Overdraft charges still being applied even with payment plan in place

[JodieRoberts]

hi all,

 

I wonder if any one knows if this is acceptable by Lloyds TSB. A couple of years ago I had to stop work due to disability and got into financial trouble. I got help through the CAB who wrote to all my creditors explaining this, provided them with a personal financial statement with offer of repayment. Now I know some of them wrote back and accepted, some didnt respond but have stopped chasing, the 2 that I have a problem with are Lloyds TSB bank account overdraft and Lloyds TSB overdraft. My overdraft was £1000 and I started to pay £6.50 a month as per CAB letter, every month they still apply overdraft interest and because it takes me over the agreed limit they charge me o/d interest about £14 a month and an o/d usage fee of £5. this has been going on for a year, so my overdraft is not £1025 which is more than it started out at. A similar thing happening with credit card, they were charging me interest plus a late payment fee of £12 so my account is now £300 more than it was. The credit card sent a letter a few months ago and it appeared to change my terms & conditions to allow me to pay the £30 a month as I had arranged to do, but still they continue to charge interest so only paying off about £2 a month. The CAB have had their funding cut so they could not help anymore.

 

So I'm wondering it is legal for Lloyds to still charge interest & fees on an account they know to be in default and no longer used - also they do not seem to respond or acknowledge receipt of letters

 

Any help would be appreciated.

 

thanks

Jodie

[firstship]

Jodie Hi Lloyds have a reputation for just this very approach to the situation you find yourself in.What they are doing is not illegal,immoral yes.

 

Please read the Banking Code on line,there is a section covering Financial Difficulty the next section is How to make a formal complaint have a good read,draft a letter based on what you read and make a Formal Complaint to Lloyds.

 

These banks lose sight of the fact that when we are in Financial Difficulties their action should be based on your ability to pay and not on the banks requirement to make profits

 

I could draft a letter for you,and will if required,but have a read first see what you think .

 

regards FS

[the_shadow]

Err if this is an overdraft then surely the newer lending code applies rather than the banking code....

 

 

http://www.lendingstandardsboard.org.uk/docs/lendingcode.pdf

 

Section 9 is relevant to financial difficulties.

 

S.

[firstship]

Shadow,You are so right,the New Lending Code,I have had a quick read of your attachment and it is even more depth than the old Banking Code

 

so JODIE read Shadows attachment, then fire of the letter.Lloyds belong to the BBA but cant and wont read they are in the wrong,and make a formal complaint to them as well.

 

regards FS

[JodieRoberts]

Hi FS & Shadow, thanks for your help. I've read section 9 of the Lending code - one thing i have noticed is quite alot of this is not effective until 1 July 2011? so does this mean the banking code applies in my situation? also have read the lending code, should Lloyds not have picked up on the fact i was on benefits, my overdraft was being used to pay mortgage, credit card being used to pay bills etc, this was nearly 3 years ago now, even tho I only got help from CAB when i as able to start to pay anything, in the beginning i had no help with mortgage from DWP just got £60 a week for nearly a year - only started to get more help with mortgage and DLA Nov 09. I had no contact from Lloyds before I went to CAB and from what I gather (CAB records) they received no response to their letters or the financial statement. The only response I seem to have got a couple of months ago was about the credit card, as this was going over the credit limit, due to late charges and interest being applied, was a letter not acknowledging the offer or the fact i had been paying this since april 2010, they just cleared all the overdue payments and changed terms & conditions to say min payment of £30 ( i have been paying £31.71 every month) so i assume this is some kind of acknowldement - however still annoyed about all the late charges & interest building up on the account - every month now interest is around £21 so im only paying off £10 a month.

 

Any help with compiling a letter to Lloyds would be much appreciated, as i dont know what to put, as my circumstances are unlikly to change and could get worse as I might loose DLA in nov

 

thanks

Jodie

[the_shadow]

Shadow,You are so right,the New Lending Code,I have had a quick read of your attachment and it is even more depth than the old Banking Code

 

so JODIE read Shadows attachment, then fire of the letter.Lloyds belong to the BBA but cant and wont read they are in the wrong,and make a formal complaint to them as well.

 

regards FS

 

Yep, I wish they publicised these things a bit more

 

S.

[the_shadow]

Hi Jodie,

 

I'm afraid this is a self help site and a lot of us are volunteers, if you can post up a basic letter outlining your situation people including myself will help and advise....

 

As to the july 2011 you are correct, this is so new that components of the code do not come into practice until slightly later however most of it is now active.

 

S.

[JodieRoberts]

thanks shadow - what sort of letter should i write, i.e should i call it a comlaint about all the overdraft interest and usage charges being applied as this is increasing the overdraft, as of april 2010 the overdraft was £1010 i have paid in £82 yet the balance now is £1023. do I ask for refund of the interest & charges or just to stop charging interest so i can get the balance down. similar question regarding credit card

thanks for your advice, its much appreciated

[the_shadow]

Ok, you are raising a complaint that the bank are not dealing with you as in a hardship situation... if they were they'd stop interest and reduce or remove charges and possibly pay back some of the previous charges to help you.

 

You then set out how you are in hardship and explain the payments you have made and the charges you are incurring.

 

S.

[firstship]

Jodie agree with Shadow,letter of complaint and hardship,you need to do this and see what their reaction is,I hope it will be in your favour.

 

regards FS