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RT1970

overdraft cancelled, mortgage bounced, no warning

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Yesterday morning a letter arrived from Barclays telling me that my overdraft had been cancelled because 'the agreed term of borrowing had expired'.

 

I did recveive a letter back in May about this, so yesterday's letter wasn't totally without warning, but I do feel a bit harshly treated. The previous letter asked me to get in touch with the bank to review my account, which has always had an overdraft limit of £5000. I like to have this facility because I am self employed and my income is irregular, although healthy, so the £5000 limit covers me for up to three months of standard monthly expenses if any customers are late with their payments, or if a project overruns. I have always used this facility properly and have never gone overlimit.

 

So after the previous letter, I had an interview at the bank and requested the same o/d limit, for the reasons cited above. It all seemed fine. My circumstances had not changed at all, so there was no reason for Barclays to change anything, my reasons for needing the £5000 limit were accepted, and nothing untoward came up on the computer at the time. That was five weeks ago.

 

Checking my balance on-line this morning, the overdraft facility has indeed been cancelled leaving me with a positive balance of a few hundred pounds and - worryingly - my mortgage payment has been bounced, becausde it comes out the account by direct debit on the same day they abolished the overdraft.

 

I'm pretty sure that the bank are within their rights to remove borrowing facilities as they see fit but there is certainly something wrong in the spirit of what they've done here:

 

1) My application for a new o/d facility went in five weeks ago, plenty of time for them to inform me if I had been refused. As far as I know, there has been no decision yet - does it usually take that long (especially for a well run account) to decide yes/no on an overdraft facility?

2) Yesterday's letter was just a curt note to inform me about their action, and was generic. It mentioned that if there was any outstanding balance the account would be haded to their collections department. There was no warning about this. It would be nice to be informed a week in advance or something if you are going to lose access to £5000 of arranged borrowing. I was lucky a couple of customers had paid me recently and I was in the black, or I would be on the receiving end of arrears letters too.

3) I overpay my mortgage but - astonishingly - since it was my decision to do this, it is regarded as a contract so if I don't pay the full amount I normally pay, I will be in arrears even though I have been overpaying for years and am, in reality, well ahead of the game. I have until the end of the month to make up the shortfall. Not a problem, but again it would be nice to have received some advance warning.

 

Like I said, I'm sure they've done nothing technically wrong but it sure feels like I've been shafted this morning. I have enough money in the account to cover everything except the mortgage, I can transfer money from savings to cover the mortgage and I can live without an overdraft if necessary (I can import savings and create a 'float' rather than relying on an overdraft facility). But despite this, it does seem a bit of a rum do the way they've gone about it. I'm on holiday next month (paid in advance so no worries there), but what if all this had happened while I was away and I wasn't here to deal with it immediately?

 

Oh, and they tell me I will be charged for the mortgage payment being refused too :mad:

 

Do I have any rights here or are they protected by their T&Cs?

 

Cheers all

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Hi RT,

 

I think you're right. Technically they've done nothing wrong and they have the right to review an o/d facility, withdraw it and demand immediate repayment of any o/d balance.

 

However, I would have expected your business manager to have spoken to you and perhaps given you warning of what was about to happen.

 

Unfortunately, the days of a business manager having discretion to approve such o/d facilities are past and the decisions are now made by computers and Head Office policy.

 

Do you have a regular contact in the bank's business section. This is obviously the best place to start if you want their decision changed.

 

If you haven't already done so, contact the mortgage provider immediately before they contact you about the bounced DD. Maybe see if they can cut you some slack to reduce the current mgge pay'ts to what they should be, instead of the higher amounts you've been paying.

 

:)


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Do you have a regular contact in the bank's business section. This is obviously the best place to start if you want their decision changed.

 

If you haven't already done so, contact the mortgage provider immediately before they contact you about the bounced DD. Maybe see if they can cut you some slack to reduce the current mgge pay'ts to what they should be, instead of the higher amounts you've been paying.

 

:)

 

 

Thanks for the reply :)

 

I managed to speak to someone at the bank and they think it's a mistake - they cannot see a reason why I would be refused an overdraft following a standard annual review, after 10 years with the same account and the same overdraft and no change in circumstances. But obviously they weren't able to do anything about it over the weekend so I hope to see some action tomorrow (Monday)!

 

If they have pulled the rug, I will be able to pay the mortgage using savings and will just have to adjust to the sudden change in circumstances, but one of the adjustments I'll be making if this is the case is to find a different bank! :D

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Let us know what happens.

 

I would not be guided by the comments of someone in customer services who thought it is all just a mistake.

 

If the bank does not very quickly agree to maintain your a/c including the o/d facility, get to work quickly in finding a new bank.

 

:)


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Hmmm - apparently a 'diary error', whatever that means, which resulted in my meeting not being recorded and hence them thinking I hadn't bothered to act on the first letter about the account review. Fingers crossed they will reinstate the o/d today, and I should get the £8 charge for the returned mortgage payment refunded :)

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Sounds like you have this sorted now, which is excellent.

 

If the bank bounced the mortgage DD and your mgge lender charged you for this, make sure the BANK refund this.

 

Also, make the mgge lender aware of the bank's error which caused all this.

 

:)


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