Help! HSBC Relieved us of £100

Mattster_2

My wife has a £1,000 agreed overdraft and went over by up to £170 before we realised and paid some money in. She was over the limit for 10 days. HSBC have charged £100 (£20 per transaction while over limit).

Is this unreasonable? Seems so to me - that's over 10% of her monthly take-home pay for the sake of £170 borrowed for 10 days. They're already getting 14% interest on the money and sent no letters or anything. They quote their terms and conditions leaflet which is of course correct, but I feel like they've robbed us.

Do we have a leg to stand on?

This isn't the first time they've acted unscrupulously - I still remember them charging £800 for two years unemployment protection on a £7,000 loan - fortunately I spotted that before it was too late!

soolin

Reports in various financial press articles suggest that banks are generally getting tougher with unauthorised overdrafts (which includes going over an authorised O/D) and late payments etc. You probably don't have a leg to stand on frankly.

However, it is always worth calling the bank to see if you can negotiate a partial refund for good will, they might be reasonable if this was the first time it had happened.

I recently made a visa payment to HSBC late, my first ever in all the years I had been with them and I was charged £25 for the omission, plus interest. When I called them they promised to look into my previous history, and about 5 minutes later they called me back and said they would be prepared to reduce the fine to £12.50, which was better than nothing.

It's always worth a phone call.

Soo

jimclark1967

I doubt you have a leg to stand on to be honest. The charges are there as a deterrant. If it's the first time you've been over the O/D limit you might be able to get the charge waived but don't hold your breath.

It doesn't really matter whether the charges are reasonable or not. Everyone signs up to the terms and conditions when they open an account and are free to shop around for an account with more "reasonable" penalties if they think they might be prone to going over a limit.

Doesn't make it any easier to stomach though - £100 down the drain - ouch :mad:

JC

Mattster_2

We've tried the phone call and got someone who pointed to the rule book. We've now sent a letter so will have to wait and see.

I have also in the past had a couple of late credit card payment charges (not HSBC) routinely halved after a quick phone call. If they do this, why not just charge smaller penalties in the first place - a couple of quid and no-one would bother complaining or feeling aggrieved. These penalties do not represent costs incurred by the bank - they are nothing less than fines. What right does a commercial company have to fine its customer 5 x parking tickets (=£100) for a minor offence?

lipidicman

I couldn't agree more JC

To the OP: follow the advice if this is the first time. Be nice and reasonable and don't accuse them of 'robbing' you and you should be able to get a reduction. However, this will only work if you are otherwise a model customer.

grumbler

Abbey National - £260 bank charges. What do I do?

Royal Bank of Scotland Bank Charges - WARNING!!

' I can't believe banks can get away with this...'

A&L Current Account overdraft policy

If this is your first ‘blunder’ you have a good chance to have at least 50% of charges refunded.
My traditional position is:
It is very unreasonable and reckless to bank near the edge of £1000 (or any other) overdraft. Agreed overdraft limit is your safety buffer, but not a source of borrowing money. There are other more convenient, safe and cheap ways to borrow.

P.S.

Mattster wrote:

... why not just charge smaller penalties in the first place - a couple of quid and no-one would bother complaining or feeling aggrieved...

...and no-one would bother to avoid doing the same next time.
Any unauthorized borrowing is wrong. Penalties must be tangible to deter customers from doing this again.

lipidicman

Precisely Grumbler.

and...

Mattster wrote:

What right does a commercial company have to fine its customer 5 x parking tickets (=£100) for a minor offence?

the legal agreement formed by your signature on the T&Cs.

Mattster_2

Grumbler - I couldn't agree with you more about banking near the limit. I myself always leave a buffer (in credit rather than debit) and max out the interest-free credit cards to make extra money. Unfortunately, I am not writing about myself or I would be kicking myself for letting it happen!

The problem is if you are on a very low income, you don't necessarily have the luxury of leaving £300 sitting in your account being a buffer. One small mistake and you've had it. These high charges compound the difficulties of the low income.

We are in the process of remortgaging, so I am going to sort out this overdraft once and for all. Problem is, it simply moves the danger line from -£1,000 to £0 (I can't leave the overdraft facility in place or it will simply get spent again!) I suppose a new overdraft limit of £200 with a renewed effort not to use it might work, but I can see the £200 being spent within months.

On the deterrent effect of penalties, is borrowing an unauthorised £170 twice as bad as speeding past a primary school? I just think it's too harsh. If the bank were really worried about their money, they'd soon stop the transactions happening at all!

grumbler

Mattster wrote:

Grumbler - I couldn't agree with you more about banking near the limit. I myself always leave a buffer (in credit rather than debit) and max out the interest-free credit cards to make extra money.

:beer:

The problem is if you are on a very low income, you don't necessarily have the luxury of leaving £300 sitting in your account being a buffer.

Even low-income families spend thousands per year. Having £300 buffer is not a luxury, but just a matter of self-discipline.

(I can't leave the overdraft facility in place or it will simply get spent again!) I suppose a new overdraft limit of £200 with a renewed effort not to use it might work, but I can see the £200 being spent within months.

I cannot understand this. I have £1000 and £1500 overdraft limits and I never use even first £100 of them. I just don't spend more than I can afford.

If the bank were really worried about their money, they'd soon stop the transactions happening at all!

This was discussed many times. Bank cannot do this with full-scale accounts. They can (and will do this eventually) downgrade your account to a basic one without cheque book, overdraft, DDs, SOs and with Visa-electron card. Will you be happy with this? (I mean general 'you', nothing personal)

Alfie_E

lipidicman wrote:

the legal agreement formed by your signature on the T&Cs.

No. The relevant clause in the T&Cs is a statement that the bank believes it has the right, not that it necessarily does have the right.

I'm sure Mattster will see from all the threads provided by grumbler, that it is possible for his wife to stand her ground, and dispute the charges. There are writers in the financial press who would love this to be tested properly by a court. But, you know what, in all the articles I've read, when the bank was pushed, it backed down.

Investico

I'm glad someone else agrees that the banks do act in a less than pleasant way sometimes and that they shouldn't simply be able to hide behind the small print. It's not like we take out bank accounts because we want to, is it? They have us over a barrel.

Grumbler, I too have a £1,000 overdraft facility which I only very exceptionally touch. But then I earn a good income and am also financially wise. I suspect you are too - hence why we are both visiting this site. Not everyone is as fortunate as this and makes the odd innocent mistake. Is it fair that these people are fined more than other people who commit deliberate crimes?