£5.00 underfunding charge now £5 a day

[Its WAR]

My account has always been in credit. But I stopped using it in December, withdrew my money but left £3.00 in credit. They charged me £5.00 for not paying any money in that month. I was therefore £2.00 overdrawn without an overdraft facility. So they charged me another £5.00 a day for being overdrawn, and they just keep on charging it at a max of £100 a month.

 

I asked them to refund or close the account. They refuse to do either.

 

So in a year I will be £1400 overdrawn.

 

Do I sue them and wait months or years before the courts allow these cases to move forward, or do I let them sue me? Whats my next move?

[hilaryfrances]

bump cant answer this but someone here will, bumping it up so someone else will read and give advice

[elizabeth1]

I would write to them asking for a refund of the charges etc.. and ask them to close account if that is what you want to do. If they say no go to the ombudsman and ask them to look at it

 

 

FAQs - making a complaint

[Its WAR]

A & L made the next move. They took £174.01 (all the money, but leaving £1.00 that I held in another account to pay off the overdraft. The overdraft is now £8.70). They left my ISA account untouched. Why did they not pay off the whole overdraft? Now I suppose it will continue again to rack up charges.

 

I am really angry. The thing is, I wrote to them to tell them to close the account. They didnt close it and just kept adding £5.00 a day, untill they decided to steal the money from my other account (they say the terms and conditions allow them to do that).

 

So, I will issue a summons. Not for the bank charges on the main account because that will get stayed. But for the return of the money taken from my other account after I told them to close the account, surely that should have stopped the charges racking up? They will argue that they cannot close an account that is overdrawn. (eventhough in this case the overdraft was only overdrawn by a couple of pounds that they had applied in charges in the first place and then increased solely because of additional charges.

 

Lets hope tomorrows High Court ruling will help further. (the ruling that the banks terms were previously judged to be subject to unfair terms - but which the banks have appealed- its the answer to their appeal).

Edited February 25, 2009 by Its WAR

[Its WAR]

A & L have not responded to this claim, yet. But they have refunded my £200 bank charges on my credit card claim today. They must be getting soft in the light of the failed appeal..........

 

So, only this one left to fight.

[sea-sidelady]

Congratulations on your credit card claim.

 

No bank will close an account while there are any debts on the account.

[Its WAR]

Yes, but when you write to tell them to close the account, you expect a reply saying pay off the overdraft first. You dont expect to hear nothing for a month and then find they have added another £100 in fees.

[the_freedom_trail]

IMO, the banks conduct amounts to nothing more than criminal behaviour. I feel for you here; however, am not sure what can be done till the conclusion of the OFT investigation. At this point I would certainly get a claim in with the local county court.

 

TFT

[Its WAR]

RESULT. Charges refunded. If they had done that when my first letter went in, I would have been impressed. Now though, I have closed two accounts. Whats in it for them?

 

If only one bank started to impress their customers, we would all flock to them as we abandon the rip off merchants.

 

Just imagine if say Lloyds happily repaid all bank charges for 2008 without question, and agreed to do the same for each previous year every three months. So in June they would repay 2007, Sept they would repay 2006 and so on, for 6 years.

 

I bet that before they repaid 2007 charges, they would receive at least that much in new accounts being opened as parachute accounts. The other banks would weaken of course.

 

The publicity they would get would be better than any advertising campaign and the refunds would cost less than an advertising campaign.

 

Now imagine if they had done it three years ago.

Edited March 6, 2009 by Its WAR

[sowa]

Ok. Haydn this is very helpful to start with. Similar thing happened to me. Let me explain.

 

In Oct I opened my new account with A&L. (Don't ask why). They sent me some forms to confirm I want to switch all of my Standing Orders and DDs to the account. I changed my mind and decided not to transfer the regular payments so I just left it. I decided I'd use them as my 2nd account just to deposit some money every month since my other account (Barclays) is overdrawn.

They switched the regular payments anyway... I didn't pay the money in time and here it started. Unauthorisd overdraft charges kicked in. I paid it off. But they kept charging me which made me go into the overdraft again so I just left it for a while cos I didn't have money or time for this. That was over a month ago and now I'm £210 in red... I don't want to pay this money cos it's not theirs to take.

 

Can you advise me as to what to do next? I'm quite new to all this stuff. 8-)

 

Thanks,

Sowa

[the_freedom_trail]

My understanding of this is that the bank have caused you damages of £210 as a result of breaching your contract with them by switiching the payments, despite the fact that you did not consent to this. My view is that this is a seperate issue to the legality of bank charges. I would write to them and clearly outline this; however, wait for the more expert opinions first.

 

All the best,

 

TFT

[kevrah]

Hi,

 

I have had a similar problem. I had a premier direct current account and actually withdrew my balance in the branch and asked them to close the account at the same time. This was back in July 2007. I then receive out of the blue in March 09 a letter saying I owed them £170 in unauthorised overdraft fees and must pay this back. The letter aslo stated that there may be further charges of £5 per day etc. So as far as I was aware, my account had been closed and I received this letter 18mths later. I complained and they responded to say they had no record of account closure request.

 

I asked for further info on:

• When I last paid into the account;
  
• When I last had a balance of £0 and
  
• When I started incurring fees.
  

This was confirmed as:

 

• The last payment made into the account was in July 2007 £352.89.
  
• On 2nd August 2007 £53.79 was withdrawn from the account in cash leaving a balance of £0.
  
• From September 2007 I was being charged £5 per month as an underfunding charge.
  

