Bit of a mess.....Santander / Debt Collection

rodwales

Good morning,


I have a bit of a problem that I'm sure you guys can help with!


Its a long story but I will keep it brief....


1. On 1/1/2009 my overdraft for £5k was removed with no notice at all causing major financial issues! Bank closed our account and we moved over to another bank.


2. Debt was transferred to various collection agencies with various stories about debt sold / acting on behalf of etc..


3. For 5 years now been paying it off slowly and thought I had almost come to the end having paid back close to £5000.


4. Checked with collection agency and apparently I still owe £1000. Original debt apparently was listed as £5895 even though O/D was £5000.


5. Queried with collection agency over disputed amount and they wouldn't / couldn't tell me why. Claim that they (Debt Managers UK) are only acting on behalf of Arrow Global Ltd. who bought the debt from Santander. Phoned Arrow Global - they couldn't have been less interested.


6. Phoned Santander complaints and demanded a breakdown. Very helpful guy on the phone explained that there was £635.79 in charges applied.
The breakdown the charges as:
-£240 "Instant Overdraft Request Fees" applied on the day the overdraft was removed (that annoyed me the most that they pulled the overdraft without warning and instantly charged that for that fact we didn't have an authorised overdraft!)
- £121.49 in "Fees" for January 2009.
- £25 "Instant Overdraft Request Fee" for February 2009.
- £148.22 in "Fees" for February 2009.
- £126.08 in "Fees" for March 2009.


7. The bank did nothing to help us. No offer of reducing the overdraft, no warning, no opportunity to apply for a loan (and we now have a default against us). We had been customers for over 10 years. They blamed part of the issue as a changeover computer system from Abbey to Santander.


I appreciate its 5 years now and the debt has been passed over to collections but I'd like to do something. I had hoped to have this debt cleared by Christmas and start the new year with it gone.
- the £240 applied immediately on the day they removed the overdraft which I feel strongly about
- the other charges subsequently applied which they will argue were charges I agreed to in T&C's.


Any thoughts?


Thanks.

grumbler

1. All overdrafts are intended for a short-term borrowing only. All banks say in the T&C that overdrafts are repayable on demand. No notice is required, but they did have to give an advance notice before closing the account.

2,4. I'd be surprised if the DCA didn't add their fees to the amount. It's a norm and they are allowed to do this.

6. Indeed, £240 in one day is odd, but the monthly interest alone could have easily been ~£100. Ask for an explanation if you wish.

7. The bank didn't have to do anything. It's not their business to help. You could have asked this or another bank for a loan.

If you were in financial hardship you can try claiming some (all?) charges back from the bank:
>> Bank Charges Reclaiming

Archi_Bald

£895 in charges for a £5,000 loan over 5 years seems very reasonable. If you use the MSE loan calculator, you will find it equates to a bit under 7% APR. This is probably a lot less than you could have got if you had successfully applied for a loan in 2009, and it is certainly a great deal less than what you would have paid for an overdraft over such a long period.

Call yourself lucky and continue to pay off the debt.

System

Did you ask the bank (at the time) for a repayment plan of some kind?

Archi_Bald wrote: »

£895 in charges for a £5,000 loan over 5 years seems very reasonable.

But it wasn't a standard loan was it?!

Archi_Bald

Heng_Leng wrote: »

But it wasn't a standard loan was it?!

No it was not. But it was borrowed money. Money borrowed from a bank generally costs money.

The cheapest way to borrow money from a bank, bar a 0% credit card, is a loan. That is why a comparison with loan rates available in 2009 is relevant.

Also, the OP would apparently have been happy to continue with an overdraft, which would have cost considerably more than a loan would have cost. That's why a comparison with overdraft costs is also relevant.

rodwales

Asked for a reducing overdraft, asked them to help with a debt management plan all of which they are supposed to offer. They said yes but their computer apparently overrode it and a different department then said no.

System

They are not obliged to give you an overdraft; even a reduced one.

They should have been a responsible lender and offered you some kind of repayment plan of the existing debt if you did ask.

Look at the debt boards for advice, but I would certainly approach Santander and look to get the charges etc reduced or removed. A formal complaint and reference to the ombudsman may be necessary.

rodwales wrote: »

Asked for a reducing overdraft, asked them to help with a debt management plan all of which they are supposed to offer. They said yes but their computer apparently overrode it and a different department then said no.

grumbler

rodwales wrote: »

Asked for a reducing overdraft,

What exactly does this mean?