First Direct £25 overdraft fee

greeneggsandham

I wouldn't have thought it would cost them £25 to allow the computer to automatically extend my overdraft limit by £6.50 for two days either, but I see your point.

I think the thing we sometimes forget is that when banks provide 'fee free' banking, they are not, by any stretch of the imagination, running a charity service. We pay for the service by storing our money with them, which they then use to make investments and provide the mortgages which they charge interest on and make a profit. Even though I went over my limit by £6.50 for two days, 99% of the time my account is in credit and they are making money from me (FD credit interest on current accounts is shamefully low). This is why simply charging interest on overdrawn balances (with no fees) is a fairer system because it accurately reflects how much and for how long, the bank is bailing you out and vice versa. You pay me interest when I'm in credit, I pay you interest when I'm in debit. Simple. Otherwise, I pay the same fee for being £6.50 over for two days as I would pay for being £65 over for 30 days.

NB, the best part about it was that the reason I went overdrawn was because of a standing order from my first direct current account to my first direct regular savings account, which I have been covering by transferring the monthly amount from another (first direct) savings account but just did it two days late. So they were paying the money from themselves, to themselves. :rolleyes:

mooniekel

I had a letter from HSBC on 1st of April saying they had reviewed my overdraft, were keeping it the same (£100) and were charging me £25 for an Overdraft Arrangement Fee. How unfair is that? My overdraft is the lowest its been for years and I've never had one of these letters b4! Has anyone else had a similar letter fron HSBC? Do you think this is their way at getting back at us for re-claiming our bank charges?

greeneggsandham

mooniekel wrote: »

I had a letter from HSBC on 1st of April saying they had reviewed my overdraft, were keeping it the same (£100) and were charging me £25 for an Overdraft Arrangement Fee. How unfair is that? My overdraft is the lowest its been for years and I've never had one of these letters b4! Has anyone else had a similar letter fron HSBC? Do you think this is their way at getting back at us for re-claiming our bank charges?

Its almost certainly a way of clawing back some of the money they are going to lose from us reclaiming our bank charges! Probably minor compared to the sticky situation banks are in at the moment with the "credit crunch" but this is a problem of their own making and we shouldn't have to foot the bill (though we already are via our taxes every time the government bails them out). I'm sure that's probably a subject for a different thread though. Right now banks need people to save money with them to provide some much needed cashflow to prop up the mortgage market, and its my guess that if you have any savings products with them as well, and you threaten to take your savings elsewhere, they may decide to be a little more lenient with the current account. Unless they all start doing it, in which case we won't have much choice.

gravitino

I have just received my monthly statement. For each of the five days on which I exceeded my overdraft limit, first direct has charged me £25. Total charge: £125 Plus, of course, there's the debit interest -- just over £8. How can this have any relation to the costs that first direct have incurred in servicing my overdraft???

I joined first direct 15-20 years ago, because I was so upset about Nat West charging me around £30 twice for sending me a letter to tell me I was overdrawn.

But this is far worse. Not just is the sum significantly larger, but first direct haven't been sending me a letter each time I exceed my limit. Instead, they accumulate the charges and tell you the total at the end of the month.
I hope that customers desert first direct in their thousands. Can anyone suggest an alternative bank with online and telephone banking?

greeneggsandham

gravitino wrote: »

I have just received my monthly statement. For each of the five days on which I exceeded my overdraft limit, first direct has charged me £25. Total charge: £125 Plus, of course, there's the debit interest -- just over £8. How can this have any relation to the costs that first direct have incurred in servicing my overdraft???

Wow, now THAT is bad. From what I have read of their charging structure, the fee they have charged you sounds more like a mistake. When you exceed your limit, this is taken as an informal review of your overdraft limit and they will increase that limit for 30 days. So the new limit should have covered you for the whole five days within one month. The only exception I can think of is if your account kept going more & more overdrawn during that period so they had to increase the limit each time. They may argue that they therefore had to review your limit five times. Its definitely worth giving them a call a) to find out if it was a mistake and b) to try to persuade them to be fair and just charge you the once. Good luck!

chardanna

See also

http://forums.moneysavingexpert.com/showthread.html?t=871917
I have logged aformal complaint with HSBC RE this fee, & waiting a response- although pretty sure the girl didn't even log it ( but that gives me more to take to stage 2 compalint)
Will let you know when I get respone!

VITI

Oh dear - I said yesterday that I had never gone over my overdraft limit, and discovered that I had paid out about 280.00, and transferred 300.00 back into my account, but not till the following day!
I have also found out that the overdraft charge system is really weird! My bank rang me today and explained that you are allowed to have an "unauthorised" overdraft now, but they will charge you 25.00 for that as soon as you go into the red by a penny or two. If you then remain in the black for 6 months, you can ring up and ask for an overdraft, and if they agree they will not charge you if you stay within that amount! You can ask for one FREE overdraft facility in 6 months. I still think this is all a bit outrageous - the bank told me it "was a new way of thinking about overdrafts" you are "not penalised in any way" for going over the limit, - it is just an arrangement fee, and they like to call the "unauthorised" overdraft an "informal" overdraft instead! Has anyone else had trouble understanding their convoluted minds?

Milarky

Can anyone clarify (before I phone First Direct up) whether they also count going beyond your overdraft (and an 'informal' overdraft request) for part of a day only?

Today was the second time recently (previously in Nov 07) I have had a payment go out - which resulted in an intra-day balance over my limit. I've transferred money in this morning and the balance is restored to health. Looking at FD statements they don't show intra-day balances anyway (NW, for instance, does) so I won't have been delinquent overnight - and when I phoned up the last time this occurred they said I wouldn't be charged as I had brought my account back to balance in time.

(So have things changed in this area or will I be OK?)

eira

Glad of this thread. Have been a 1st Direct customer for nearly 20 years-since they opened. Have an OD facility of £100 even though they advertise a 'fee free OD of £250' . I got told about the £25 'arrangement fee' but can't make heads nor tails of the answer.Am I billed for £25 every time I go OVER the £100 or INTO the £100. I paid to 'arrangement fees 'in February for being £35 over the limit total =£50.They now want to bill a further £25 'arrangement fee' even though I don't have an OD.I was told that if I waited until October it would be 'free' again.But the answers are very evasive.I've declined the OD facility as this would have cost £75 in a 5 month period.At least there's a limit on A &L ODs even if it is £5 a month.First Direct also seem to be sneaking this in which I'm not too chuffed about.Anyone else made further sense of it ?

moominlaura

I have just looked at my account online and have noticed £25 has been taken by my bank 'HSBC'. I phoned to find out why as my overdraft has been in place for the last 3 years and they said they had sent a letter explaining their charges were changing.

He also said that if they didnt receive a response from the customers they would assume they had no issues and go ahead and take the money.

Well, what about the people who didnt received the letter! They wouldnt have any choice then!

He said there was nothing he could do, and that i should write in.

It doesnt matter that the money has already been accounted for as i have a hotel bill to pay this month they are still not going tp put the money back in until the matter has been resolved!

I am so angry with them, if i didnt think the other banks were going to follow suit, I would change!