A&L Current Account overdraft policy

benjus

Anyone seen this:

http://money.guardian.co.uk/news_/story/0,1456,1493599,00.html ?

Personally I thought that most bank accounts operated like this so I've always made sure that there was enough in my account to cover any transaction, but A&L customers who regularly come close to their overdraft limits will need to watch out.

pin

Damn, beat me to posting this. Personally I think it is very cheeky of A&L.

Jim02

The A&L internal document says the practice "reduces the risk of customers being embarrassed or frustrated when making [point of sale] transactions or making a cash withdrawal".

Personally I'd rather be a little red-faced than pay £25!

Swattie

I think eveyone should vote with their feet as A&L are becoming more and more greedy and less & less transparent.

I recently closesd my A&L account due to appalling customer service.

I am also inthe process of closing my daughters Childrens savings account after they recently announced that they are slashing the interest rate by over 30%.

grumbler

I don't see anything wrong with this. Actually nobody with full debit card was protected from going over agreed overdraft limit till now, especially when making purchases with the card. Only cash cards and basic cards (visa electrom etc) provided balance check before every transaction.

Just don't go into overdraft - and you will never go over agreed limit. Overdraft limit is you safety cushion. There are other ways to borrow money...

MarkyMarkD

If you are using an ATM it takes no effort to check the balance before making the withdrawal - anyone who doesn't do so, and goes overdrawn, has only themselves to blame.

Most people would rather not get embarrassed in a shop, IMHO.

If the policy also applies to direct debits and the like, it's better to be charged £25 for an unauthorised overdraft than £29.50 per transaction for a rejected DD IMHO - and if a DD is rejected, quite often the other party will charge you as well.

I agree with grumbler - I don't see what's wrong with the idea.

davidcampbell

my views on bank charges are pretty well known on the site as well and it wont come as a shock to hear if agree with grumbler and marky.

nothing has changed .... they offer you an overdraft. you stick to it. if you dont you get punished.

wheres the problem?

In a letter in March setting out new terms and conditions, the bank told customers: "You must ensure that the cleared balance on your account at the start of the day is sufficient to cover the amount of any payments that may be debited from your account that day."

seems pretty clear to me.

DC

jonesMUFCforever

Here here!
Eric

Paul_Varjak

I think you have to remember that new A&L current account customers have free authorised overdrafts during the first 12 months. After that,the authorised overdraft rates are just 7.9%. Not only that, when you are in credit, you get paid up to 5% on your balance.

If A&L were not allowing customers to go over their authorised overdraft limit that was unusual (except for basic bank accounts and those accounts with electron/solo cards). It may well have generated complaints from customers who became 'embarssed' when shopping with their debit card and who may have incurred charges from authorities who made DD requests that failed.

In attempting to avoid this, A&L have introduced a system that allows unauthorised overdrafts but without incurring charges by going just a few pence over the authorised overdraft limit.

Yes, they may charge £25 for an unauthorised overdraft but you have to be overdrawn for two days at least and exceed your authorised overdraft by more than some unknown 'secret buffer'. The 'secret buffer' depends on your credit rating.

If customers knew the level of their own 'secret buffer' they may then argue that they have only exceeded the 'secret buffer' by a pound or two for a couple of days and been charged £25 for the privilege!

I think that A&L have adopted a sensible solution but they should make it clear to their customers of this change (if they have not done so already).

I suppose there will always be people that will 'test' the level of this 'secret buffer' just like the speeding motorists that see if they can exceed the speed limit by 10mph and avoid a speeding fine. You can be sure that it will be the ones that 'test' the limit who will be the first to complain!

MarkyMarkD

I know that some people will say that they can't trust themselves with an overdraft, but really everyone else should set up an authorised overdraft limit of at least a few £100 to avoid the risk of payments being rejected and overdraft fees being charged. Almost every bank, nowadays, doesn't charge for setting up an OD facility and this certainly applies to A&L.

GlennTheBaker

I used to work for Midland Bank (now HSBC) and giving customers what was called a "behavioural limit" was common practice. At the end of the day, its up to the customer to manage the account and stay within any agreed overdraft facility.