Is This A New Money Making Scheme For Hsbc??!!

[CASSI1977]

Hi Everyone

Hope someone can help. I rang HSBC up today to temporarily increase my overdraft as I had to wait 5 working days for some money to be transferred over. I was told that I would have to pay a £35.00 arrangement for this............! She then told me it was to discourage people from just increasing their overdraft every month. How ridiculous is that some people may increase their overdraft to stop that dreaded charge appearing on to their statements but you get charged by the bank anyway for increasing it catch 22 I think.

Do you think I could claim this back and what would I need to put in a letter.

Many Thanks
Cass

That is a very difficult question to answer but I'll do my best based on what I think is correct and hopefully a site helper or Mod will pop along to confirm it.

Firstly, I've just had a look at the latest t&cs on their website, and it doesn't seem to mention a fee of £35, but states that a formal request for an overdraft/extension is £25. So check that out with them. There are also other conditions such as if you have not exceeded your overdraft before 1 November 2006, no arrangement fee will be charged.

Secondly is whether this constitutes a penalty. If it is a genuine service charge then they will be enttiled to charge it as long as it is reasonable. I don't think it sounds reasonable. If it takes that employee 15 minutes to consider your request, that would be a fee of £35 for 15 minutes work, are their employee costs really £140 an hour? So it could be challenged I believe and they would have to provide their calculations for arriving at the charge.

The other thing to look at (although perhaps not relevant to your query today) is the informal overdraft request, where you just exceed your overdraft by paying items without prior arrangement. there the t&cs say they will charge an arrangement fee (maximum of one a day) (it is not clear but it looks like it will still cost us £25 unless the cheque or debit was less than that in which case it will equal the amount of the debit), and if they decline the arrangement they will not charge the arrangement fee but will apply a "return fee" of £10 for debits of up to £25, and of £25 per item for items over £25.

These return fees could definitely be reclaimed, even though they've attempted to disguise them as service fees in their t&cs they fit the description of a penalty, since no-one is actually sitting at HSBC humming and haaing over every 'unauthorised' cheque and dd that comes through - it is still an automated service and doesn't merit being charged for every debit.

I'm not sure if I've answered your question after all that, it looks as if they are desperate to get these charges past us in some shape or form. I feel certain that they haven't done a costing exercise since all these claims started going in and they are just trying another tactic. Claim it back I say.

[siena]

Sounds like they are making it up as they go along!

[CASSI1977]

Thanks so much it does seem like they are making it up as they go along. In about 5 days the overdraft will be reduced it was just a temporary fix as I am waiting for some money from my savings account to go in which takes about 3 - 5 working days. After this money has gone in I am going to request it back as Bong says ""There are also other conditions such as if you have not exceeded your overdraft before 1 November 2006, no arrangement fee will be charged"". The overdraft will not be exceeded.

Thanks for your help.

Cassandra

[st24driver]

Had something like you cassie a few years ago when we asked for a temparory increase on our overdraft for 1 month and was charged £40 for the pleasure which I am claiming back as they described it on the statement as a charge which to me equals a penalty.
But the amazing thing is since I had a substanial pay rise and Mrs st24 got a promotion thus increasing disposable income they double our overdraft facility lumped up Mrs st24,s credit card limit all of which we did not use, and on the one ocassion that we poped into the bank together whilst in town just to get some cash from the atm we were recognised by one of the managers who knows us from way back, who then said have not seen you for a long time blah blah blah why dont we do a quick review we are doing some offers at the moment, of which we were told we could have virtually what we wanted and said that we were ok but in the future we may consider moving house as we had been here 25 years, kids moving on etc etc and was told that they would love to lend up 154k, which I replied thanks but no thanks with 15 years to go to retirement we had our years of working to pay someone else.

In a nutshell had we said yes this would have put great pressure upon us and no doubt would have sent us into the magic charging zone that they seem to like to get you into so they can increase their profits

[siena]

It does seem as if they are going to screw us out of our money on way or another. Keep us posted on your progress.