RBS Bank Charges on Charges

nurseinwaiting

Hello, I hope some one can advise me please.

I am a 3rd year nursing student with 6 months left to go, So far I have managed my money very well, especially as I have 3 children and a home.

I have an ordinary RBS bank account with a £250 overdraft. I went over the overdraft limit by a small amount and did not have the money to pay into the account until approx 3 weeks later as my budget is extremely fixed.

I don't recall how I managed to go overdrawn by a small amount as the card should have been declined when I used it if there was not enough money in the account. I suspect it was the new system of touching the reader, but when I checked my balance I took into account the 'cleared' funds and spent the rest on home expenses. However, as my budget is fixed and so tight, I literally couldn't rectify this issue until the next bursary.

I was charged £90 in charges for this. Fair enough, My fault.

I am now being charged a further £90 in charges, Even though I bought the account back into credit before the above charges were put on the account approx 4-6 weeks after the event. They did send me notice but I did not have anything spare to cover this. This has repeated it's self this month.

So I am now £180 over the overdraft, of an account that was within the OD. I have rang up and offered to pay the original charges of £90 but they want me to pay the rest plus another set due to go on in the next week.

(I stopped using the account and never used it for DD anyway and my bursary goes into another account)

Can they charge me charges on charges??? This is snowballing now even though I got the account back into it's credit limit originally before the first batch of charges went on.

Hopefully someone can help. I have called them and offered to pay the first batch but they will not drop the rest, How far will it snowball now??? Does it just continue adding £90 a month??

Thanks

eskbanker

nurseinwaiting wrote: »

I don't recall how I managed to go overdrawn by a small amount as the card should have been declined when I used it if there was not enough money in the account. I suspect it was the new system of touching the reader, but when I checked my balance I took into account the 'cleared' funds and spent the rest on home expenses.

This is the misunderstanding that ultimately led to your issue - most low-value contactless transactions don't go online to your bank to check that there's sufficient balance so they'll go through regardless. In your case this means two things - you can't rely on contactless transactions being declined due to insufficient funds and your available balance figure won't take these into account.

nurseinwaiting wrote: »

I am now being charged a further £90 in charges, Even though I bought the account back into credit before the above charges were put on the account approx 4-6 weeks after the event. They did send me notice but I did not have anything spare to cover this. This has repeated it's self this month.

So I am now £180 over the overdraft, of an account that was within the OD. I have rang up and offered to pay the original charges of £90 but they want me to pay the rest plus another set due to go on in the next week.

They will continue to charge you unauthorised overdraft fees for every day the balance exceeds your agreed limit. Even though you see it as charges on charges, they won't differentiate in that way, i.e. it doesn't matter if it's the charges that put you over the limit. So, you need to find funds from somewhere asap to get back within your limit, otherwise this will keep snowballing as you suggest.

bertiewhite

I must admit, I didn't think a bank was supposed to compound debt this way?

It might be worth writing a sob letter to them, explaining the circumstances and asking for further charges to be suspended - it worked for me several years ago with Natwest.

teddysmum

bertiewhite wrote: »

I must admit, I didn't think a bank was supposed to compound debt this way?

I would expect this, as interest is compounded on savings. (ie You get interest on any interest accrued, so likewise, if a fee increases an overdraft, then it too attracts a fee).

bertiewhite

Well MSE's own advice on reclaiming bank charges states:

Bank charge cycle This is known as snowballing. It effectively means you've had charges on charges, so you've been stuck in a trap of not being able to clear charges before new daily or monthly fees are added on top.

This is very common for those with larger reclaims, and is often the reason why some people are being paid back many £1,000s. Of course, it tends to go hand in hand with being in hardship.

PeacefulWaters

bertiewhite wrote: »

Well MSE's own advice on reclaiming bank charges states:

Bank charge cycle This is known as snowballing. It effectively means you've had charges on charges, so you've been stuck in a trap of not being able to clear charges before new daily or monthly fees are added on top.

This is very common for those with larger reclaims, and is often the reason why some people are being paid back many £1,000s. Of course, it tends to go hand in hand with being in hardship.

I thought I'd correct the last two words.

A bit silly, then failing to take the time to understand when charges will be applied and budgeting accordingly.

MyOnlyPost

Firstly you need to do whatever is necessary to clear these charges once and for all and stop them accumulating. When that's done you can then think about how to claim them back

Flobberchops

RBS are being somewhat mean in enforcing this in my opinion, if it's the first time you've incurred charges. It would be nice for them to waive fees as a one-off if it's a genuine oversight on your part and out of character for you.

Talk to the bank and see what agreement you can come to. Emphasise the fact that you're trying to avoid fees but due to financial hardship will be able to. Some banks offer a "control feature" where charges are capped for the month, you might ask if RBS do anything similar.

nurseinwaiting

Thank you for your replies. I am on a fixed very limited budget with no extras. No mobile, no pay tv, no gym, etc. We live frugally and can not make any payment more than £5 a month. They will not accept this. I have offered to pay the original set of fees but not the snowball fees as I can not afford it. It was a flat no and the snowball continues until they agree an arrangement. I told them about priority bills and what was left. We are surviving on £130 a week for a family of 5 with gas and electric in that figure (All other bills are paid by dd from other account) They know this but would not accept my offer. Can I send a letter complaining about the charges? It this isn't hardship then I don't know what is?

PeacefulWaters

Ring again and ask very politely if they can waive all charges.

If they won't, you're on a slippery slope unless you can cover the bill one way or the other. Sell something on eBay perhaps.

Ben8282

Could you not have withdrawn funds from the other account which receives your income and where funds were presumably available for you to live on for the 3 weeks that you were overdrawn by this 'small amount'? How much was this 'small amount' by the way?
You can't blame this on contactless. You have only yourself to blame.
I find it strange indeed that the fees charged (£90) for the first period are identical to the fees charged for the second period. You say you were in unauthorised overdraft for 3 weeks. So it looks as if this 3 weeks went into two separate charging periods, but that still does not explain why you were charged identical amounts for both periods. Are you sure that this £90 has actually been debited twice? Remember that the fees are debited in arrears so the first fee would not have been debited until some time after the account was allegedly (see below) back in credit and the second set of fees one month after that.
You claim that you put the account back in credit but that really cannot be if you are now £180 over your overdraft limit. Do you actually mean that you reduced the overdraft to the overdraft limit?
In order for you to now be £180 over your overdraft limit you must have returned the balance to -£250 (your overdraft limit) exactly then ignored the situation when the first lot of fees were debited and the balance became -£340 and paid in not a single penny ignoring the situation for another whole month before the second set of fees hit one month later increasing the overdraft to -£430. Be warned that another set of fees will also be debited next month!
Perhaps the best thing for you would be to limit yourself to one bank account (the one which receives your income) when this situation is sorted?
I am actually surprised that RBS continue to offer you an overdraft facility on an account which does not receive your income and that you don't appear to actually be paying any money into each month. I am not at all surprised that they won't refund any fees as a goodwill gesture on an account which is conducted in this manner.