Student Overdraft Dispute - Bank Accept Liability, Outcome is Unnaceptable

jampottt

Hi Guys,

To give you the back story - I had a Student Bank Account with a financial provider with an interest free Student Overdraft provision, that as I began to start looking to purchase a house with my girlfriend, began paying off and systematically reducing.

I called up once paid off to close my accounts as I was switching providers, and was told that I couldn't close all of my accounts due to the ISA being active within the financial year and it wasn't the end of that financial year yet.

When I called back at the end of the financial year to close the account, I was misinformed that I had in excess of £1000 in my student account and as such transferred the funds out which were later bundled with savings to purchase an engagement ring and subsequently proposed to my girlfriend (now fiancee). I tried to log in to my online-banking afterward to check why I'd overpaid so significantly, but couldn't as I didn't know my credentials. Rang back up, got them, and after multiple efforts to log-in (the closest I got was a loading page that then gave me the Google Chrome dinosaur) I just gave up.

I received a call at the weekend telling me that my account was overdrawn in excess of its limit and would be going to the collections team. This was obviously a shock, as as far as I was aware the account should've had a balance of £0 as I'd paid my student O/D off and the last time I had any activity with it was to transfer money out I was told was in there. Since then, 2 agents for the bank have accepted liability for the misinformation but as the money was spent on goods will not accept liability for the full sum, and have been offered a pithy £150 as compensation, as well as a GOGW extended interest free O/D until the end of October with my complaint not upheld. The bank expect the full sum paid back in three months, which seems furthermore unfair!

I'm planning on taking this to the Financial Ombudsman, as had I been provided with the full facts at the time of making the transfer, I would never have gone through with it, regardless of what the funds may or may not have been spent on, it was only done because I was told I had money that belonged to me, which in fact I never.

Has anybody experienced anything similar? I don't want the account to go into collections, I don't want any negative effect on my credit rating but I can't seem to get a logical explanation from the bank. Perhaps I'm illogically looking at things.

Any advice would be warmly welcomed. I just want what's fair.

Thanks!

KJSmith

Which "financial provider"?

What was the overdraft limit for the student account?

Given that you had been systematically paying off the overdraft, did it not seem surprising to you that suddenly you had a balance in excess of £1000?

Do you know how or why you were mis-informed about there being more than £1000 in your student account? Could this have happened because you were told your "available balance" rather than your "account balance", and maybe the overdraft facility was later withdrawn because you weren't making any payments towards it?

Whether they made a mistake or not I doubt they are going to just right off £1000. If you can't payback £1000 by October then ask if they can provide a longer period.

jampottt

KJSmith wrote: »

Which "financial provider"?

What was the overdraft limit for the student account?

Given that you had been systematically paying off the overdraft, did it not seem surprising to you that suddenly you had a balance in excess of £1000?

Do you know how or why you were mis-informed about there being more than £1000 in your student account? Could this have happened because you were told your "available balance" rather than your "account balance", and maybe the overdraft facility was later withdrawn because you weren't making any payments towards it?

Whether they made a mistake or not I doubt they are going to just right off £1000. If you can't payback £1000 by October then ask if they can provide a longer period.

The O/D limit was reduced to £960 down from £2000. Didn't reduce it any further as I was told by the Co-Op (the bank I was with) that they never should've been reducing it in the first place, so just left it at a £960 limit and paid it off.

I'd paid the O/D off probably 6 months prior to this phone call, so was surprised when I was told there was just over £1000 in the account. I queried multiple times on the call whether or not this was available balance, and repeatedly the agent informed me that it was i.e credit. Two members of staff from the bank (initially a manager, then the complaint handler) listened to that call and accepted that I was misinformed, which in turn triggered the transfer.

GingerFurball_2

The co-op are hopeless. I barely managed to avoid them defaulting my account about 5 years ago because they kept removing my overdraft facility in error.

SuperAllyB

jampottt wrote: »

The O/D limit was reduced to £960 down from £2000. Didn't reduce it any further as I was told by the Co-Op (the bank I was with) that they never should've been reducing it in the first place, so just left it at a £960 limit and paid it off.

I'd paid the O/D off probably 6 months prior to this phone call, so was surprised when I was told there was just over £1000 in the account. I queried multiple times on the call whether or not this was available balance, and repeatedly the agent informed me that it was i.e credit. Two members of staff from the bank (initially a manager, then the complaint handler) listened to that call and accepted that I was misinformed, which in turn triggered the transfer.

Surely the time to have checked your online statement (no matter how difficult that was) was before you withdrew the money and made the purchase.

As far as I am aware, all banks include any agreed overdraft limit in the "available balance".

£150 compensation seems more than fair to me, although you could always try and get them to extend the repayment terms beyond October if it is causing you financial difficulty.