Alliance & Leicester change overdraft policy

dalliance

Me neither. I'm glad I subscribe to the MSE email!

klint

Using their new policy, they charged me £25 "Payment Review Charge" on the same day that my balance would have gone below the agreed overdraft limit, had I not deposited some cash through their machines. The charge happens automatically, on the same day, with no warning. Doesn't this go against the Banking Code?

Also, the charge was applied even though my account didn't actually exceed the overdraft limit, because I paid cash in on the same day that a cheque was presented. I rang and queried it, and they confirmed the charge was correct because I should have made sure there was enough money in the account at the start of business; it didn't matter that there was enough money there at the close of business. Sounds very dodgy to me.

missile

Grade_A_Reject wrote: »

It does seem to favour those with large overdrafts rather than those who go over by the odd few pence.

By my reckoning if the fees are capped at £5 per month (10 days at 50p) I could keep my account permanantly at it's £3000 overdraft limit and move the overdrawn balance to my plus saver account with them which is currently paying 5.25% interest and make money from my overdraft with them.

I've just run this through their online calculator and according to that I'd get £126 net interest while the fees would come to just £60. I'm not planning on doing this, just interested in the maths.

Nice thought, but most banks reduce or even withdraw your overdraft facility if you are continually in the red.

YorkshireBoy

klint wrote: »

Using their new policy, they charged me £25 "Payment Review Charge" on the same day that my balance would have gone below the agreed overdraft limit, had I not deposited some cash through their machines. The charge happens automatically, on the same day, with no warning. Doesn't this go against the Banking Code?

No.

Also, the charge was applied even though my account didn't actually exceed the overdraft limit, because I paid cash in on the same day that a cheque was presented. I rang and queried it, and they confirmed the charge was correct because I should have made sure there was enough money in the account at the start of business; it didn't matter that there was enough money there at the close of business. Sounds very dodgy to me.

See condition 26.6 of your T&C's...

http://www.alliance-leicester.co.uk/currentaccounts/ec03964.pdf

klint

YorkshireBoy wrote: »

No.

Thanks for your reply, but doesn't it contravene Rule 5.5 of the Banking Code of Practice?

Before we take interest or charges for standard
account services from your current or savings
account, we will give you at least 14 days’ notice of
how much we will take.

There was no notice, they just helped themselves to £25 of my money on the same day that a cheque payment was debited from my account.

YorkshireBoy

klint wrote: »

Thanks for your reply, but doesn't it contravene Rule 5.5 of the Banking Code of Practice?

No again. Stopping you from spending/taking money you haven't got (available) is NOT a "standard account service".

There was no notice, they just helped themselves to £25 of my money on the same day that a cheque payment was debited from my account.

As they said they would do in condition 11.6 & 11.6.2 and their published 'Rates & Fees Information'.

klint

Thanks for the clarifications, Yorkshire lad. By the way, you sound a bit like Alliance & Leicester Customer Services staff ;-)

P.S. I know this sounds a bit pedantic but they didn't stop me from taking money I haven't got (they did actually honour the cheque; it didn't bounce) and what's the formal definition of a "standard account service" anyway?

BenL

That's me ditched and switched out of A&L. They got me for 50p this month due to the way they apply debits before credits in a morning so even on their working out I may have been in my authorised o/d for 10 mins whilst the system did its processing.

I had requested the funds be moved from my savings account the day before as well as I knew a DD would be applied for the next day.

Hopefully Norwich and Peterborough will be a good home for me.

Ben

MarkyMarkD

How many times have people had to explain this? It's been explained by me and others dozens of times on MSE.

A&L do not "apply debits before credits". Nor does any other bank.

A&L, in common with almost every other bank, requires in its terms and conditions that you have funds in your account by the close of the previous banking day, in order to make payments out of your account. In practice this applies only to DDs and cheque payments outwards (which are batch processed overnight) and not to "live" transactions like ATM withdrawals or branch cash withdrawals.

So you weren't charged 50p for being in your authorised overdraft for 10 minutes. You were charged 50p for funding your account one banking day late.

Online savings account transfers become available funds in your current account immediately - so if you'd instructed such a transfer the previous day, it would have been available previous day and not a problem for your DD payment out the next day.

PilotJames

MarkyMarkD,

I am paid into my A&L account on the 20th of each month and also have several SOs coming out of the account on the same day. According to the T&Cs, and your posts above, I should have been charged unauthorised overdraft fees as I'm up to my limit before payday. So why haven't I been charged?

Thanks.