Is Alliance & Leicester an EVIL bank?

suze200

I think so and this is why.

They have changed their O/D on current accounts specifically to avoid being stung for unfair bank charges and make even more money.

This is how:

You get an overdraft at 0% interest – sounds great

If you go overdrawn you get charged 50p/day (max £5/month) - not too bad you might think. BUT if you work that out as equivalent % interest the figures are huge.

Say you have a £100 O/D limit and are in the red up to that limit for at least 10 days every month. Over the year charges = £60 which is equivalent to 60%

If you went overdrawn by 1 penny for 1 day every month it will cost you £6 or 5000% (yes I know, technically there’s no such thing as more than 100% but I’m making a point.)

If you went 1 penny in the red every month for at least 10 days that 12p would cost you £60 or 50,000% THAT’S right FIFTY THOUSAND % :eek:

As earlier posters have found if you go over your O/D limit by just 1 penny it will cost you £5/per day. Do that for 10 days every month for a year and 12p costs you £600. I can’t work out the % because it’s too enormous. Be over your O/D limit by 1p for 1 whole month and it’ll cost you £155!

So you hardly need to be reckless spender to be hit with huge charges and there is absolutely nothing you can do as the charging structure is VERY VERY clear in the overdraft T&C (however you have to really hunt around the A&L website to find them).

This makes the bank far more money than say 15% interest as then you only get charged that on the amount you actually borrow, rather than a daily rate. Also exceed your O/D limit with other banks and you now get charged £12. How long will it be before all banks start similar charging systems. Is this is the price we will be paying for reclaiming all those unfair bank charges?

To be fair you can make it work in your favour. Say you are O/D by £1000 /month but stay within your limit it will only cost you 6%. The higher the O/D the lower the equivalent %

BUT I HAVE YET TO TELL YOU THE MOST EVIL BIT……….:mad:

From being small my son has always said he wanted to be an engineer when he grew up. We were encouraging him to go down the A level and degree route as he is easily bright enough. However despite our best efforts to persuade him otherwise he left school at 16 to start an engineering apprenticeship with one of the leading pharmaceutical companies. His reasoning was that he didn’t want to get into debt and this way he would be paid to learn and still get a degree as, for the best apprentices, this was actively encouraged by his employer.

He decided on the A&L Premier 21 account for his salary to be paid into as this was one of the few current accounts for under 18s offering a debit card, which meant that he wouldn’t have to carry a lot of cash around all the time. As an under 18 if there was no money left in the current account (happens very occasionally since he passed his driving test and acquired a girlfriend) the card was refused if he tried to withdraw cash or use it in a shop. So he’d borrow a bit from me, never more than £10

However he reached 18 on 13 May and has just been hit with £33 charges. When he complained he was told it was because he gone over his overdraft limit. When he said he hadn’t got an overdraft they said oh we’ll give you a limit of £100 then. He had been 22p overdrawn for 11 days because as soon as he was 18 they stopped blocking the card if the balance was zero ! (the daily rate for exceeding your O/D is £3/day on this account)

He has learnt 2 very valuable lessons…ALWAYS READ THE T&C VERY CAREFULLY, and DON’T GO OVERDRAWN if you can possibly avoid it. He now banks with Nationwide!!!!!!!!!!!

YorkshireBoy

Look on the bright side. If this has revved him up half as much as it's revved you up, he isn't going to do it again.

Is this is the price we will be paying for reclaiming all those unfair bank charges?

Summed up by "be careful what you wish for"?

He now banks with Nationwide!!!!!!!!!!!

Have they introduced their 'bullet-proof' T&C's yet?

Grade_A_Reject

I'm currently using £2932 of my £3000 O/D limit with them for which they're charging me £5 a month. Egg are paying me 6.05% to keep this in my ISA so I'm doing ok out of A&L's evil plan.

suze200

Isn't that what I said at the end of the post? I agree with you absolutely. The issue is he went 22p overdrawn 2 days after his 18th birthday and it him cost him £30. You can't even apply for an O/D if you are under 18.

eth01

imo A&L are pathetic and don't deserve your custom...;)

olly300

suze200 wrote: »

Isn't that what I said at the end of the post? I agree with you absolutely. The issue is he went 22p overdrawn 2 days after his 18th birthday and it him cost him £30. You can't even apply for an O/D if you are under 18.

Legal loophole.

The bank can't charge him for going overdrawn if he is under 18 but soon as he hits 18 they can enforce that part of the contract on him.

Scottishmummy

I'm just about to post a new thread about how awful A & L are!

suze200

olly300 wrote: »

Legal loophole.

Hi olly300, I know. That's why he just changed banks instead of trying to argue the point. With a bank charging % intrerest a 22p O/D would have cost nothing. You live and learn and he has definately learn't

Grade_A_Reject

I know £30 is a lot of money for the amount overdrawn but if it makes a suitable impression on him then hopefully it will be enough to stop hime ever going overdrawn again. I wish I'd learnt that lesson at an earlier age!

I don't think any bank is any less evil than any other. Try googling "I hate [insert bank name here]" and see how many hits you get. Once you know the system and it's pitfalls and potential rewards you can then play the banks at their own game.

My 20 yr old son got hit with £30 of charges from TSB for going overdrawn by a tenner for 1 day. He took his business elsewhere (A&L ironically) and took advantage of their £25 refer a friend scheme.

You could try the official bank charge reclaiming route that others on here have done.

amiehall

it's hard though. when you're a child, you take advantage of banking that won't allow you to become overdrawn. you spend right down to zero and most people just stop when it's bouncing, that's basically how the budget works. then you get to 18 and noone really tells you that it's not going to work anymore. i don't know anyone who's not been hit for that at least once, it's just something that you've never had to deal with before and obviously it's your responsibility to deal with your money but similarly, someone does need to tell you really clearly how your account changes when you get to 18 and no, i don't think all those updated t&c leaflets count.....

DGJsaver

All banks are evil , it`s just that it takes countless minutes to get throug to a human at most of them , so i went to an evil one called Natwest , but i can phone the branch in my home town , and for some reason thats the sort of thing i like , a bit like when i was a teenager and you could take fivers out of the ATM at Midland Bank