Recent bank overdraft fees increase

brookero1981 · 1 February 2018 at 5:09PM

Hi all, appreciate this has been brought up a few times already but wondered if anyone had had any success from banks (in my case Lloyds) re the recent overdraft fees change.

My main grievance is that 2 months notice, leading into the most expensive time of the year (Christmas) was not fair notice to pay off the debt. I gave it a go but back to where I started and more. I am now being hit with £120-£150 a month charges, up from £30ish and my debt relief plan is in disarray.

I have written to the bank asking for a refund of the last couple of months and two months to pay off my overdraft at the same rate of interest as before the change (a realistic target for me) but was fobbed off with a : "Having reviewed your complaint, and based on the information available to me, I'm unable to agree that any bank error occurred". I'm not calling it a bank error, just a very unfair way to treat it's customers. Having roughly £4.50 come out of my bank account every single day is so very demoralising.

I'm loathed to take out any additional finance from them (Lloyds), they really stung me at my lowest point a few years ago and pressured a younger, more naïve me into taking a loan at 24.9% which ultimately made things worse for me.

Anyway, thanks for listening!

spadoosh · 1 February 2018 at 5:27PM

The changes where announced sometime around September if not, earlier.

The terms and conditions you signed up to allow them to make change swith notice. Youre allowed to leave without penalty (providing you repay them obviously).

Theres been a few cases of people negotiating more favorable rates for a few months, up to a year i think. However it doesnt look like its been offered to all customers. You can keep trying but it doesnt look like youll have much success.

Its designed to penalise those who are permanently in there overdraft. If it was used as an overdraft is intended the changes would probably cost you less. It seems the companies want to reduce short term liabilities.

Id recommend switching banks. Firstly theres usually bonus offers which can reduce the overdraft amount and secondly not everyone charges the same rates. I think youre right with not wanting to do a loan or similar.

Have a good look through the MSE bank pages and see if theres anything that could work for you.

As a side if you havent already post up a SOA (statement of affairs, basically a list of money in and out) and the good people here will be more than happy to rip apart youre spending to try and help you save (theyre not that mean, but will encourage you to focus on priority spending). Even if you think you know what youre doing, theres a good chance someone on here will know more.

brookero1981 · 1 February 2018 at 6:30PM

Thanks, yeah, letter was end of August, early September with the first charge coming out on November 2nd. I guess they have me between a rock and a hard place as I cant pay it off just now and it's too big to pass on to a new bank, and increases with each daily charge. I actually had to increase it 4 times last month to cover the charges. I'll work hard to pay off and leave as soon as I can.

Will have a look at the bank pages, and take a look at the SOA - that actually sounds like fun!

spadoosh wrote: »

The changes where announced sometime around September if not, earlier.

The terms and conditions you signed up to allow them to make change swith notice. Youre allowed to leave without penalty (providing you repay them obviously).

Theres been a few cases of people negotiating more favorable rates for a few months, up to a year i think. However it doesnt look like its been offered to all customers. You can keep trying but it doesnt look like youll have much success.

Its designed to penalise those who are permanently in there overdraft. If it was used as an overdraft is intended the changes would probably cost you less. It seems the companies want to reduce short term liabilities.

Id recommend switching banks. Firstly theres usually bonus offers which can reduce the overdraft amount and secondly not everyone charges the same rates. I think youre right with not wanting to do a loan or similar.

Have a good look through the MSE bank pages and see if theres anything that could work for you.

As a side if you havent already post up a SOA (statement of affairs, basically a list of money in and out) and the good people here will be more than happy to rip apart youre spending to try and help you save (theyre not that mean, but will encourage you to focus on priority spending). Even if you think you know what youre doing, theres a good chance someone on here will know more.

Westie983 · 2 February 2018 at 2:22AM

Based on what you are saying your overdraft as around £3,000. I agree that the charge is making this figure increase. The only suggestion I can think off is to pay off what you can to reduce the overdraft to under the £2000.00 mark then you will lose around £2 a day on the fees, which will help you a little.

Sadly is people who have lived in their overdrafts which has caused the banks to recall the money in overdrafts by changing the structure.

I wish you luck in reducing it, and you may find you are able to switch accounts if your OD isnt as high.

As other have said post a SOA so we can try and help to see where we can save money and help, or sell some household items to recoup and reduce some of the overdraft amount.

Westie983

Hoogle · 2 February 2018 at 2:33AM

if your on a debt relief plan I am assuming you dont have the greatest credit history surely it would make sense to switch bank accounts with no overdraft and write to the bank and ask them to freeze it and enter a repayment plan the £100 a month + your paying in charges would decrease the debt. Surely that has to be your better option rather than not clearing the fee cost each month and the debt increasing ?

