Natwest Student Loan interest and fees spiralled - causing debt

costelloe16
costelloe16 Posts: 24
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I had a Natwest Student Overdraft 10 years ago somewhere between £700 to £1000, and was originally paying back at £100 a month for a bit, then reduced to £50 a month for 2 years and eventually £10 a month for 7.5 years ( I forget I set up the payment!). So I can see from my current bank that I have repaid £2500 into my overdraft in total. However instead of having credit in my account, I recently received a letter saying I was actually £1200 in debt from a 3rd party. 

My account with Natwest is now locked so I can't log in to see my transactions, the 3rd party debt agency have been messing me around for approx 3 months now and still haven't sent me a transaction statement only the amount owing, the only thing that Natwest could tell me over the phone was that in the last 12 months I have been paying 
£35 interest out a month!!   

I believe that somewhere, somehow my account has started charging fees so high without me knowing it has wiped out all repayments. Is there any type of process that helps people in these situations - i.e I can show that I have not used the account, I have paid constantly for 10 years and taken nothing out, I paid somewhere between 2 to 4 times what I originally borrowed and the only reason I could be in this situation is fees and charges? 

Has anyone else had experience of this?

In particular - if I had realised this before getting the letter from the 3rd party debt collector I would be saying I should be claiming fees and charges back. Is it possible to go back with, "actually I believe they owe ME money?" 

Comments

  • You can't claim back fees or charges so no, they don't owe you money

    You should be on a financial hardship case with the bank but seems they have sold the debt on so now need to pay the debt collector

    If you were paying £100 a month then £50 a month was this a formal debt management thing or did you just decide to make token payments?
  • DullGreyGuy
    DullGreyGuy Posts: 9,029
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    Natwest overdrafts are currently 39.5% interest and if you were only repaying £10 a month its very possible the interest was more than the repayment meaning the balance was increasing and at some point may have exceeded your agreed overdraft limit.

    A student account only remains a student account for so long and you say it was 10 years ago! Presumably you ceased to be a student a long time ago too.  Once your student and 1st year graduate status has expired you go from their preferential rate to standard rate of interest.  
  • dunstonh
    dunstonh Posts: 115,638
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    I had a Natwest Student Overdraft 10 years ago somewhere between £700 to £1000
    So, that debt has probably grown to more than double that in the period due to interest. 

    I believe that somewhere, somehow my account has started charging fees so high without me knowing it has wiped out all repayments. 
    You should know because:
    1) it would show on your statements
    2) they write to you when move from student terms to standard terms (student being heavily discounted)

    In particular - if I had realised this before getting the letter from the 3rd party debt collector I would be saying I should be claiming fees and charges back. Is it possible to go back with, "actually I believe they owe ME money?" 
    When you borrow money, you pay interest on it.    Overdrafts are one of the most expensive mainstream methods of borrowing.  It looks like you failed to pay enough which is why the debt didnt go down as you expected.

    Your best bet is to contact the bank and make a case to them that this has been causing you hardship for over a decade and hope they are feeling generous.


    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • adamp87
    adamp87 Posts: 849
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    Has this debt been sold to a third party or is it being chased by them?

    I would stop contact with the third party if they don’t own it and deal directly with NatWest. Request a SAR which will include all of your statements, letters and you’ll be able to sit down and break down all the charges and interest and your own repayments.

    Admittedly if you were entering hardship you should have contacted them for help but that’s gone now.

    Then if you were or are in hardship lodge a letter to their complaints department breaking down the situation, the interest/charges which have pushed you further into debt and such and they may reduce some of them or remove. They also may not but it’s worth a try.

    Sometimes life happens, have a look at debt camel for more advice.

    https://debtcamel.co.uk/get-refund-overdraft/
  • sourcrates
    sourcrates Posts: 28,514
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    To be fair, I would say the bank has failed in its due diligence to allow a customer account to continue accruing charges over a ten-year period without once reviewing it or contacting you regarding the debt you were building up.

    This should form the basis of a formal complaint to the bank, tell them you think it`s quite unfair to be left in this situation after making regular re-payments for so long, and not being told interest was still accruing.

    Mostly you must highlight bad practice to get something done about it.
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