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  • FIRST POST
    • DJMC
    • By DJMC 14th Jan 20, 6:19 PM
    • 63Posts
    • 81Thanks
    DJMC
    Has MSE caused my overdraft rate to increase by 24%?
    • #1
    • 14th Jan 20, 6:19 PM
    Has MSE caused my overdraft rate to increase by 24%? 14th Jan 20 at 6:19 PM
    I found out in December that my authorised overdraft rate had increased in November to 40% from 16%.

    We have two authorised overdrafts, £5k and £3k, and being self employed with varying income each month I didn't mind using the facility regularly to help with budgeting.

    The other day I saw Martin Lewis on the TV clucking like a hen in front of a crowd asking them to applaud him for the success in bringing the banks to task over overdraft fees. I'm assuming his success and their gain is my loss?

    I've now transferred my savings into my current accounts as a buffer against going overdrawn. Martin would say that makes much more sense - not paying 16% (or now 40%) and losing 1 or 2% in savings interest.

    But to me it represents wiping out my savings and makes me nervous. That nervousness isn't worth the saving I'm making in not going overdrawn. Illogical? Perhaps. But I wish things had been left as they were.
Page 3
    • DJMC
    • By DJMC 15th Jan 20, 6:46 PM
    • 63 Posts
    • 81 Thanks
    DJMC
    7.9.4 states, "A firm must not contact customers at unreasonable times and must pay due regard to the reasonable requests of customers (for example, customers who work in a shift pattern) in respect of when, where and how they may be contacted."

    07:04 is not an unreasonable time, its when most delivery companies have their first delivery and the average UK person is awake at 07:00. Had you previously made a request not to be contacted in the morning?
    Originally posted by abz88
    My alarm is set to 8am. I usually get up at 8.30. I wouldn't expect any FCA governed organisation to contact me outside 9am - 9pm. And to back me up further...

    FCA MCOB 3A.4.2 refers to unsocial hours being "on a Sunday or before 9am or after 9pm on any other day."
    Source: https://www.handbook.fca.org.uk/handbook/MCOB/3A/4.pdf

    I'm sure if I call FCA tomorrow (after 9am) they'll agree this is the general rule. Is a text a "call" - well that may be in question but 3A.4.1(4) says a communication may not be made at an unsocial hour and a text is a communication.

    I have made no request not to be called before 9am as I know it's against the rules. Neither have I opted in to text alerts (to my knowledge) and these have only started today, the day I am briefly overdrawn under the new 39.9% regime.
    • eskbanker
    • By eskbanker 15th Jan 20, 6:47 PM
    • 12,167 Posts
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    eskbanker
    That last quote is really helpful, but I can't find it on the page you linked to. Could you please advise under which heading it appears?
    Originally posted by DJMC
    It's towards the bottom of the page, clicking the 'show all' button at the top expands all sections for ease of reading.

    They've done precisely what your quote says they wouldn't do - wake me.
    Originally posted by DJMC
    They don't say they won't wake you, they say they'll delay sending "to avoid waking you too early", although no doubt your definition of too early and theirs will differ....
    • DJMC
    • By DJMC 15th Jan 20, 6:50 PM
    • 63 Posts
    • 81 Thanks
    DJMC
    It's towards the bottom of the page, clicking the 'show all' button at the top expands all sections for ease of reading.

