Natwest Interest hike on Arrange overdraft

Kained

Dear all,

I recently received an email from Natwest informing my that my Black account arranged borrowing interest rate will increase from 14.89% to 39.49%

I seems to me to be engineering a situation where they wish me to close the account or take a loan out with them to service the current overdraft. They haven't offered me any alternatives to limit costs.
I use the Black account predominately because of how flexible it has and clear the OD once a year (not an efficient way of managing money i accept). I have had it for around 25 years.

Am I justified to complain to the FCA?

It would be great to hear feedback on this or if others are in the same situation?

MovingForwards

FCA won't do anything, the FSO won't do anything, banks have been forced to change the way O/Ds are done.

eskbanker

Nothing stopping you from complaining but I can't see that there's anything they've done that breaches Ts & Cs, etc.

All banks are in the process of changing overdraft charges, at the instigation of the FCA, and practically all have increased the rate substantially.

NatWest's change was announced a week ago, so all NatWest customers are in the same boat and they're not picking on you: https://www.moneysavingexpert.com/news/2020/01/rbs-and-natwest-announce-overdraft-fee-hike-/

Edit: that article suggests that Reward Black 'only' increases from 14.89% to 19.49%, so if this is the account you have then perhaps they are picking on you.

P.S. Nearly eleven years between joining the forum and first post must be some sort of record!

BoGoF

As long as they have given the required notice then there is little point in complaining.

Suggest you do some more reading of the posts on here, most banks now seem to be increasing overdraft %. Not sure what alternstives you want them to offer. You either clear the overdraft or pay the increased costs.

Even at the reduced rate it is an expensive way to borrow money (as you acknowledge) so look on it as a chance to sort that.

LobsterMemory

You could complain to the FSA that their (the FSA's) intervention to presumably help consumers reduce their overdraft charges has had the opposite effect and could they think about the unintended consequences before forcing through such changes in the future

Won't have any effect, mind, but gives a chance to have a good rant

eskbanker

LobsterMemory wrote: »

You could complain to the FSA that their (the FSA's) intervention to presumably help consumers reduce their overdraft charges has had the opposite effect and could they think about the unintended consequences before forcing through such changes in the future

Won't have any effect, mind, but gives a chance to have a good rant

Certainly won't have any effect if OP complains to the Food Standards Agency - anyone wishing to complain about overdraft regulation would do better to deal with the FCA instead!

https://www.fca.org.uk/news/press-releases/fca-confirms-biggest-shake-up-overdraft-market

Sharon87

EVERY bank is changing their overdraft fees. I think this probably works out cheaper with Natwest as currently you have to pay £6/month PLUS 19% interest. So if you go into it for a few days of the month it's VERY expensive as is.

All banks are going to charging between 35-39% for the majority of their bank accounts soon. It's because of the new regulations coming into effect. It was designed to stop people from being charged unfairly from going into their unauthorised overdraft.

(watch Martin Lewis' Money Show on ITV Player for more information - it aired tonight)