BoS overdraft fee/interest query

m_c

I've got a Bank of Scotland Platinum current account, which has a fee free overdraft up to £300, however my current planned overdraft is £2000.


Last month I managed to stay within the £300 limit, however I've still been charged a £6 overdraft usage fee, along with £6.91 interest. My understanding was that as long as I stayed within the £300 limit, I wouldn't get any additional charges.


Here's the relevant extract from their summary guide (can be found at https://www.bankofscotland.co.uk/assets/pdf/bankaccounts/pdf/bank-account-conditions.pdf )

Interest rate

[FONT=AvenirNext LT Pro Regular,AvenirNext LT Pro Regular][FONT=AvenirNext LT Pro Regular,AvenirNext LT Pro Regular]For all accounts other than Student account, the interest rate we charge on Planned Overdrafts over any interest and fee-free amount and Unplanned Overdrafts is 1.52% per month/19.89% EAR (variable).For Student accounts, the interest rate we charge on Planned Overdrafts over any interest and fee-free amount and Unplanned Overdrafts is 0.66% per month/8.21% EAR (variable).

EAR is the Equivalent Annual Rate. This is the actual annual rate of an overdraft. It doesn’t take into account fees and charges. [/FONT]

[/FONT]Monthly overdraft usage fee: £6

[FONT=AvenirNext LT Pro Regular,AvenirNext LT Pro Regular][FONT=AvenirNext LT Pro Regular,AvenirNext LT Pro Regular]You will pay this fee if you use a Planned Overdraft by more than your interest and fee free amount or an Unplanned Overdraft by more than £10 at any time during your monthly billing period. We will charge you a maximum of one Monthly Overdraft Usage Fee in a monthly billing period.[/FONT][/FONT]

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Now from my interpretation, I shouldn't of paid any fees. But not only that, even if they had charged interest on the full £300 limit for the month, I make 1.52% on £300 as only £4.56 and even running it through a compound interest calc on a daily basis, it's still only £5.01.
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YorkshireBoy

I don't think they use calendar months. The billing period runs from 2nd working day of one month to the 1st working day of the next.

If that doesn't explain it, then maybe the charges are a month in arrears, ie those billed in August were for June's billing period usage, not July's?

m_c

You're correct in that they use the 1st/2nd as the end/start of the monthly billing cycle, however the balance was in credit at the start of the billing cycle.

YorkshireBoy

m_c wrote: »

You're correct in that they use the 1st/2nd as the end/start of the monthly billing cycle, however the balance was in credit at the start of the billing cycle.

So which billing period month were the charges billed in August for?...June/July or July/August? If the former, had you used the overdraft facility more in that period?

m_c

I maybe could of been a bit clearer with dates.
I was charged the fees on the 1st of this month (they get added overnight between the 1st/2nd, so are always the last item on the statement for the 1st), which from my understanding and the start of the account guide, that they were for the end of that period I.e. July/August.


The previous periods fees (June/July) were far higher, however I did make good use of the overdraft in June.
There's no mention of fees being carried forward to the next billing period, just that they'll all be applied at the end of the period.

YorkshireBoy

Those account T&Cs say...

Our overdraft charges are worked out at the end of the monthly billing period and we’ll always let you know the amount before they are taken from your account.

...so that reads to me like they tell you what June's charges were sometime during July and post them to your account in August. In other words, they can't possibly inform you beforehand if they were calculated up to, and including, the day before posting (which is, in fact, a matter of minutes/hours before posting).

I suggest, based on the above, that the charges posted overnight Tuesday this week are for the June/July billing period. How did they notify you of the upcoming charges? Do you check emails/secure messages etc?

m_c

The only time I've ever had any notification is for anything unplanned, which I've not had for several years. Standard planned overdraft charges have always just been taken at the end of the period.
If the fees had been for the previous period, then the interest would of been far higher, as I was well over £1000 for most of that period, which the previous fees would cover (£18 for interest alone).


I'll have to phone the bank when I get a chance, and get them to confirm what the latest charges cover.

m_c

Now that I've managed to unearth a ye olde paper statement, it all makes sense. I can't view actual statements online, so the required information wasn't shown.

My account statement date is still the 7th, so I was over the £300 limit for part of that account cycle.

At least I shouldn't get charged any fees this month, but next month is likely to be a very different matter