Clydesdale Bank Current Account Daily Charges

[gregpicard]

Hi There. Thanks to everyone that helped me previously with an RBS credit card case, i was successful in reclaiming charges.

 

On this occasion, I'm looking for some advice on behalf of my parents.

 

My parents currently have a Current Account with the Clydesdale Bank. They have an overdraft limit of £10,000.

 

In the past few months, due to timing in wages getting paid etc, they have gone over the limit for about a week at a time. This has resulted in a £25 per day overlimit charge. Obviously, total this up and it is a very hefty amount of charges indeed (I estimate around £1000+ to date)

 

I would not have thought a daily fee of £25 could be fair (I read a bit about the £12 fees etc but my knowledge is rather limited)

 

Do you think there is scope for complaining to Clydesdale and requesting they pay back those charges? Obviously, if there is a chance they would definately be keen on pursuing it, although they are also worried about Clydesdale trying to close their account / reduce their overdraft if they start making claims against them.

 

Kind Regards

[seriously fed up]

Current accounts are not the same as credit cards. You might remember that nearly two years ago now the Supreme Court threw out the OFT's case against the banks on the basis that the charges were part of a much more complex range of services and thus couldnt be described as penalties. Since then the OFT have "retired hurt" from this particular battle.

HOWEVER - and this is particularly important if you (or more importantly your parents) live in Glasgow and in particular in Govan or in the east end. This year, Govan Law Centre have been successful in cases with Bank of Scotland and also Clydesdale in getting charges returned. Now before you get too excited these cases never got as far as determination - basically the banks chose to settle out of court, with part of the agreement to say nothing about the cases that were put. Recently, though, GLC made public that they were entering into an agreement to allow more cases to be brought, mainly by clients in the east end of Glasgow. Clealry GLC cannot go against an agreement made with the bank and their first duty has to be to their client at the time (ie if its a good deal for the client then they can harldy insist that they take the case on to court - suppose despite the fact that even the Bank thinks they have a good chance of success, they win). But eventually this will get out - it will then probably be the subject of appeals right back to the Supreme Court all over again, since if current account charges go the same was as PPI, its going to make that look like losing small change.

None of that though does anything for your parents. There is no way that £25 is reasonable but the Clydesdale will say that it is as they point to the T&Cs. You could complain to the Clydesdale and maybe the OFT, but I wouldnt hold out much more hope for success with the latter as for success with the former (and I think your chances there are nil). You say they are worried about Clydesdale closing the account - before they trash your folks' credit record, what about beating them to the punch and opening a new account elsewhere? Of are they stuck (the £10k overdraft being an issue!)

[gregpicard]

Thanks for that info

 

I was afraid this might be the case regarding Current Accounts. Disappointing really, as £25 per day really is daylight robbery. Unfortunately, with their current situation etc there is no way another bank would give them a £10k overdraft so they are most definately stuck with the Clydesdale! They have opened a new account with Santander, however the overdraft is only about £1000. At least this will ease some of the problems from now on as they can transfer alot of direct debits to that new account to try avoid going over the limit at Clydesdale. Just unfortunate there doesnt seem to be much scope to reclaim what has already been taken.

 

Cheers

[ims21]

You may have a case under BCOBS.

 

Could be worth a read about it.

[gregpicard]

It may be worth noting that my father lost his business last year, resulting in a lot of debts to be paid off. Although they are back on their feet again earning very good salaries, the amount of debt they still pay off on a monthly basis is substantial and basically wipes out what they earn. So any charges are a big problem as they just compound the problem. I remember reading something about charges being unfair due to 'hardship' ? I could be wrong but it's just something that popped into my head.

 

I should also mention, that my parents currently have mortgage arrears on their current home, and are having to sell a second property they bought for my grandmother as it is in arrears also (The bank were going to repossess this property however have allowed my parents the chance to sell it now that my grandmother has been moved to another home)

 

With all of these current liabilities they have, it might make their case more favourable?

Edited September 8, 2012 by gregpicard

[BankFodder]

I suppose that £25 per day is on top of interest and that the interest rate on this overlimit amount is at some higher rate.

 

What is the overlimit amount?

 

I think that £25 is extremely unfair and I agree that BCOBS could be a way forward to challenge it.

However you need to consider certain things.

 

The bank would fight tooth and nail. Are your parents prepared to take them on?

The bank is capable of getting pretty nasty. They could invent an excuse to recall your overdraft

I gather that the mortgages are with the same bank and that those are in trouble as well. The bank could decide to get nasty about them as well.

 

I have alwas thought that charges can be challenged under BCOBS. Frankly I am sure that it is worth a go - although no one has tried it yet.

 

However a first BCOBS challenge really needs to be made by someone who is "up for it" and who is not any danger from any vindictive retaliation from an angry bank.

[seriously fed up]

There is no way that they can justify £25 in terms of whatever expense your parents have imposed on them by being late with their mortgage/ going over their overdraft limit. More often than not all that happens is a that computer produces a standard letter and how much is that going to cost?

I have absolutely no knowledge of BCOBS, BankFodder, so I am in your debt (so to speak) for bringing this matter to our attention. I fully agree though that to proceed this way one does indeed need to be "up for it" - VERY up for it, I would judge, since, as you say, the bank isnt just going to roll over and give up - QUITE the reverse. I think we are in the foothills of a steep mountain with a lot of challenging climbing to be done - but the first steps are being taken (the GLC cases for instance) and it can be done, and I have little doubt the "climb" will in due course be successful - but the top is a bit away just yet.

So gregpicard your mum and dad need to think about that - and their position with their mortgage and overdraft (indeed liability to the Clydesdale) is by no means an asset to their position. One way forward - and having another account opened elsewhere is a good start imo - might be to look to think about the possibility of moving as many of these liabilities away from the Clydesdale as possible - for instance to another mortgage lender. Maybe even think about transforming their current overdraft into a fixed term loan, even with the Clydesdale, which they couldnt recall as they could an overdraft. So to answer your question - I'm afraid their current liabilities to the bank makes life more difficult for them since, as BankFodder points out they give them a means to create further difficulties - sort of "you've been nasty to us so we will be nasty to you". Childish, but that's how it goes. They would be in a stronger position (or less exposed) if they could minimise the ways in which the Clydesdale could get nasty by either moving the liability away or transforming it to a form where nastiness is more difficult. THEN go after them with BCOBS.

[gregpicard]

Thanks for the replies guys.

 

Just to clarify, my parents have their mortgages with RBS (thankfully) so that's one less thing to worry about Clydesdale getting iffy about if we were to take a claim against them. The only liability they have to the Clydesdale, is the £10,000 overdraft itself. However, as you point out, the bank will probably fight tooth and nail and I wouldn't be surprised if they were to recall their Overdraft or reduce it. So we are in a bit of a Catch 22 at the moment!

 

They have looked into switching to another bank, but no bank is willing to provide them with the same level of overdraft due to their current credit rating. They were rather fortunate even in getting the £1000 overdraft from Santander. So for the moment at least, it seems we are stuck with them until the credit rating gets back up to scratch. At the moment they are earning good wages, paying everything they owe - on time - so it's just a case of building back the good rating.