Lloyds bank overdraft interest

thelawnet

In 2020-2022 the following happened:

• I was outside the UK
• I have a Lloyds current account, which was in credit
• It was not my main account, but at the time was funding a small monthly credit card bill
• Sometime during this time my phone was cut off by Three, due to being outside the UK too long, which meant I was unable to login to my online banking, as Lloyds wanted it to be verified by sending a text message
• In January 2021 a charge was taken by a direct debit of £400, whereas I was unaware that this charge had been taken
• this resulted in daily interest of 49.9% EAR
• I was unable to login and was not aware that the account was overdrawn.
• Eventually in February 2022 I managed to get a working SIM card, and funded the account.
• The total interest charged was £158.07

I previously spoke to someone from Lloyds while overseas and they said they would be able to refund me £100. 

I have just spoken to someone on chat and they said £30.

Any thoughts on what would be achievable here, i.e. £100 or £158.07?

dunstonh

Any thoughts on what would be achievable here, i.e. £100 or £158.07?

To be honest, in the scenario you have given, you are lucky to get anything as interest is rarely refunded and Lloyds are not at fault for anything here.

Typically, a non-fault goodwill gesture from Lloyds is £25-30.    If you have multiple products with Lloyds (insurance and investments) then they will often move towards £100.    They have an internal client profitability marker, which often dictates the size of the goodwill gesture.

CliveOfIndia

I suspect that the offer of a refund from Lloyds is a goodwill gesture rather than contractual.  Viewed objectively, the facts are that you let your account go overdrawn and they charged you interest according to their published T&Cs.  It's not their fault that your phone was cut off - if you knew your were going to be out of the country for an extended period, you should have made alternative arrangements to service your bank account.

I think you should accept whatever refund is on offer and be glad of it.

I hope this doesn't sound harsh or judgemental, that's not my intention - just an appraisal of the facts based on the information you've given.

Brie

CliveOfIndia said:

I suspect that the offer of a refund from Lloyds is a goodwill gesture rather than contractual.  Viewed objectively, the facts are that you let your account go overdrawn and they charged you interest according to their published T&Cs.  It's not their fault that your phone was cut off - if you knew your were going to be out of the country for an extended period, you should have made alternative arrangements to service your bank account.

I think you should accept whatever refund is on offer and be glad of it.

I hope this doesn't sound harsh or judgemental, that's not my intention - just an appraisal of the facts based on the information you've given.

This is where current banking data protection falls down.  If you get caught out or even when you know you won't have your phone available there is no way to contact your bank when you're out of the country.  I can't do any banking when I'm out of the country if my online service requires a text verification as I know that my phone number isn't working.  Haven't tried it but do pin sentries work when one's overseas?

Banks need to find a way to make access possible when these things happen and if they can't then they have to accept that charging excess amounts of interest or fees is unacceptable.  

Nasqueron

Brie said:

CliveOfIndia said:

I suspect that the offer of a refund from Lloyds is a goodwill gesture rather than contractual.  Viewed objectively, the facts are that you let your account go overdrawn and they charged you interest according to their published T&Cs.  It's not their fault that your phone was cut off - if you knew your were going to be out of the country for an extended period, you should have made alternative arrangements to service your bank account.

I think you should accept whatever refund is on offer and be glad of it.

I hope this doesn't sound harsh or judgemental, that's not my intention - just an appraisal of the facts based on the information you've given.

This is where current banking data protection falls down.  If you get caught out or even when you know you won't have your phone available there is no way to contact your bank when you're out of the country.  I can't do any banking when I'm out of the country if my online service requires a text verification as I know that my phone number isn't working.  Haven't tried it but do pin sentries work when one's overseas?

Banks need to find a way to make access possible when these things happen and if they can't then they have to accept that charging excess amounts of interest or fees is unacceptable.  

There is a big difference between someone being on holiday and having a temporary issue and someone moving out of the UK for so long the phone company stopped the contract because it was a breach of the terms - likely as it was also for OP leaving the UK but keeping a UK bank account. They could easily have got a local SIM and used that, or app based authentication