    They don't say they won't wake you, they say they'll delay sending "to avoid waking you too early", although no doubt your definition of too early and theirs will differ....
    Originally posted by eskbanker
    Got it. Thanks.
    • yksi
    • By yksi 16th Jan 20, 9:13 AM
    • 204 Posts
    • 340 Thanks
    yksi
    This can impact a credit history. If I had an overdraft and was able to avoid using it, I would definitely not remove it from my account. It shows I'm able to manage available credit responsibly.
    Originally posted by yksi
    This is not correct.
    Well managed credit is a good thing. Overdrafts (used or not) are not a good thing. Lenders prefer to not see them. At all.
    Originally posted by Malkytheheed
    Could you let the mortgage lenders know please? Getting an overdraft was their specific recommendation to me when advising how I could make myself look more attractive to mortgage lenders. But you seem to know more about what lenders want than the lenders themselves.
    £3 a Day January £61/93
    £2020 in 2020 £61/2020
    • Malkytheheed
    • By Malkytheheed 16th Jan 20, 9:54 AM
    • 48 Posts
    • 44 Thanks
    Malkytheheed
    Could you let the mortgage lenders know please? Getting an overdraft was their specific recommendation to me when advising how I could make myself look more attractive to mortgage lenders. But you seem to know more about what lenders want than the lenders themselves.
    Originally posted by yksi
    Well that specific recommendation was wrong.
    And no... I'm not going to take time out my day to let "the mortgage lenders" know. Did you have specific ones in mind? Maybe I could find a few hours today to waste.
    • abz88
    • By abz88 16th Jan 20, 10:03 AM
    • 202 Posts
    • 110 Thanks
    abz88
    Indeed, and CONC chapter 7 is specifically about "Arrears, default and recovery (including repossessions)" so the reference to customer contact within that chapter should be interpreted in that specific context.

    CONC 7.9.1 makes it fairly clear that the contact referred to is primarily phoning (to pursue arrears, etc) rather than routine automated texts:
    Originally posted by eskbanker
    Thanks for clarifying!

    My alarm is set to 8am. I usually get up at 8.30. I wouldn't expect any FCA governed organisation to contact me outside 9am - 9pm. And to back me up further...

    FCA MCOB 3A.4.2 refers to unsocial hours being "on a Sunday or before 9am or after 9pm on any other day."
    Source: https://www.handbook.fca.org.uk/handbook/MCOB/3A/4.pdf

    I'm sure if I call FCA tomorrow (after 9am) they'll agree this is the general rule. Is a text a "call" - well that may be in question but 3A.4.1(4) says a communication may not be made at an unsocial hour and a text is a communication.

    I have made no request not to be called before 9am as I know it's against the rules. Neither have I opted in to text alerts (to my knowledge) and these have only started today, the day I am briefly overdrawn under the new 39.9% regime.
    Originally posted by DJMC
    MCOB relates to Mortgages and Home Finance, so nothing to do with your overdraft and it says before 9am on a Sunday or after 9pm on any other day. So the text you received on a Wednesday falls within those timings (even if the did apply).

    I am fairly confident neither Nationwide or the FCA set their unreasonable hours by the fact DJMC on the MSE Forum boards likes to have a long lie so sleeps in most days.
    • JuicyJesus
    • By JuicyJesus 16th Jan 20, 10:15 AM
    • 3,719 Posts
    • 4,258 Thanks
    JuicyJesus
    MSE campaigns (and ensuing reactive regulation) tend to have the effect of limiting consumer choice and making things "simple" at the cost of them costing more and being more restrictive. A desire for "simplicity" led to the same 50p overdraft charges that are now banned because they cost more, but that ban has now led to unsecured borrowing costs rising for everyone regardless of status. MSE also tends to take the tack that literally nothing to do with banking should cost money, which begs the question of where the money to run all these lovely services should come from.

    Banks have to make money somehow and if you cut off all of their revenue streams they either have to make up for them somewhere or we, as a country, move to the model of banking being a not-for-profit public utility. Your choice.

    This is not correct.
    Well managed credit is a good thing. Overdrafts (used or not) are not a good thing. Lenders prefer to not see them. At all.
    Originally posted by Malkytheheed
    Complete b*llocks.

    Payday loans have that effect because they indicate extreme financial distress to the point you'll be willing to pay hundreds of percent in interest to get cash instantly and with short repayment terms. Having an overdraft concretely does not. You will find quite a few people who have overdrafts (used or not) and are able to get financial products without difficulty, including me.