I don’t know how a bank which claims to “try to offer help and advice to ensure that you are able to manage your finances in the best possible way”, would leave it 18 months to contact a customer about unauthorised overdraft fees and explain this as “being an online account where the customer is responsible for managing their account” can operate fairly under FSA rules and guidelines. I was extremely angry and wanted to speak to a manager, which Ian told me was not possible and I let my mobile number and was told someone may contact me today or tomorrow but he could not confirm when.

I then spoke to credit control who told me the balance was £172.92 plus

further charges of £5 per day for being overdrawn for 9 days and then a

further charge for something else which would bring the total to just under

£280. I was completely flabbergasted.

The letter dated 21st March 2009, as well as the one dated 12th March 2009 states “depending on the account you hold, we may now charge you an Exceeding Overdraft Limit Fee of up to £5 for each day your account stays overdrawn without arranging an overdraft facility”. The key word being “may”again A&L trying to illegally charge its customers. I am now baffled as to how they can charge me as well as £5 per day for being overdrawn? Does the word “may” have any legal standing in applying charges?

I mentioned that I was not prepared to pay anything on the account they explained the account would be frozen and investigated and only charges up till today would be applied to the account. They mentioned that it would also be logged as a complaint. Not the best of responses as I would have preferred the account to be closed (for the second time) and to have no further dealings with A&L or Santander Group.

Sorry its a bit long winded. I have no proof of account closure but do have a

letter confirming closure of the regular saving account which had a special

interest rate.

Any advice on where I stand legally? I have written to the Ombudsman too.

Thanks

Kevrah

[sianpp]

I am experiencing similar problems with A&L.

 

I worked as a marketing manager with the company until November 2008 when it became apparent that my job was under threat due to the Santander takeover. As part of my contract, I was required to have an A&L current account for my salary to be paid into. I opened a Prem Direct a/c for this sole purpose - my salary was transferred out immediately each month into my everyday account.

 

When I left the company and moved to another bank in the region I didn't give the account another thought. The balance was at £0 so this seemed pretty risk free.

 

I got married the following December and took a 4 week honeymoon in February/March 2009. When I returned I was shocked to find a letter from A&L informing me that my account was in arrears and that I was being charged £5 a day!

 

I couldn't understand how this could have happened, as far as I was aware the account had never been used other than as a means of receiving my salary.

 

When I looked into it however I found I had been charged 2 x underfunding fees taking me overdrawn - obviously as I was no longer an employee no money was being paid in! It was a bitter pill to swallow but I paid the charges amounting to nearly £200 which I found to be grossly unfair considering I would have never have had the account if I hadn't worked there. But with the £5 charge added every day I was overdrawn I simply had no other option.

 

I never received any letter advising me I needed to fund my account, the underfunding fee was simply applied, with the £5 charge commencing immediately after.

 

However it is only in the last few days I realise to just what extent this mess is having an adverse effect on my life. Having been forced by the Santander takeover to move jobs, I now work for a credit card company in Northants with a lengthy commute each morning. As such I decided to move closer work and both accepted an offer on my existing house and had offered accepted on a new one close to Northants.

 

When I went through what should have been the relatively simple process of porting my existing mortgage I was shocked to find our application to be declined due to a poor credit rating. I keep tabs on my score and knew less than a month previously I was deemed to be rated good - excellent.

 

When I rang Experian they advised that it was more than likely the A&L account dragging my score down and that I should ask them under the circumstances to remove the status of the accounts via a rapid update.

 

So I called A&L and was informed that I would have to put my request in writing. I rang the following day to ask for the address again (I couldn't find where I had originally written it down) and was informed that it probably wasn't worth writing as they would not carry out my request as they had a duty to inform other companies that I was a high risk! I was simply astounded - I had only opened the account to receive my salary into!

 

When I explained I was away on my honeymoon and as such not received the letter or logged into my account, the advisor had the audacity to say that had it been him he would have checked regularly, even if away on honeymoon.

 

I can't believe I am likely to lose my new home because of a £5 charge levied by A&L under such circumstances.

 

Can anyone offer any advice?

 

Thanks

[postggj]

first thing to try and sort this out

 

when you opend the account, was it in the t&c that you have to pay in xyz per month or a fee would be levid

[elizabeth1]

I'd report this to the FOS and reclaim the charges etc.. explain about the terms you opened the account (relating to the work contract and so on) surely there is something "unfair" within such a contract?

 

Another thing that crosses my mind is - how does the work union interpret this company bullying employees into holding bank accounts with them? Did you have a work union and would it be any use talking to them about this?

 

It's kind of like Tesco employees being told "you can't shop at asda"?

 

I can understand a company offering privilages/discounts to employee as part of their package - but those are usually "optional" to an employee as to whether they use them or not - the choice is down to the individual?

 

I don't see how the company can stipulate an employee has to use their account with the company - surely that's out of order?

 

Maybe there are people in the Banking threads who can help you with this one - there may be some A&L/Santander employees in there who will have the terms of their contracts available to help you.

[sianpp]

Thanks for your responses.

 

I imagine the t&cs might have contained something on a minimum funding amount but I have no recollection. I'm surprised they didn't send me a letter reminding me that I should be putting in the minimum amount otherwise a charge would be levied.

 

I think banks stipulating that you should have one of their accounts to be paid into is standard practice unfortunately, I have now moved to another banking group where it is the same.

 

Thanks again

[Mrs_Ryan]

I used to work for Abbey (Santander) and we were told we didnt have to have an Abbey account if we didnt want one, for the first 7 months I worked there I had my salary paid into a Barclays account with no problems - I did open an Abbey account but only because we got paid a day earlier if we did!!

It stinks that one part of the Santander group is flexible where another one isnt - but thats A&L for you....