Or if your credit is good standing cant you get a 0% cash transfer card and then pay that back at 0% for say 2-3 years offer ?

I can not see how banks are getting away with this when they lost with the big unfair charges case years ago. But these charges I believe should be upto x amount per month or 1st 10 days are not charged of each month to give you chance to at least.

TheBanker · 2 February 2018 at 7:01AM

brookero1981 wrote: »

I have written to the bank asking for a refund of the last couple of months and two months to pay off my overdraft at the same rate of interest as before the change (a realistic target for me) but was fobbed off with a : "Having reviewed your complaint, and based on the information available to me, I'm unable to agree that any bank error occurred". I'm not calling it a bank error, just a very unfair way to treat it's customers. Having roughly £4.50 come out of my bank account every single day is so very demoralising.

Hi,

I do sympathise, but it won't be considered unfair. The old regulations required 30 days notice. The new regulations require "reasonable notice". 60 days is the industry standard.

I can see why you think it's unfair though and wish you well in paying the balance off.

PeacefulWaters · 2 February 2018 at 7:03AM

TheBanker wrote: »

Hi,

I do sympathise, but it won't be considered unfair. The old regulations required 30 days notice. The new regulations require "reasonable notice". 60 days is the industry standard.

I can see why you think it's unfair though and wish you well in paying the balance off.

Two months is the notice specified in law. Sometimes 62 days notice is required!

Dobbibill · 2 February 2018 at 8:57AM

Welcome to the forum brookero,

The SOA is an excellent starting point to review your finances.
Maybe you can consider moving your bills to the end of the month so the funds are in the account longer, meaning less use of the overdraft.

Feel free to post the SOA here or the DFW board.

brookero1981 · 2 February 2018 at 12:22PM

Thanks, useful tip, i should be able to divert funds and get it below £2000 in the next 10 days.

Westie983 wrote: »

Based on what you are saying your overdraft as around £3,000. I agree that the charge is making this figure increase. The only suggestion I can think off is to pay off what you can to reduce the overdraft to under the £2000.00 mark then you will lose around £2 a day on the fees, which will help you a little.

Sadly is people who have lived in their overdrafts which has caused the banks to recall the money in overdrafts by changing the structure.

I wish you luck in reducing it, and you may find you are able to switch accounts if your OD isnt as high.

As other have said post a SOA so we can try and help to see where we can save money and help, or sell some household items to recoup and reduce some of the overdraft amount.

Westie983

brookero1981 · 2 February 2018 at 12:38PM

Sorry, the debt relief plan is my own, I have about £11k on no fee/no interest cards (Virgin. Sainsburys and Bank of Scotland) and another £3k on a Tesco no interest card that i'm trying to pay off. My credit rating was awful about 7 years ago but is actually really good now, 999/999 according to Experian - (this is one of my greatest achievements in life!) and is obviously a big advantage in trying to sort all this out!

I asked them to reduce the fee to what it was before (not even a freeze) so I can pay it off and they said no. Perhaps my good credit rating counts against me as they think I should be able to sort it without their help?
What i'm thinking is, open an HSBC account and see what interest free overdraft they will give me with my good credit rating, whilst also paying off as much of the Lloyds one as I can. Anything leftover then Ill do what you say re the credit card transfer.

I'll forward my complaint to the ombudsman, only so that they have another record of a complaint against this increase and maybe in the future they'll implement something like what you suggested at the end of your post.

Hoogle wrote: »

if your on a debt relief plan I am assuming you don't have the greatest credit history surely it would make sense to switch bank accounts with no overdraft and write to the bank and ask them to freeze it and enter a repayment plan the £100 a month + your paying in charges would decrease the debt. Surely that has to be your better option rather than not clearing the fee cost each month and the debt increasing ?

Or if your credit is good standing cant you get a 0% cash transfer card and then pay that back at 0% for say 2-3 years offer ?

I can not see how banks are getting away with this when they lost with the big unfair charges case years ago. But these charges I believe should be upto x amount per month or 1st 10 days are not charged of each month to give you chance to at least.

brookero1981 · 2 February 2018 at 1:10PM

Ahh, good idea re the bills! Will work on my SOA too

Dobbibill wrote: »

Welcome to the forum brookero,

The SOA is an excellent starting point to review your finances.
Maybe you can consider moving your bills to the end of the month so the funds are in the account longer, meaning less use of the overdraft.

Feel free to post the SOA here or the DFW board

Recent bank overdraft fees increase

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