    My alarm is set to 8am. I usually get up at 8.30. I wouldn't expect any FCA governed organisation to contact me outside 9am - 9pm. And to back me up further...
    Originally posted by DJMC
    The sun tends to wake me up at about 5 during the summer months and I used to have to get up at 6am to go and work for an FCA governed organisation. I know I can complain to the FCA about these horrible conditions but who do I complain to about the sun?
    Last edited by JuicyJesus; 16-01-2020 at 10:20 AM.
    urs sinserly,
    ~~joosy jeezus~~
    • boo_star
    • By boo_star 16th Jan 20, 10:26 AM
    • 3,016 Posts
    • 2,361 Thanks
    boo_star
    My alarm is set to 8am. I usually get up at 8.30. I wouldn't expect any FCA governed organisation to contact me outside 9am - 9pm. And to back me up further...

    FCA MCOB 3A.4.2 refers to unsocial hours being "on a Sunday or before 9am or after 9pm on any other day."
    Source: https://www.handbook.fca.org.uk/handbook/MCOB/3A/4.pdf

    I'm sure if I call FCA tomorrow (after 9am) they'll agree this is the general rule. Is a text a "call" - well that may be in question but 3A.4.1(4) says a communication may not be made at an unsocial hour and a text is a communication.

    I have made no request not to be called before 9am as I know it's against the rules. Neither have I opted in to text alerts (to my knowledge) and these have only started today, the day I am briefly overdrawn under the new 39.9% regime.
    Originally posted by DJMC
    Please do.

    I'm sure they'll tell you that overdrafts aren't mortgages or home finance.
    • Malkytheheed
    • By Malkytheheed 16th Jan 20, 10:39 AM
    • 48 Posts
    • 44 Thanks
    Malkytheheed

    Complete b*llocks.

    You will find quite a few people who have overdrafts (used or not) and are able to get financial products without difficulty, including me.
    Originally posted by JuicyJesus
    Correlation is not the same as Causation...

    Just because you had no difficulty getting a finnancial product does not mean that overdrafts do not impact your credit file. They can and do.
    Many lenders view them unfavorably. Obviously not to extremes. It's not the same or as damaging as defaulting on an account or a pay day loan. But many lenders view overdrafts (used or unused, but particuarily if used) as a sign of poor money managment and add this to the pile of other data when making lending decisions.

    These are FACTS.

    So please check before you call someone out as talking "Complete b*llocks". I work in the finnancial sector for several major lenders and I am aware of certain criteria they look at.
    Last edited by Malkytheheed; 16-01-2020 at 10:47 AM.
    • JuicyJesus
    • By JuicyJesus 16th Jan 20, 10:51 AM
    • 3,719 Posts
    • 4,258 Thanks
    JuicyJesus
    Many lenders view them unfavorably. Obviously not to extremes.
    Originally posted by Malkytheheed
    Well managed credit is a good thing. Overdrafts (used or not) are not a good thing. Lenders prefer to not see them. At all.
    I would say that if a product that multiple banks give out as a matter of course when opening current accounts, and one of the most common financial products around, is something that lenders "prefer not to see... at all", that would be rather extreme.

    Especially funny since any number of lenders will also offer overdrafts. Generally speaking, lenders do not tend to offer products to people that they also consider toxic.
    urs sinserly,
    ~~joosy jeezus~~
    • Ashen
    • By Ashen 16th Jan 20, 11:02 AM
    • 540 Posts
    • 421 Thanks
    Ashen
    Go on... say "well, you could have switched your phone off overnight or disabled texts" and I'll reply a) THEY could have read the rule book and b) my father is at death's door in a nursing home so I keep phone, and texts, enabled. There, saved you from feeling bad eh?
    Originally posted by DJMC
    I have a feeling you're the type of person that would complain if you got it at 9am, saying there was no reason for them not to notify you earlier because something could have happened with your 'father at death's door' at the same time.
    • Malkytheheed
    • By Malkytheheed 16th Jan 20, 11:16 AM
    • 48 Posts
    • 44 Thanks
    Malkytheheed
    I would say that if a product that multiple banks give out as a matter of course when opening current accounts, and one of the most common financial products around, is something that lenders "prefer not to see... at all", that would be rather extreme.

