HSBC Overdraft Review - beware

dipalipraveen

Hi,

I received a letter from HSBC today saying that they have done an annual review of my overdraft and the changes are outlined.

There was no change to my overdraft limit nor did I ask for a review. However HSBC in their infinite wisdom decided to charge me £25 for the priviledge of the review.

When I called and argued about it, I was told that overdrafts are reviewed annually (maybe) and after 1 year are charged. Now, since I have been an HSBC customer only for 6 years and have had an overdraft facility for 2 without ever been charged I do wonder when and how this was made. I was assured that this has been the banks policy for some years!

Either I was priviledged in slipping through the net or they are mistaken.

In any case, I pointed out that other banks offer better facilities at no charge (FD!) and they are pricing themselves out. That did not seem to make a difference, so I cancelled my overdraft having confirmed that I was not going to be charged for the change.

So beware and call on time if you dont want to get charged unnecessarily

Dipali

Money_Man

I just posted the same thing below, so you cancelled and they agreed not to charge? I think I may do the same but i still require a 500 buffer on ocassion.
I will give it some thought but pleased to hear you were as outraged as me!

Tooting

A couple of weeks ago I received a letter from HSBC informing me that they had carried out a review of the overdraft on our joint account and that they were charging us £25 for the privilege. We have had this account and the £100 overdraft for over 7 years and there has never been any sort of arrangement or review fee. The letter stated that the overdraft facility would now only apply for one year - I guess so they can charge us another £25 next year. To be honest there is no way that I would pay a £25 fee for the use of such a small overdraft. What annoys me as well is that in the letter it states that they have carried out a review and are charging us the cost (but we have not requested a review and none of our details have changed to pre-empt one) - but when you phone HSBC they state that the fee is now part of the general terms and conditions of having an overdraft.
I do not see why i should now pay more when they are not providing any additional service.
Anyway, the upshot of all this is that after threatening to close my accounts they have now agreed to refund the fee - I haven't paid it yet - it is due to be charged in 2 days - if they had not offered to refund it I would have just cancelled the overdraft.
What I object to is that it really does look like they are just trying to find ways of making up for the shortfall in income arising from the court case on overcharging.

jaseuk

Hi,

I've also received one of these letters today informing me that my overdraft is being given an annual review. This is the first time after over 7 years of banking with HSBC that this has happened! They're saying also that they're going to charge and arrangement fee of £25!

...as previously advised we are now carrying out the annual review of your overdraft facility"

I've not received a letter or anything from them "advising" me of this. The letter also states:

If you feel that the level of your existing overdraft facility is sufficient, you need take no action at this time. We will arrange the new overdraft automatically.

So.. the way I read it is that no changes are going to be made to my overdraft, it will just stay the way it is but I'm going to be charged £25 on 11th May 08 but for what? Receving a letter? The review of my account when I didn't ask for it? Someone to click a button? :mad:

Jason

Tooting

yep, that it was it looks like - HBSC have performed a review - unrequested by you - and they are going to charge you for the pleasure. With the letter informing us about the £25 charge they included a copy of their fair fees policy and there is also something in the letter about how they won't charge an arrangement fee unless you make repeated requests to change the terms fo your overdraft. We have never changed the terms of our overdraft - it was set up 7 years ago when we opened the account. It really does seem like HSBC ripping its customers off. There is no justification for imposing this fee all of a sudden. I really urge you to cause a fuss about this - threaten to close your accounts etc - it is unacceptable and they should agree to refund the charge as they did with me.

POPPY283

I got the letter - I'm moving my graduate account elsewhere. I spoke to a member of staff in an HSBC branch, he said it was probably them trying to raise funds because of the credit crunch! the cheek! He said there'd be no charge for closing my account.
It's pure arrogance that HSBC think they can do whatever they like and people won't leave.

Cuxtongirl149

The same thing has happened to me Poppy283...I just rang them and they said they have to review it every year, although since I only graduated in July I haven't had the graduate account very a year so surely they reviewed my account and overdraft facility when they changed it from student to graduate so are just charging me for the fun of it I think...the woman on the phone said they had to do it. I think I will also change accounts, I was thinking of changing to Lloyds TSB as they has £2000 interest free as opposed to HSBCs poxy £1500 and they hopefully won't charge me £25... absolutely ridiculous!!!

Late8

I have just received this letter also- I'm on a graduate account with a £1000 interest free overdraft. The account only started in June and they are already carrying out a 'annual' review.

This £25 charge for just sending me a letter confirming what i already know has got me very annoyed. HSBC has given me a poor service from day one.:mad:
I can understand if I went past my overdraft limit a review and setup fees may be charged (wich is a con itself- its one computer decision!) but to charge this fee for nothing is an outrage!

Anyway and graduates in the same position with HSBC note: I'm moving to NatWest- they are giving me a 3year long graduate account with a free overdraft and services to help me pay off debts + no out of the blue annual reviews!"!!!

MOVE BANKS

Halloway

I got the letter warning me about the review about three or four months ago. That letter claimed that they have notified me last year that this review would happen but I did not receive that notification. When I received the letter a few months ago, I phoned them and cancelled the overdraft facility which had been available to me since I graduated in 1998.

This is a fairly cynical move by HSBC. They have done it this way because if they unilaterally removed a large number of overdrafts (which is the practical upshot of their actions) there would be a substantial amount of negative press.

I am in the process of moving my last few DDs/SOs to my joint account so I can close the account and I will be closing my HSBC credit card also. It's clear to me that HSBC don't want my business and I am happy to oblige. I'd urge anyone else who is unhappy with HSBC to look around for another account (I am very happy with my NatWest current account).

Norton_Blade

I got a letter through from HSBC and I'm also on a graduate account.

However, they said my overdraft was going to remain interest free until October 2009 when they will review it again and as I had not requested any changes, there was no arrangement or review fee.

I have reduced my free overdraft allowance to £500 so perhaps they aren't as keen to get rid of me?

ShelfStacker_3

Tooting wrote: »

What I object to is that it really does look like they are just trying to find ways of making up for the shortfall in income arising from the court case on overcharging.

Strictly, no. That's part of the reason why, the other reason is probably that banks are trying to limit the amount of any credit facilities they may have unused at any one time. A £25 fee could well make some people question why they have an overdraft they never use (I personally couldn't, it'd be too tempting for me) or make the people who use their overdraft question why they use it.

(This isn't an official HSBC view, fwiw. But I do know there are worldwide regulations coming into force on the issue of unused credit, the name escapes me atm.)