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NatWest overdraft warning – do not use (dormant accounts)
John_316
Posts: 2 Newbie
If you use the overdraft on a dormant NatWest account before crediting, they will immediately send to collections and demand it back. Even though they offer the overdraft facility!
I recently borrowed some money from my NatWest overdraft. The overdraft facility is £1250 pounds and I used approx. £600-£700.
I haven’t used the NatWest account in quite some time, over 12 months at least. The account was sitting with a balance of £0.00 the whole time.
I used the overdraft and less than two weeks after doing so, I received a letter from NatWest advising me I need to repay the overdraft or credit the account. I credited the account shortly after but kept receiving letters from NatWest advising I need to contact them to repay, including threats to default the account and send to debt recovery.
After speaking to NatWest the story is a simple one, yet not a good experience. Because the account didn’t have a credit arriving in shortly before using the overdraft, it went straight to collections, letters were generated, and I would be required to pay the overdraft down to less than £250.
None of the letter received from NatWest specified that the overdraft (limit of £1250) would send me straight to collections if used. Where was the warning?
I ironically spoke to NatWest over the phone to transfer money out of the account (the first time using the overdraft) and I was never warned or told about this process.
When speaking to NatWest they advised it’s in the terms and conditions. I explained that it’s not and there was no guidance around the amount to be credited, minimum credits, payment dates or the £250 limit.
I’m extremely annoyed with NatWest for sending something straight to collections, for a credit line they offered that’s being used.
If anyone else has this issue, then I suggest you do this – make a token payment before using your overdraft. Then make monthly payments. Apparently, according to the NatWest Recovery Centre, making a payment of just £1 to make the account in credit before using the overdraft would have stopped the letters, stopped it going to collections and stopped the threats of defaulting etc.
Have now paid and will promptly close account. Not worth this service.
Very poor customer experience from NatWest. They should be better than this.
I recently borrowed some money from my NatWest overdraft. The overdraft facility is £1250 pounds and I used approx. £600-£700.
I haven’t used the NatWest account in quite some time, over 12 months at least. The account was sitting with a balance of £0.00 the whole time.
I used the overdraft and less than two weeks after doing so, I received a letter from NatWest advising me I need to repay the overdraft or credit the account. I credited the account shortly after but kept receiving letters from NatWest advising I need to contact them to repay, including threats to default the account and send to debt recovery.
After speaking to NatWest the story is a simple one, yet not a good experience. Because the account didn’t have a credit arriving in shortly before using the overdraft, it went straight to collections, letters were generated, and I would be required to pay the overdraft down to less than £250.
None of the letter received from NatWest specified that the overdraft (limit of £1250) would send me straight to collections if used. Where was the warning?
I ironically spoke to NatWest over the phone to transfer money out of the account (the first time using the overdraft) and I was never warned or told about this process.
When speaking to NatWest they advised it’s in the terms and conditions. I explained that it’s not and there was no guidance around the amount to be credited, minimum credits, payment dates or the £250 limit.
I’m extremely annoyed with NatWest for sending something straight to collections, for a credit line they offered that’s being used.
If anyone else has this issue, then I suggest you do this – make a token payment before using your overdraft. Then make monthly payments. Apparently, according to the NatWest Recovery Centre, making a payment of just £1 to make the account in credit before using the overdraft would have stopped the letters, stopped it going to collections and stopped the threats of defaulting etc.
Have now paid and will promptly close account. Not worth this service.
Very poor customer experience from NatWest. They should be better than this.
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Comments
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Why are you surprised?
An account that's been sitting unused for 12 months with nothing going into it then you suddenly make a withdrawal from the overdraft.
That's not the purpose of the overdraft.
If anyone else has this issue, I suggest they look at different avenues such as a CC to do such transactions.0 -
I don't think you understand.
the purpose of the overdraft is a credit facility you can use, which the bank has provided you after performing some sort of credit check.
Roughly similar to a credit card, however a credit card will have specific repayment amounts and dates etc.
The overdraft facility is provided to be used when needed. Irrelevant of whether the account was credit the day before or not.
The point being that in reality a lender shouldn't send you directly to collections for using a credit facility they granted. They should also provide adequate warnings if that will happen. Which as stated in the post, they didn't.
So yes it is surprising they would send a customer through that journey.
as a quick side note, if you have a dormant credit card, this doesn't send you to collections if you use it for the first time in over a year.0 -
Well yes, and no.
An overdraft is a facility to overdraw your current account if you need to.
It's certainly implicit, if not explicit, that normally the overdraft facility is for an account you actively use. It's cheeky, in my view, to leave a current account unused and with nothing in it and then suddenly use it for credit. Current accounts are primarily designed to draw down a positive balance - i.e. debit.
Credit cards, on the other hand, are explicitly and only for credit. An unused one that is suddenly used isn't comparable. That's what it is for - for credit.
That's not what a current account is for though - an overdraft is more of 'favour' on a current account - a favour for which you should, really, be doing your bit by at least pretending to use the account!
Just my view, though I'm expecting your's is different!0 -
When speaking to NatWest they advised it’s in the terms and conditions. I explained that it’s not and there was no guidance around the amount to be credited, minimum credits, payment dates or the £250 limit.
Oh, yes it is...
10 Arranged overdrafts, unarranged overdrafts and unpaid transactions
10.1 Arranged overdrafts
Arranged overdrafts are available on request if you’re 18 or over and you meet our lending criteria.
If we provide you with an arranged overdraft, we’ll send you an overdraft agreement setting out its terms (including your arranged overdraft limit).
Your arranged overdraft is not for a fixed period of time, however it’s repayable on demand. This means that we can ask you to repay the full amount at any time. We may also decide to reduce your arranged overdraft limit or end your overdraft agreement.
We’ll only take these steps if we have a valid reason (for example, we reasonably believe that you can’t afford your arranged overdraft).
(Although I could be wrong, I often am.)0 -
The purpose of an overdraft is to cover funds/bills etc when you don't have enough money in the account to cover it.
Not for an account with a zero balance that you can dip into whenever you please.0 -
The purpose of an overdraft is to cover funds/bills etc when you don't have enough money in the account to cover it.
Not for an account with a zero balance that you can dip into whenever you please.
As an aside...
Many moons ago NatWest used to have a £100 fee-free/interest free overdraft facility.
They had no issues with me transferring the £100 into the linked e-Savings account, paying me interest on their money.
The card for the account was left in a drawer at work (1h20 60mile drive away), so that if I left my wallet at home I could just transfer the money online and withdraw it from a cash machine.
This went on for over 8 years until they eventually withdrew the 0% facility. The interest was enough to buy a couple of pints every year!0
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