    Especially funny since any number of lenders will also offer overdrafts. Generally speaking, lenders do not tend to offer products to people that they also consider toxic.
    Originally posted by JuicyJesus
    Can you please stop suggesting your opinion as if it's truth. Here is one example of 100s of article that comfirm what I have said.

    "Could an overdraft affect future credit applications?
    There are a few main ways that an overdraft can affect your creditworthiness. Firstly, as a credit facility, most overdrafts are reported on your Credit Report as an account with a limit. This will be viewed as a potential debt by other lenders, even if you’re not using it.

    Unlike other forms of credit like a personal loan or credit card, overdrafts are generally repayable on demand. In the eyes of a potential lender, an overdraft facility potentially increases the risk of you becoming overindebted."

    Source - https://www.checkmyfile.com/articles/3002/banking/how-does-an-overdraft-affect-your-credit-report.htm
    • born again
    • By born again 16th Jan 20, 1:48 PM
    • 1,444 Posts
    • 796 Thanks
    born again
    My alarm is set to 8am. I usually get up at 8.30. I wouldn't expect any FCA governed organisation to contact me outside 9am - 9pm. And to back me up further...
    Originally posted by DJMC
    Well that me out of a job as when we are busy & we start working at 06:00. I always send contact text pre 09:00 as we can't call a customer before, unless they ask for a early call.

    In the thousands I and fellow works have sent NOT ONE has mentioned that it was inconvenient or rude to send at that time.
    Same on bank holidays... Some people even ask for call on Christmas day.....
    • JuicyJesus
    • By JuicyJesus 16th Jan 20, 3:53 PM
    • 3,719 Posts
    • 4,258 Thanks
    JuicyJesus
    Can you please stop suggesting your opinion as if it's truth. Here is one example of 100s of article that comfirm what I have said.
    Originally posted by Malkytheheed
    Overdrafts are reported on your Credit Report as an account with a limit. This will be viewed as a potential debt by other lenders, even if you’re not using it.
    by Your quote
    Lenders prefer to not see [overdrafts]. At all.
    by What you actually said
    Rather different isn't it?
    urs sinserly,
    ~~joosy jeezus~~
    • enthusiasticsaver
    • By enthusiasticsaver 16th Jan 20, 5:24 PM
    • 9,772 Posts
    • 22,952 Thanks
    enthusiasticsaver
    I found out in December that my authorised overdraft rate had increased in November to 40% from 16%.

    We have two authorised overdrafts, £5k and £3k, and being self employed with varying income each month I didn't mind using the facility regularly to help with budgeting.

    The other day I saw Martin Lewis on the TV clucking like a hen in front of a crowd asking them to applaud him for the success in bringing the banks to task over overdraft fees. I'm assuming his success and their gain is my loss?

    I've now transferred my savings into my current accounts as a buffer against going overdrawn. Martin would say that makes much more sense - not paying 16% (or now 40%) and losing 1 or 2% in savings interest.

    But to me it represents wiping out my savings and makes me nervous. That nervousness isn't worth the saving I'm making in not going overdrawn. Illogical? Perhaps. But I wish things had been left as they were.
    Originally posted by DJMC
    The changes are down to the FCA not Martin Lewis. Banks are required now to be more open about overdraft charges which in some cases were higher than payday loans.

    If you have up to £8k of overdrafts, authorised or not, then it makes no sense to have money sitting in savings earning a pittance. It may make you nervous to use those savings to repay overdrafts so then build yourself a bigger buffer.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • DJMC
    • By DJMC 16th Jan 20, 6:20 PM
    • 63 Posts
    • 81 Thanks
    DJMC
    Thanks for clarifying!



    MCOB relates to Mortgages and Home Finance, so nothing to do with your overdraft and it says before 9am on a Sunday or after 9pm on any other day. So the text you received on a Wednesday falls within those timings (even if the did apply).
    Originally posted by abz88
    You're wrong again, getting a little tiresome now.

