Is there a legal unauthorized overdraft maximum?

hypes2k

Years ago if I made purchases under £10 on a debit card (which was into an unauthorized overdraft) they would go through. If you tried again, the card would decline. However if you checked the balance at the ATM after each sub £10 transaction it would allow you to use the card again. I took it as they allowed you to use the card again on small transactions as you were aware of what your overdraft balance was.

*I was under the impression this was fine as the bank was allowing me to do this*

The account got to around -£1,600 into an unauthorized overdraft until the ATM ate the card, is this legal in terms of the bank allowing us to do this, i.e allowing us to get into an unauthorized overdraft that large?

Thanks.

CLAPTON

hypes2k wrote: »

Let me get to the point,

Around 4 years ago we found that purchases under £10 on a LloydsTSB debit card (which was into an unauthorized overdraft) would go through (may have only worked in CO-OP). However you would have to check the balance at the ATM after each <£10 transation to "reset" it somehow.

*We were under the impression this was fine as the bank was allowing us to do this*


The account got to around -£1,600 into an unauthorized overdraft until the ATM ate the card, is this legal in terms of the bank allowing us to do this, i.e allowing us to get into an unauthorized overdraft that large?

Thanks.

assuming the question is really hypothetical, then yes it is legal for a bank to have stupid customers

timbo58

The bank can set their overdraft at whatever they want to depending on the circumstances of the account holder.

They can equally stop unauthorised withdrawals (whether they are classified as an overdraft or not) whenever they choose by either demanding the card and balance owed back immediately or by getting their ATM or a retailer to retain the card and then demand immediate repayment.

IMHO your actions should have caused a pattern to have been noticed by the bank and swift action taken a great deal easier since you were effectively taking money that wasn't yours.

I don't think an obscure loophole in the way the bank operate their atms could be argued as the bank being complicit in you taking their money without permission.

hypes2k

Ok many thanks.

pmduk

You sound as though you're trying to shift the blame for your behaviour onto the bank. Just be thankful you've not been reported to the police for fraud.

hypes2k

CLAPTON wrote: »

assuming the question is really hypothetical, then yes it is legal for a bank to have stupid customers

What do you think?

Ed-1

hypes2k wrote: »

Can't see how the customer can be stupid if they worked out how to exploit a banks ATM/debit card facility?

Hardly taking advantage of it. The interest accrued on the unauthorised debit balance must be a tidy sum.

hypes2k

pmduk wrote: »

You sound as though you're trying to shift the blame for your behaviour onto the bank. Just be thankful you've not been reported to the police for fraud.

Going into a shop and trying to make a purchase on a debit card that is your own is not fraud.

It is the banks responsibility to accept or decline the transaction. I didn't think at the time it was a loophole, I was under the impression if you knew your balance and were happy to go futher into the red, they would allow it on small transactions.

The money was paid back, but left me wondering if it was legal for a bank to allow you to go into an unauthorized overdraft over a certain amount.

dzug1

Stupid customer?? Exeedingly canny and devious if you ask me.


It would seem to be a different bank's ATMs that had the loophole.


But even if they were complicit in allowing it it doesn't make it illegal or unenforceable.


Who'd want to be a bank with customers trying to cheat you at every turn.

pmduk

It's going to check the balance, (presumably seeing the overdrawn amount) so that you could reuse the card that might have caused problems. However look forwards and make arrangements to repay them.

hypes2k

pmduk wrote: »

It's going to check the balance, (presumably seeing the overdrawn amount) so that you could reuse the card that might have caused problems. However look forwards and make arrangements to repay them.

Yes, in terms of their system, i'm guessing that they allow these small transactions because after you've checked the balance you're aware of the unauthorized overdraft amount.