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Spiralling bank charges causing unauthorised overdraft...

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In September 2012 my 20 year old daughter stopped using her Santander account on a regular basis, as, after a short period of self-employment, her circumstances had changed and she was now living on a budget, paying cash for everything. She had two months’ of direct debits still to come out of the Santander account and a £100 payment (loan repayment from a friend) that was due to go into the account would have covered that, so she assumed it was OK simply to leave her account unmonitored as she thought all would be covered.


She’s temporarily living away from home, so didn’t see her bank statements for September through to the beginning of January until yesterday, when a letter arrived here (which I opened at her request) telling her she was overdrawn, at which stage she asked me to open her bank statements and send her copies.


That was when she discovered that the money she thought had been paid into her account with Santander in early September hadn’t been paid in (the fault of person meant to be paying that £100 in, not the bank’s). Consequently, on September 24th, when the bank tried to pay a £17.75 Direct Debit from her account, contrary to what she believed at the time, there was only 16p in her account, so they returned the direct debit.


On October 24th Santander applied a £25 fine to her account for bouncing that direct debit in September. This put her in the position of having a £24.84 unauthorised overdraft.


On October 24th Santander tried to pay the second (and final) direct debit that was due. This also bounced, because, not realizing there was a problem, my daughter had not put any money into her account, which was already £24.84 overdrawn owing to the fine Santander imposed from September.


The situation then began to spiral out of control. Santander didn’t notify her that she had gone into overdraft, she (believing there were sufficient funds in an account she was no longer regularly using) hadn’t looked at her bank statements and didn’t know this was happening, so wasn’t able to redress the situation. On 24th November Santander added a further £75 fine to her account - this was a £50 fee for being overdrawn at the end of October and a £25 fee for them bouncing the direct debit in October.


This took her £99.84 overdrawn – entirely in Santander bank charges. Once again, nobody notified her about this.


On December 26th Santander fined her a further £100 for still having an unauthorised overdraft in November. This made her £199.84 overdrawn in total.


Until the letter arrived yesterday telling her about the overdraft, she had been sent no notification, even though the bank had her email address and mobile phone number and have communicated with her in that way in the past. The letter was dated January 2nd, but arrived on January 9th, and it was the first time she had been told about the overdraft, even though it began in October.


Her end of December bank statement shows that the bank had fined her a further £100 on top of that, for still being overdrawn in December, and they propose to take that money on January 24th. And at the time she received the letter they were fining her at £5 a day for still being overdrawn.


To stop them running up even more charges against her, I yesterday lent her £355, which has gone instantly into her account and should, I believe, be enough to cover the £199.84 overdraft and leave enough money in there to cover the overdraft fee of £100 that they plan to apply on January 24th and the fine they will apply on February 24th (this will be the £5 a day for the unauthorised overdraft from January 2-9, so I guess £35). It wasn't easy for me to come up with the money, but she wasn't in a position to do so, and I couldn't bear the thought of them racking up yet more charges.

Of course she should have checked her bank statements, but she genuinely believed that she’d been paid the £100 the so-called friend (who is now, unsurprisingly, no longer contactable) owed her, and that she’d left the account with sufficient funds to cover the two direct debits. £335 seems an obscene price to pay for this.

I have only ever once myself gone into an unauthorized overdraft situation, and the bank wrote to me that same week to alert me. I simply don’t understand why they didn’t do so in my daughter’s case. All her bank-related post comes to our house, so I would know if something had arrived.


She is going to write to ask that they cancel these charges – do you think she has a hope?

Edited by flusturedmum

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Not sure about Santander but I know with First Direct I can opt to have notices just displayed online, could she have done this?


You and your daughter have my sympathy, money matters do reveal who real friends are but if I lend any of mine money I asked to be paid back in cash so I know I have it in my hand then as it does bring out the worst side in some people.


Hopefully someone sympathetic will hear the case but if they don't, clear the charges, cancel the DDs and close the account

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