    As I said, FCA MCOB 3A.4.2 refers to unsocial hours being "on a Sunday or before 9am or after 9pm on any other day."

    You say it says just "after 9pm on any other day" with no reference to the mornings, but you're wrong. Read it again. It says "before 9am or after 9pm on any other day."

    It also doesn't say "before 9am on a Sunday", just "on a Sunday"

    MCOB & CONC are both FCA controlled areas. Therefore if the FCA consider it unreasonable to contact a customer before 9am or after 9pm in one area it's likely they consider it unreasonable in all areas.
    • DJMC
    • By DJMC 16th Jan 20, 6:34 PM
    • 63 Posts
    • 81 Thanks
    DJMC
    Well that me out of a job as when we are busy & we start working at 06:00. I always send contact text pre 09:00 as we can't call a customer before, unless they ask for a early call.

    In the thousands I and fellow works have sent NOT ONE has mentioned that it was inconvenient or rude to send at that time.
    Same on bank holidays... Some people even ask for call on Christmas day.....
    Originally posted by born again
    Who is "we"? If you're in the FCA regulated world, and have been for a little time, you'll know you cannot contact customers before 9am or after 9pm on weekdays, or on a Sunday.

    If, say, you're a tradesman then carry on sending your texts early. That's what I've been used to in the last 12 months of home renovations, recently completed in December.
    My plasterer arrives at 7am too!
    BUT... during this busy time I KNEW I was likely to receive such early texts, calls, and arrivals and even if I didn't like it there was nothing I could do about it as there's no Government regulation of trades.

    The difference with the Nationwide's 7.04am text was a) I had no prior warning they were going to send these "alerts"; b) They are FCA governed and so I DO have a right of redress; c) I'm aware that they are likely to be breaking FCA communication rules.
    • DJMC
    • By DJMC 16th Jan 20, 6:58 PM
    • 63 Posts
    • 81 Thanks
    DJMC

    The sun tends to wake me up at about 5 during the summer months and I used to have to get up at 6am to go and work for an FCA governed organisation. I know I can complain to the FCA about these horrible conditions but who do I complain to about the sun?
    Originally posted by JuicyJesus
    Aw bless. Have you thought about better curtains?

    I'm fortunate that I work for myself and get up when I like.
    • eskbanker
    • By eskbanker 16th Jan 20, 7:02 PM
    • 12,167 Posts
    • 15,082 Thanks
    eskbanker
    Neither have I opted in to text alerts (to my knowledge) and these have only started today, the day I am briefly overdrawn under the new 39.9% regime.
    Originally posted by DJMC
    I had no prior warning they were going to send these "alerts"
    Originally posted by DJMC
    They notified these in the same August (and September) emails as the new overdraft charges, as quoted in post #9 above:
    We’re introducing new text alerts (by 18 December) to make it even easier for you to manage your money. You’ll automatically be opted in to these.
    Chances are they'd have been advised in the same Ts & Cs update in online banking that you accepted you clicked past too....

    The FAQ page you were looking at also explains the opt-in, and perhaps more importantly the opt-out, arrangements.
    • DJMC
    • By DJMC 16th Jan 20, 7:46 PM
    • 63 Posts
    • 81 Thanks
    DJMC
    They notified these in the same August (and September) emails as the new overdraft charges, as quoted in post #9 above:Chances are they'd have been advised in the same Ts & Cs update in online banking that you accepted you clicked past too....

    The FAQ page you were looking at also explains the opt-in, and perhaps more importantly the opt-out, arrangements.
    Originally posted by eskbanker
    They can opt me in automatically but they can't then communicate with me during unsociable hours. The latter trumps the former drug those times.

    Once they've paid me the £100 for this breach they'll no doubt advise me to opt out. If I stay opted in and they text again before 9am they'll still be breaking the rules - another £100 thank you. And so on...
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