Banks adding charges to an unauthorised overdraft

[seylectric]

Sorry if this has been covered but I haven't seen it.

 

If you go overdrawn without an overdraft agreement, e.g. an unauthorised overdraft", the bank tells you that it is a breach of the terms and conditions for the account to be overdrawn and you are asked to bring it back into credit. Fair enough.

 

However, if a bank then ADDS to that overdraft by adding charges for (for example) an unpaid direct debit, is the bank not then in breach of their own terms and conditions?

 

This becomes even more relevant when the overdraft occurs (as in my case) as a direct result of the charges added to the account; therefore the bank are surely breaching their own terms and conditions by sending it into overdraft themselves by adding the charges.

 

Surely the T&C's are binding between BOTH parties? Any thoughts on this, it's bugged me for a while.

[BankFodder]

I think that the principle of what you are saying is correct. I have always thought that there must exist in contracts some implied principle of mutuality or reciprocity.

 

However, it would need a lot of thought and discussion to understand the affects of this and to make sure that it couldn't backfire.

[carlpalmer]

Just to note, i rasied this with my bank (HSBC) to be informed that they understand that the £125 charge will push me over there set limited -£1500 BUT they will not charge me another £25 for the £125 going over my limit.

 

confused? sorry will try to explain in a different way if it makes no sence

[Bookworm]

Please do, I really don't understand.

[carlpalmer]

OK cool

 

Have an overdraft limited of £1500.

 

Broke it 5 times over a period of 7 months. So now the bank want £125 in charges (5x£25).

 

My current balnce is 1400 so when they take out there £125 on march 27th i will in fact go over the 1500. Thus i thought i would incur another £25 charge BUT this is not the case according to the bank. Because i will exceed my £1500 allowance BECAUSE OF THERE CHARGES i will not be charged another £25!

 

Phew...that better?

[Bookworm]

Yes, thank you.

 

So let me get this right: Your bank are saying that when you go over the limit, they're charging you, but when they take you over the limit, they won't?

 

Mhhh, interesting... So how does that work as far as their usual reasons for charging go? Let's see:

1-It's a genuine pre-estimate of their losses. Uh. Yet, if THEY charge you, they don't incur those costs? Doesn't add up.

2-Manual intervention. Uh. Yet, if THEY charge you, there is no need for that, and therefore no additional work? Doesn't add up.

 

Sooo... If it's their charges that take you over the limit, as it's their fault, they won't charge you again?... Hang on, that would make the previous charges PENALTY charges! *GASP* Uh-oh... Looks like your bank has just dug themselves a wee bit of a hole...

 

Ok, what you want to do ASAP is write a letter setting the points of your conversation, and ask them to confirm it. If they deny it, then make a request of the phone conversation under DPA.

 

Which bank, btw? Because that's the 1st time I've heard that one!

[carlpalmer]

HSBC

 

that is right. I go over the limit by any amount then £25 they go over the limited NIL!!

 

The guy even said it like they where being nice "our charge would not cause another charge"

 

Will send my letter after the next charge on the 27th to get my total charges and will include clarification of the charging policy of charging me when i go over then not charging me when they send me over!

[towiedyer]

I've had the same response from the Abbey when I complained about charges.

 

If it is them charging me that takes me over my overdraft then I don't get charged for going over. But if my mistakes take me over then I get charged.

[Spiceskull]

This could be very interesting...

[seylectric]

The interesting angle in my case is that they are charging me £38 a time for failed direct debits "due to insufficient funds". But it's the charges that took me overdrawn, not anything that I had paid out.

 

More to follow of course but I'm more interested in people's opinions on the original post (and the topics raised since) at this stage.

[carlpalmer]

put a topic in HSBC area as well but though i post here as i am sending my first letter to request the total charges and the transcript of the converstaions i have outlined in this topic

 

[seylectric]

This topic was closed on 03/07/19.

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