to look at it, they have now NOT upheld the complaint, its very tiring.

Any advice?

stclair

I thought the buffer zones was only applicable to those customers without an overdraft.

If you have an overdraft then go over the agreed limit then charges would apply.

Dobbibill

Hi Hullds73,

I would think as above that the reason you were charged the second time you went overdrawn was due to you having a planned overdraft in place and then exceeding this therefore effectively making your balance £1001.89 overdrawn, whereas the previous month you were £2.71 overdrawn (within the £10 buffer) but I could be wrong......

Do you have a copy of the information you sent to the FOS detailing the t&c's around the buffer?

Why have the FOS NOT upheld your complaint? What did they say?

Also I found this archive post from MSE dated pre-problem time

http://www.moneysavingexpert.com/news/banking/2009/10/how-to-beat-halifaxs-overdraft-chagres

The information below are the sections I feel would be applicable to your circumstances and might explain what has happened and why the FOS has not upheld your complaint.

£10 buffer zone for all customers. A buffer zone zone means if you go overdrawn by up to an agreed amount you don't pay anything. This will now be set to £10 an all Hbos accounts, meaning many people will see their's cut.

The changes apply to all accounts, except the student account, where an overdraft facility is available.

If you have any additional information then please post but with the details thus far IMHO this would be the most likely explanation,I hope this helps

DB

hullds73

Hello i have read all of the above, to the knowledge stipulated and information provided, if we are debating the correction of Buffer and there is confusiion in general i would argue certain things are not made clear thus is a prime example when things need to be made clear.

FOS have said because its not in the terms and conditions therefore this is not something that will be supported, despite... All the relevent documents, terms change throughout the course of time like with all banks.

I even spoke to someone in the branch at the time, first time the overdraft went over was £502.71 so a buffer would allow £510.00 but nothing more, its designed for reducing mistakes and hefty fines and intrest. The second time as explained the overdraft was increased to £1000 to pay a rent, but again an Itunes debit take it into a unplanned overdraft. The unplanned overdraft with a buffer entitles no intrest to be charged up to on this ocasion £1010.

Halifax has made a mistake, in regards to it not been a feautre of the account to your previous comment, i have added this document:

halifax.co.uk/bankaccounts/pdf/student-current-account-guide.pdf

Please go to page 7 first when it tell you what a buffer is (Student Account) then turn to page 34 where it tells you what accounts have buffers and what amounts. Also please note this guide is for student accounts as can be seen in the URL.

Dobbibill

This is an up to date T&C's dated September 2014. I have read this but thought you may have had different T&C's dated 2010 or 2011, timely with when you were impacted.

Pg 7
[COLOR="rgb(65, 105, 225)"]Buffer – An amount of planned or
unplanned overdraft on which you
don’t pay any daily overdraft fees or
interest for using it. If your account
is overdrawn by less than the buffer
amount, you won’t pay any daily
overdraft fees or interest for using it[/COLOR]

Pg 34
Depending on the type of account you have, we will either charge you debit interest or a daily fee for using an overdraft.
To get a planned overdraft, you must pay your salary or other regular amount into your account.
The amount we charge you for using an overdraft will depend on whether you use a planned or unplanned overdraft.
There’s an overdraft buffer on your account, which means if you’re in debit by less than the buffer, you won’t pay any daily overdraft fees or
interest (as applicable).
The overdraft buffers are set out below
Account Buffer Impact
Ultimate Reward Current Account £50 No planned or unplanned daily fees if you are in debit by £50 or less
Reward Current Account £50 No planned or unplanned daily fees if you are in debit by £50 or less
Current Account £10 No planned or unplanned daily fees if you are in debit by £10 or less
Student Current Account £10 No debit interest if you are in debit by £10 or less

These are their current T&C's so not a great deal of help given that this happened so long ago for you and the T&C's at the time may have been changed/amended during that time.

Unfortunately the other part is that within T&C's they can terminate their relationship with you whenever they want, without the need to provide a reason which may answer why they closed the account.

You have approached this via the correct channels, ie formal complaint then FOS but maybe this has to be one of life's lessons.

DB

hullds73

I have a copy or the terms but no mention or ANY buffers in there terms, but i have a contrasting document that states otherwise, which i cant share as im a new account

Armorica

As others have said:
You believe your buffer should be in addition to an agreed overdraft
Halifax and the world disagree; once you have an agreed overdraft, the buffer is negated

And you need to share why FOS didn't uphold your complaint.

Dobbibill

Hi Hull,

Sorry for all the questions....what was your balance between the 1st - 5th August? Were you overdrawn by more than the buffer at this point? The charging period goes from the 2nd working day of the month to the 1st working day of the following month but the OP says from the 5th so we are missing information for the first few days there. This may be where it has incurred a charge!

DB

James_B.

This one is perfectly simple to clear up, and the ombudsman is right. You've a £10 bufffer, whether or not you have an planned overdraft. This means that the first £10 that you go overdrawn incurs no charges or interest (even if your overdraft has interest and fees for normal use).

The buffer is the FIRST £10 of your overdraft. If you go £1001 overdrawn, against a limit of £10, that is not using your buffer, and is not the "first" £10 of your overdraft, it is breaching your terms, going beyond your overdraft limit, and so will be charged fees accordingly.

Your contention that the £1.89 is within your buffer is simply wrong, you were £990 beyond your buffer at that point.

You need to ask yourself, why do you believe that the buffer is on top of your planned overdraft, as opposed to being at the start of it? No-one has ever told you that it works this way, I assume...

Anyway, you are in the wrong, bank and ombdsman are in the right, you need to settle what you owe, and move on.

Edited to add, you seem to have been very lucky that an employee made the same mistake you did about the buffer, so have had charges removed, but as you know, overdrafts are repayable on demand, so you do owe the remainder.

LplateSaver

I'm not sure if this helps but I'm with tsb and don't pay any charges on my £50 planned OD if I stay within £60 (£50 fee free with silver account + £10 buffer). Maybe student accounts work differently but those saying generally that the buffer is not for those with a planned overdraft or not in addition to a fee-free overdraft amount are wrong.

When I had the normal classic account I was allowed spend £35 of my £50 OD without incurring fees (£25 fee free with classic + £10 buffer) and even then if I had used £60 I wouldn't have been charged on an unplanned OD only a planned one because the buffer (£10) kept me within my £50 Od .

I don't know much about student accounts but I thought one of their lures was fee-free overdrafts so I would assume that it would work the same as TSB (agreed fee free amount + £10 buffer). Glad I didn't get one now or glad I'm not with Halifax.

From the tsb website

We will not charge you any additional fees or interest on a Planned or Unplanned Overdraft if the amount you have borrowed is £10 or less. This means that if you have a Planned Overdraft and exceed your Planned Overdraft by £10 or less, we will not charge you fees or interest on the Unplanned Overdraft but will continue to charge you any fees or interest on the Planned Overdraft. This buffer applies to all current accounts.

Game_Over

When you go to the FOS, cases are looked at first by an adjudicator.

That adjudicator invariably contacts you at the start of their investigations (if only to introduce themselves), possibly during the investigations, and again prior to them making their final recommendation to give you ample time to discuss matters, ensure the understanding of the complaint is correct, and to point out anything you feel is important.

So presumably you did that. So please post a copy of the response you received to your issue that addresses the specific point you are making here.

Even if all that fails, the adjudicators final recommendation would have described your options if you failed to agree, one of which would be to ask the actual ombudsman to rule. Obviously another chance to put your point across.
It's not entirely clear from your post if you got that far, but if so, then please post a copy of that response to this particular point too.