HSBC Overdraft 'arrangement' fees

boypolar

I've had an overdraft with HSBC for several years. It was kept at a fixed rate until further notice.

A couple of days ago, I noticed a £25 Overdraft arrangement fee had been applied to my account. After contacting HSBC it transpired that they had decided to end the 'until further notice' clause to my overdraft, and make it renew annually, for a fee of £25.

The bank says they have written to me about this, but clearly because of the postal strike the letter has been delayed or lost.

I find this incredible, since it costs the bank nothing to continue providing the same service as before.

HSBC have told me they will not waive this charge and say my only option is to close my account. Does anyone else have any experience of this happening to them recently?

getting-sorted-sarah

Grrrrr.
No, this hasn't happened to me, but only because I don't have an overdraft! When I attempted to avoid getting a fee for going overdrawn unavoidably by contacting HSBC and explaining that I would be overdrawn by £30 for a couple of days, they said that was fine, they'd ok a temp overdraft for me at a charge of £25. This is the same as the unagreed overdraft charge!!!

You have my sympathy!

jonesMUFCforever

Op does not have to close the account merely tell HSBC that he does not require the o/d facility.

msaquib

Can anyone provide a link where it says - Existing customers overdrafts will now be reviewed annualy with an arrangement fee of £25.00.

M

ashli_2

We got stung by this too. :mad:




I can't believe they can just decide to award themselves an annual payment like that.

gt94sss2

boypolar wrote: »

I find this incredible, since it costs the bank nothing to continue providing the same service as before.

Just on this point - I believe it will now cost banks more to keep providing unused overdrafts and/or unused credit limits on credit cards - hence the general reduction in limits recently.

This is because new international accounting rules are coming into force shortly which means that banks have to take account of the risk if all these unused limits were actually used.. thus leading to a reduction in the amount they can lend - before I think they didn't pay them that much attention.

Regards
Sunil

obsessedwithmoney

Hi,

I got the same letter and I have managed to get it refunded! Here's how:

I Put it into writing about illegal bank charges , I got a letter back saying it has logged it but is ongoing awaiting fsa or other as to where they stand. Anyway a couple of weeks letter got another letter regarding overdraft fee, at first i thought they had refunded the charge - but - very sneakily - just said i had succeeded and here is my overdraft but still a charge!! Well I was fuming got on the phone , and when they started to go blah, blah, I said i would think they (banks) are competing for business, I already pay 18% for when i use it and quoted A & L (or Abbey?) as offering 6% when in credit and 0% overdraft fee . Hey presto, charges refunded! I should think so too. Thanks to all info on this site.

Hopes this helps

:T

M_Thomson

gt94sss2 wrote: »

Just on this point - I believe it will now cost banks more to keep providing unused overdrafts and/or unused credit limits on credit cards - hence the general reduction in limits recently.

This is because new international accounting rules are coming into force shortly which means that banks have to take account of the risk if all these unused limits were actually used.. thus leading to a reduction in the amount they can lend - before I think they didn't pay them that much attention.

Regards
Sunil

Are you talking about Basel 2? I think that has come in already. I also think it has to do with the fact that so many people are reclaiming bank fees. They are looking to make up the shortfall from somewhere else.

gt94sss2

M_Thomson wrote: »

Are you talking about Basel 2? I think that has come in already.

Yes, Basel 2 - some banks/countries are further ahead in adopting it than others - there is quite a long period given to banks to adopt it globally..

I'm sure fee reclaiming and also the recent credit crunch are also factors with many financial institutions in changing credit card and overdraft limits (or just giving you on at all).

Talking specifically of HSBC though, I think their overdraft policy has been the same for quite a while - and as it was seen as 'fairer' than the other big banks they haven't needed to change it, unlike Lloyds and A&L etc..

Regards
Sunil

DJ_Kent

We got a 2nd letter about overdraft changes dated 2 Nov - saying ''replaces all previous letters' so we needn't have tried to understand the first ~10 pager.
We contacted HSBC online to say we didn't agree to move to the new terms, because the letter suggest 'an arrangement fee' of £25 will be deducted from our account_ but does not say when or how often.

We also whinged that the letter signed off 'We are pleased to have been of assistance', when it is blatantly obvious that the letter was sent unsolicited to serve HSBC interests and not ours...

Lets see what they write.

DJ

PS received an unsolicited letter with credit card info, claiming it was in response to our enquiry... we had made no such enquiry...

Cheeky ..so and sos... have messaged them to ask date/time and how our 'enquiry' was made..

Caladan

I wont get into a debate about overdraft charges as a whole, personally I agree with them to an extent but find them excessive in certain situations.

First thing I'll say is this, when a Bank charges you, it isn't personal, and trust me, those £25 fees sure as hell don't hit staff pockets. However, we're the ones who review the accounts and as such understand why the fees are charged.

In HSBC, the Annual review was introduced NOT to generate revenue via charges (Most people get by on their agreed overdraft, the fee is only generated if overdraft increases are requested frequently), but to ensure the overdraft is necessary for the customer.

For example, at the moment I'm £100 overdrawn in my Nationwide account, I haven't used the account for months but my overdraft is "Until further notice." Theoretically they could never get that money back, however seeing that I don't pay in to that account they're simply losing more and more on it (balance + interest).

From that respect, I would EXPECT to pay a fee to keep the overdraft facility there.

The UK has been desensitised to paying for banking to the extend that people complain about every fee they're expected to pay. We offer overdrafts free, debit cards, cheque books, counter service, internet banking, telephone banking, statements, even tax returns, all for nothing.

Is it therefore wrong of us to charge for reviewing your lending position (which like I said we only do if it's frequent), or for spending 20 minutes writing out a bankers draft and performing the necessary checks?

Yours,
Customer Services Officer - HSBC