Barclays slash overdraft charges

Bumear

My radio alarm clock woke me up thi morning during the news as always when i heard this

http://ukpress.google.com/article/ALeqM5gOvmGEalniN95C0EWtSyhNp34-GA

:j :j :j :j :j :j :j

dorien

Just read on AOL news that barclays are reducing the £35 charge for going over your overdraft limit/returning d/debits etc to £8 from August. This is great news as it now seems the banks are admitting there charges are to high. Great news for the reclaiming case going on. :j

nickmack

dorien wrote: »

Just read on AOL news that barclays are reducing the £35 charge for going over your overdraft limit/returning d/debits etc to £8 from August. This is great news as it now seems the banks are admitting there charges are to high. Great news for the reclaiming case going on. :j

They will certainly not admit the charges are too high. They claim it's because they've listened to what customers want.

The reduction in charges is the headline, but other measures such as stopping paying interest in current accounts and increasing the overdraft rate are also being implemented.

I think it will help those who go over the limit for a few days and normally get hit with £35 charges, which I think is good.

I wonder if it's a gesture to try and prevent further investigation by the OFT into historic charges?

The other part I don't agree with is charging if the payment is rejected, which will continue. This isn't any kind of service. If the payment is allowed through when insufficient funds are available then this could be considered a service for which a small fee may be payable.

lindilou39

dorien wrote: »

Just read on AOL news that barclays are reducing the £35 charge for going over your overdraft limit/returning d/debits etc to £8 from August. This is great news as it now seems the banks are admitting there charges are to high. Great news for the reclaiming case going on. :j

Good news yes...but they also said they are going to start charging an account fee but they havent said what they will be charging yet so dont hold your breath, and you can bet your bottom dollar that the rest of the high st. banks will follow suit as we all know what a bunch of sheep they are.

Erv

It's good news, but they've just 'shuffled' things around, and if anything they have made things more complicated and have missed the point. Not only are consumers looking for fairer charges, it also has to be transparent.

They'll recoup their money with the 'personal reserve' of 250, and if I've understood it they are charging 22 + interest (27%?). Plus they don't make it clear if they do a credit check before providing this 'reserve'. Many years ago when I called my bank to extend my overdraft, they would do a credit check.

I also don't understand why they would let people make up to 4 unauthorised withdrawals (over their overdraft limit). I then thought that some people could make 4 purchases in a day without realising they were going over their limit. However I think a fairer way of doing this, is keep the up to 4 withdrawals limit, but inform your customer, i.e. when you make that first unauthorised withdrawal, your bank sends you an sms message 'Please do not use your card, you have exceeded your overdraft limit and incurred a charge of 8GBP'. They could charge say 50p for the sms or include it in the 8GBP charge.

Banks need to understand that this solution gives their customers the opportunity to manage their finances, if customers choose to ignore advice, then by all means charge them. There's never been a better time for banks to understand that they can no longer be complacent with their customers. I think my idea of sending an sms message would be a big hit with customers!

Sugarfree_Babe

This week I had a letter from Barclays to say they are changing the terms and conditions of my account.

They say that in addition to my overdraft facility I will have a new "reserve" facility on top of my overdraft. If I go over my overdraft and into reserve by even a pound, I will be charged £22 for every five days I am in the reserve.

This looks to me like excessive charges under another name. I have never yet received a charge because I have been able to manage my money (with a certain amount of juggling).

I am worried for the future because of the rise in food and fuel costs. I live in a rural area and have a 20 mile round trip to go shopping, doctor etc and not even Tesco delivers to my village.

These charges will affect the poorest in society.

chipbeck

Sugarfree_Babe wrote: »

This week I had a letter from Barclays to say they are changing the terms and conditions of my account.

They say that in addition to my overdraft facility I will have a new "reserve" facility on top of my overdraft. If I go over my overdraft and into reserve by even a pound, I will be charged £22 for every five days I am in the reserve.

This looks to me like excessive charges under another name. I have never yet received a charge because I have been able to manage my money (with a certain amount of juggling).

I am worried for the future because of the rise in food and fuel costs. I live in a rural area and have a 20 mile round trip to go shopping, doctor etc and not even Tesco delivers to my village.

These charges will affect the poorest in society.

Try not to worry too much about it. Barclays won't be. There terms don't seem so bad you want to see the new charges for Lloyds.

kezflake

I have just recived an update from my bank informing me they are changing there overdraft charge policy.
I am to be given £150 leeway of using my overdraft limit and will be charged £22 every 5 days I am using this new facility.

Is this an underhand trick to get out of future over limit charges? It was the first thing I though of after opening the letter.

krisskross

How is it underhand? They are giving you advance notification of what it will cost if you spend money you don't have. Stay within your limits and it won't cost anything.

Nathan_Spleen

krisskross wrote: »

How is it underhand? They are giving you advance notification of what it will cost if you spend money you don't have. Stay within your limits and it won't cost anything.

With respect,, If you had read the post properly you'd clearly see that what Kezflake was asking was: is this attempt by Barclays to circumvent any OFT ruling on charges?

Think before you post.

tafkam

I have received a similar letter today, and am equally unimpressed.

It strikes me that this is just penalty charges made legit.

If I make a mistake and accidentally go overdrawn by £1, I'll no pay a £22 fee the next day.

More likely, if I go over by £5 one day because another payment in was delayed by a day, I'll pay a £22 fee the next day. If I then don't realise this has happened in time, 5 days later I could be hit with another £22 charge.

As it is, I have a large overdraft which is unused, so this won't directly affect me, but rest assured I have returned the form stating that I don't want this extra "service".

What would the interest rate have to be on these amounts to recoup such great funds for Barclays?
Or more to the point - by just how much would I have to go overdrawn to accrue £22 of unauthorised overdraft interest in just 5 days? About £7000 by my reckoning.