unplanned overdraft fee LLoyds TSB

[Guest Alison82]

Hi

 

I have just notice that I have been charged an "unplanned overdraft fee" from Lloyds TBS, this is there new charging system.

 

Can these be claimed back the same way?

[kfdh1962]

Hi Alison,

yes there is a new charges regime, i think they brought it in in decemeber, and its even more punitive than before..

they now call it an unplanned overdraft charges, and they will charge you on a sliding scale depending on the size of your unplanned o/d...anything from £5 per day to £25 per day for up to ten days in any month...so potentially they could charge £250 per month...

 

 

and yes.claim back as previosuly

[Guest wino]

They've just done that to me. I had an overdraft with them and they have reduced it to a couple of hundred pounds without informing me by letter. They say one was sent but I did not receive it. Resulting in me being charged £250 + interest this month. They have put my overdraft back to the agreed figure but refuse to remove the charges.

[kfdh1962]

they did it to me too... started with £392 overdrawn .. all charges.... set up an arrangement ..made payments as agreed then they started to reduce the overdraft limit below my balance each time i paid!!! hence a further £400 plus in charges over the last few months.. i have been paying £120 per month since august without fail and i'm still £396 overdrawn, with no other actvity on the account!!!

[Guest Alison82]

Ok, thank you

[mailmannz]

If these are new charges, how come the FSA extended the waiver?

 

I thought new charges was meant to be a no no???

 

Mailman

[kfdh1962]

the FSA have already publicly criticsed lloyds for this .. but as usual took no action

[pedross]

I predict that this is going to be a big issue in the future. It appears that other banks including RBS group have also adopted this policy as well.

 

The way that it seems to work is that if you go overdrawn it is classed as a request for an overdraft and an appropriate fee is charged, which you will have been notified of in advance. They obviously believe (probably with councils opinion) that £30 is a fair fee to charge to arrange an overdraft.

 

In fact, it's not as if for instance, you went overdrawn by £100, you were charged £30 and then you had a £100 overdraft facility for say 1 year. The problem is that you only have the facility for a day.

 

Lets look at a biased example:

 

You are down on your luck and have a modest income of £300 a month. You go overdrawn by £29 and you think, never mind my wages will go in in 10 days time and it will be back in credit. You then stay overdrawn for 10 days and you will be charged £300. Your wages go in and are swallowed up by the charges, your direct debits bounce and you are still £29 overdrawn and it starts to get worse.

 

The banks appear to be expecting to lose the bank charges case full stop and this is the next way to get them back. They must have some real legal arguments to defend this system and I think everyone with an interest in the subject on CAG needs to start discussing it now.

 

Hopefully, someone on here with legal knowledge is already up to date on this and will shoot me down in flames.

 

 

*not intended as a pun but we might all end up selling it if the banks have their way.

Edited June 15, 2009 by pedross

[fatbadger88]

Balls, I just noticed I went £0.74 overdrawn with my lloyds current account, does this mean that I'm going to have to pay the £5 a day as it has been 4 days already and charging £20 for a miss calculation on my behalf is a little steep. Also if they do am I likely to have any leway in getting it back?

[pedross]

It is difficult to know with it being just .74p but possibly.

 

I would go into the bank straight away and pay some money in to bring you back into credit. At the same time talk to a customer service adviser and point out that you went slightly over and make sure that you will not be charged. Make sure you ask for their name.

 

You really need to pay additional money in to cover say £25 - £30 worth of charges just in case.

 

Make sure you deal with it immediately because it will not go away on its own. Hopefully you will not be charged but it's not worth taking the chance.

 

It would be useful if you provide feedback because if I am right this is the next challenge for caggers.

 

Good Luck.

Edited June 15, 2009 by pedross

[fatbadger88]

So far they have charged me £33 something which has worked out at £8-£9 a day. The chap on the phone said that until I have the money in again he can't do an awful lot but as I've never had any problems before it should be able to get wavered. They made no attempts to contact me about it despite all the other stuff then send me which is partly why it was missed for a few days and has made me a little annoyed. I'll keep in touch though as I'm sure you will be interested

[fatbadger88]

Turned out it was £32 so £8 a day, They were all very nice and I had it wavered without even having to get a little mad! If I do it again then I'll be in trouble. So moral of the story is be good and don't do it again but £8 is a lot to charge when you have gone over by just a few pence.

[underdog13]

I predict that this is going to be a big issue* in the future. It appears that other banks including RBS group have also adopted this policy as well.quote]

 

RBS are charging me a 'management fee' on my overdraft, in addition to interest, etc. Could this be termed as a penalty fee?

[pedross]

These are two interesting points.

