Overdraft Rate Changes

Jusme

Hello, I opened a Nationwide FlexDirect account after reading this site, mainly to get a 12 month interest free overdraft. Now after 3 months they have halved my limit and introduced the standard fees of 50p per day. Basically can they do this?

msallen

Have you run the account "cleanly" so far - i.e. not exceeded your agreed overdraft?

eskbanker

As ever, the account terms and conditions govern the product, so if these guarantee an interest-free overdraft (and/or no reduction in limit) for the first 12 months then complain to them. If they don't guarantee that then you'll have to live with it or take your overdraft elsewhere!

grumbler

I think they have the right to reduce limit by giving at least 14-days' notice.
After 14 days they can start charging for exceeding the agreed limit.

Thrugelmir

Jusme wrote: »

mainly to get a 12 month interest free overdraft.

So what other activity goes through the account? Does your salary get paid in?

Dobbibill

I've copied this from their website here http://www.nationwide.co.uk/products/current-accounts/flexdirect/rates-fees-overdrafts

Overdrafts

Our overdrafts are only open to those aged 18 or over and are subject to approval. You will have 28 days' notice before we take any overdraft fees from your account. When you apply for an account, we'll tell you if we can offer you an arranged overdraft. The way that overdraft fees are charged for FlexDirect is different to FlexAccount, so if you're an existing customer swapping from FlexAccount to FlexDirect, please read this section carefully.
Overdraft usage fee
Daily arranged overdraft usage fee
Daily unarranged overdraft usage fee
50p per day on arranged balances over £10 (The first £10 of your arranged overdraft is free)
50p per day (for unarranged balances up to £10)
OR £5 per day (on unarranged balances over £10, capped at £60 per month)
We'll also give you a 12 month fee-free overdraft
For the first 12 months of an arranged overdraft, we won't charge you a fee if you use it.
First time fee refund
We can all slip up sometimes and lose track of our outgoings. So the first time you let us know you’ve made a mistake, we’ll refund any overdraft fees you’ve incurred.

Are you in a planned or unplanned overdraft at the moment? If they have reduced it you could be exceeding your overdraft limit which is why you are having charges.

Hope this helps

DB

pinkdalek

Jusme wrote: »

Hello, I opened a Nationwide FlexDirect account after reading this site, mainly to get a 12 month interest free overdraft. Now after 3 months they have halved my limit and introduced the standard fees of 50p per day. Basically can they do this?

In short - Yes.

Just like any other business in this country can change the way they process/handle their affairs, charge their clients differently.
If you don't like it, move your account.

grumbler

pinkdalek wrote: »

Just like any other business in this country can change the way they process/handle their affairs, charge their clients differently.

Well, not really. They can reduce the limit, by they can't charge their clients for using the agreed overdraft during the first year.

Aquamania

Jusme wrote: »

Hello, I opened a Nationwide FlexDirect account after reading this site, mainly to get a 12 month interest free overdraft. Now after 3 months they have halved my limit and introduced the standard fees of 50p per day. Basically can they do this?

Welcome to MSE, Jusme :hello:

Your post raises so many questions I would like to ask you before I can give you any advice, but I see you disappeared as soon as you posted.

Please do log back in if you require more assistance in this query

pinkdalek

grumbler wrote: »

Well, not really. They can reduce the limit, by they can't charge their clients for using the agreed overdraft during the firs year.

Think you will find that a bank can change the terms and conditions by giving at least a minimum of 60 days pre-notice/advice.
An overdraft is not a fixed contract, it can be withdrawn, reviewed, repaid on demand.

grumbler

pinkdalek wrote: »

Think you will find that a bank can change the terms and conditions by giving at least a minimum of 60 days pre-notice/advice.

General T&C, not the T&C of the introductory offer. The offer doesn't stipulate the limit, but does stipulate the charges for using the agreed overdraft.

An overdraft is not a fixed contract, it can be withdrawn, reviewed, repaid on demand.

Yes, as I said, the the limit can be reduced, including to zero. However, if it isn't zero, they can't charge for using it during the first year.