Premier Direct - Underfunding Charge

[virtualsamurai]

Hello, I have just found this site and am looking for some advice.
I have a Premier Direct Account with A&L along with a savings account. I opened them 2 years ago. Shortly afterwards I moved to Japan to live and work.
I was concerned about the implications of this for the Bank Account (not being UK resident) and visited the Nottingham branch of A&L on a trip home last Nov. I explain to an Account Manager my situation an discuss if this was OK. In summary I wasn't going to be using the account much as my salary and expenses would be in Japan - however it would be OK for me to keep the account. He also confirmed that I didn't need to pay the minimum monthly funding - GBP500 - as the only thing that would happen is that I wouldn't receive the preferential interest on my in-credit balance. This didn't concern me as there wouldn't be much money in there I just wanted a Bank Account when I returned to the UK.
I wanted to change my address to my Japanese address but he advised me not to because it was against the terms of the Bank Account - so I used my parents address.
Since I was classed as non-uk resident for tax I also filed forms for each of my accounts to get my interest credited gross (tax free).

For a while this worked great I could use the bank account when I was back in the UK and leave it idle when I was in Japan. The interest being paid gross was never actioned though - so I withdrew my savings to a different Banks savings account where I receive tax gross.
My problems started in October when I was planning to return to the UK for a visit - I wanted to transfer some money into my account for use when I was in the UK. Logging on to my Bank Account on-line I found my account was 65GBP overdrawn. This seemed to consist of a 5GBP 'underfunding charge' which took my account overdrawn - incurring 25GBP overdraft charges which were repeating monthly.

Now I don't always receive letters from the Bank as I am not at the account address - but from what I can find out - A&L have introduced this 'underfunding' charges for accounts that don't received at least a 250GBP credit each month. This seems to have been some time over the summer 2007. This 5GBP 'underfunding' took my bank account overdrawn incurring the additional charges.

Admitedly I have ignored this and the charges are not 120GBP. I don't need the account and would like to close it given this situation.
All of the overdraft is from there charges, none of it is from anything I have spent - they are effectively charging me for not using the account.

Has anyone any experience of this / can offer any advice. The first step is to call them but this is a pain and will cost more money given the time difference and call cost from Japan.
I don't use the account and have already withdrawn my saving but am just a bit worried about what they can do to reclaim this money. Plus it is my parents address on the account so would willing pay the money and close the account to save them hassle - but though I would ask here first.
I guess once I've paid it would be hard to get back!!



Any help appriciated
Thanks

[zootscoot]

Hi Virtual,

Its best to get his sorted rather than to leave it as it will harm your credit file and could cause your parents problems should the DCAs come knocking at their door.

They may be willing to come to a compromise agreement given the fact that it is a relatively small amount involved. So it might be best to start by writing to them.

If they are not willing to compromise, it may be worth paying up and then seeking to get the money refunded. At least that way the account can be closed with a zero balance so that they can not apply more charges.

Alternatively you could refuse to pay and wait for them to sue you for payment. Then defend on the basis of unlawful penalty.

Either way it is going to be difficult keeping contact if you are living abroad and using your parents address.

All the best and do keep us updated on how you get on.

Zoot

[virtualsamurai]

Thanks - zootscoot for the reply, you are never quite sure whether you are getting screwed more than necessary in these cases so its good to hear someone elses view.

I phoned them at the weekend to try and close the account - guess what I can't just pay the amount overdrawn (due to their charges), there are more charges pending that will go on the account at the end of the month, plus charges for this month that will likely go on next month. Therefore it will take at least 2 months to close the account - so longas there are know further charges. crazy. I just want to pay the amount due (whatever they deem that to be including all their charges) and close the account - a cynic would it seems they would rather keep the account open with the possibility of more charges for them.

Anyway, this was causing my parents more worry than me so figured, like you say, to a least stop further charges. I have transfered enough money into the account to cover further charges I hope. These currently stand at the 164GBP showing on my balance (5x5GBP under-funding charge, 6x25GBP overdraft - 2months, plus there will be a further 155GBP added - 30days x 5 GBP for overdraft + 5GBP under-funding, there then may be further overdraft charges for this month).
I have to fund the account with 500GBP per month as well until this is sorted or there will be further charges.

So this will cost int the region of 350GBP - in this time there have been no transactions in or out of my account so its easy to see what the charges are for. I fail to see how these are appropriate or reasonable - for not using the account.

On that note - I have been doing some research and am aftersome help. Does anyone have the T & C's for the Premier Direct account for Jan 2004. I know there was a requirement for funding of 500GBP required to open the account and I did this for over a year - but talking to a customer adviser at the branch in Nottingham (this was Nov07) he said the 500GBP funding just guaranteed additional benefits on the account (one being the higher interest rates for current account balances) - there was no penalty as such for not funding. I need to try and confirm this from the T&C's for Jan 2004 .... can anyone help.

I stopped funding the account and everything seemed OK - I think there were 6 months with no transactions on the account APR07-SEP07. I stopped checking my account during this time because I was just going to use the account when I returned to the UK - obviously regret this now!
The first charges went on the account in Oct07 the first being an 'under-funding charge' for July07. This immediately made the account over-drawn and 2x25GBP was charged - from there it has snowballed.

So does anyone know if the T&C's changed introducing this under-funding charge in July 07 ??? I have at least 2 months before this date with no monthly transactions and no under-funding charge???

It also seems that the unauthorised overdraft fees have changed - my last month overdrawn cost 150GBP (30 days x 5 GBP), whereas previously it was 2 x 25GBP for 1 month.

So all in all not a good experience.

I called the customer centre in the UK (I think Sat evening UK time) - and that was just a waste of time. I don't know if they diliberately try to wind you up or what - but they are no help whatsoever and certainly cannot be called customer support.
I couldn't get a straight answer to 'How do I pay this debt and close the account?'
I think they have just been given standard answers to give which has no relevance to what the real issue is. Anyway after that experience I credited my account with more than enough money and will keep an eye on what has happened.
In the meantime I have sent a grovelling message through the on-line account pleading that I made a mistake and that I really like banking with A&L etc, will see what happens. I also plan to send a letter to my branch, etc and eventually to customer complaints.

We will see what happens ... I won't be around for a while (even less than usual) as I am off to New Zealand tomorrow - where hopefully I can forget about this whole mess. I am absolutely fuming - it has cost 300GBP - and I haven't made one transaction on the account.
The key is this 'under-funding' charge which is why I would like to know if this has been introduced or has always been in the T&C's ??

As always ... thanks for your help