 

Fatbadger88 Has had a lucky escape, well done to you. I think you will find that after the account reaches the next overdrawn band, say £100, which would have been about 14 days charges then the £8 goes up to about £15. All for .74p so as you mention you need to be careful in future.

 

underdog13 With regards to the point you make about the management charge, I expect they sent you a change of terms & conditions to include the management charge in future.

 

I would not expect either of the above to be be classed as penalty charges because you now have the option to apply or use an overdraft or not. If you choose to do so then they have already quoted you the price for the service you are requesting.

 

I believe that they have actually thought this through this time. If only they were fair and ethical we could leave them alone.

Edited June 15, 2009 by pedross

[underdog13]

Thanks Pedross - what if they forced you into overdraft by taking out loan payments even after you had cancelled the direct debit?

[pedross]

It depends who you cancelled the direct debit with. If it was your bank and they agree that it is their fault they may remove the charge, it depends on the circumstances.

 

If you cancelled with the lender then it would not be the banks fault so it's doubtful that you will get much joy.

 

All you can do is ask.

[underdog13]

Hi pedross,

 

I cancelled the DD with the bank, who were also the lender.

[pedross]

In which case they did not follow your instructions which forced you into overdraft. If they accept that you cancelled it then, in my opinion, you should not have been charged.

 

The problem is that they appear to want to make the payments for DD's for their own loans regardless of limits.

 

I would speak to them and explain. It's worth a try.

[underdog13]

Thanks pedross, will do:)

[ajax95]

At the risk of echoing what's already been said, Lloyds tend to have a varying scale depending on how vindinctive they're feeling...

 

I predict that this is going to be a big issue* in the future. It appears that other banks including RBS group have also adopted this policy as well.

 

Have to agree with pedross, it's another time bomb waiting to explode with no-one with the relevant muscle willing to do anything

[rickyd]

re RBS management fees - they are standard across all personal accounts and any amount of excess will trigger the charge. They run from one "charging period" to the next and are fixed so no matter how much you go over your limit, or how many times this happens in the same charging period, there will only ever be one management fee and always at the same rate.

 

Cancelling Direct Debits are slightly more complicated due to the recently introduced "faster payments" system which everyone had been shouting out for but which means that the cancellation period moves further away from the actual payment date. In short, you now need to cancel several days before a payment falls due to ensure it doesn't get paid. If you did do this and they still paid it, you have a strong claim for a bank error with a full refund and possibly compensation

[underdog13]

Thanks, Rickyd. I canceled the DD weeks before the payment was due, but the bank just kept reinstating it each month.

[rickyd]

another thought has occurred to me. If the d/d was to repay the loan with the same bank there may be a "no cancellation" feature which is why they keep reinstating it.

 

If you look at it from their point of view they could hardly stand back and let you cancel the payments that you agreed to make when you took out the loan. Harsh though it sounds, they are probably correct when they do this unless you have arranged with the lender to repay the loan in another way.

[everard19]

this unplanned overdraft scheme of lloyds bank make them worse than payday lender

[Guest Alison82]

Hi CAG

 

I was wondering if the following letter is still applicable for challenging charges today? I have been charged by Lloyd's only for a small amount however my account never should have been allowed to go overdrawn, this was for a classic account that is not my main account, I went overdrawn by £13 which I didnt even realize and now I have been charged £46 even though there was money in my other Lloyd's account that is linked. I haven't paid this yet but I wanted to know if there is an up to date letter to nip it in the bud. I have reclaimed many charges in the past however that was about 5-6 years ago.

 

Here is the letter I found, thanks

 

 

Dear Mr Brown,

 

CARD/ACCOUNT NUMBER: XXXXXXX

 

I now understand that the regime of fees which you have been applying to my account in relation to late fees and over limit charges, are unlawful at Common Law, Statute and recent Consumer regulations.

 

I would draw your attention to the terms of the contract which you agreed to at the time that I opened my account. It is an implied term of that contract that you would conduct yourselves lawfully and in a manner which complies with UK law.

 

I am frankly shocked that you have operated my account in this way as I had always reposed confidence in your integrity and expertise as my fiduciary.

 

I calculate that you have taken £XXXX plus £XXX which you have charged me in interest for the sums which you have taken. Total £XXXX

I enclose an amended schedule of the charges which I am claiming with this letter. You will note that I have withdrawn my claim for the £50 charged for the House Visit on 9th September 2005 as a goodwill gestureicon as you were able to provide me with a rough outline of costs in relation to this in your letter dated 17th October 2006.

 

I require repayment in full of this money. If you do not comply fully within 14 days, I shall begin a claim against you for the full amount plus interest, plus my costs, without further notice.

 

Yours faithfully,

 

 

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