No overdraft authorised

[brubaker]

If there is NO bank overdraft in place and the bank somehow authorises the transactions and as a result a series of debit balances are incurred, what is the legality of the bank reclaiming that money via a debt agency collection company?

 

 

Surely the bank should not of authorised the transactions to begin with as no overdraft was in place (standard current account)

 

 

Thanks

[fkofilee]

We need more info on who etc plz

[brubaker]

Opened an account with HSBC which I had for several years, in 2010 when there was money in the account I made a few transactions and down to HSBC's fault which was investigated by the FSA Ombudsman an amount came out of my account several months later due to an error on their part which put the account into a debit balance. There was no overdraft on the account, they would not give me one in anyhow.

 

 

They then closed the account even though I had responded to their letters, it's a long drawn out saga and as a result I was left with a debit balance which was referred to a debt collecting agency who started the process of collection, it was then put on hold whilst the Ombudsman looked into it, their conclusion was that the transaction was valid although they had made a few mistakes in when the monies was taken. The conclusion was provided well over a year ago but I have not heard anything since although it is on my credit file.

 

 

Is the debt enforceable, if no agreement was in place for an overdraft?

[renegadeimp]

Depends if the payments were guaranteed or not.

[Conniff]

I really would tell them what to do with their overdraft. I have said this in other threads, and it is my firm belief that if they said 'no' to an overdraft and then put you into one, that is forcing a loan onto you without a loan agreement with it's terms and conditions and interest rate.

Overdraft charges don't come into it and I would invite them to take you to court to recover it.

 

 

Now I am only talking about the interest charges on the od, not the actual money they paid on your behalf.

[brubaker]

Thanks guys...

 

 

Is it worth putting a note on my credit file regarding this (notice of correction), even if I paid the debt they would not remove it from my file would they?

 

 

Is there any case law where a customer was forced into a debt as you have said above etc etc? It's a bit like being forced into PPI.

 

 

Thanks again...

[renegadeimp]

You could issue a note of correction, but i would get a formal complaint to your bank first.

[Conniff]

This is worth a read:

 

 

"Banks are to be investigated for charging some current account customers more for their overdrafts than it would cost to take out a payday loan."

 

 

http://www.dailymail.co.uk/news/article-2602061/Probe-bank-overdraft-fees-cost-twice-payday-loan.html?ITO=1490&ns_mchannel=rss&ns_campaign=1490

[brubaker]

Thanks again guys much appreciated.. Is there a letter template to form a formal complaint?

[Klandestine]

I really would tell them what to do with their overdraft. I have said this in other threads, and it is my firm belief that if they said 'no' to an overdraft and then put you into one, that is forcing a loan onto you without a loan agreement with it's terms and conditions and interest rate.

Overdraft charges don't come into it and I would invite them to take you to court to recover it.

 

 

Now I am only talking about the interest charges on the od, not the actual money they paid on your behalf.

 

The law doesn't see it as forcing a loan onto you.

The Consumer Credit Act has some scope for unauthorised overdrafts but not in the same way as other forms of credit (like the loans you are comparing them to).

With unauthorised overdrafts they are only required to do things like provide you with information about what happens if your account goes overdrawn (such as what charges will be made, the interest rate etc).

 

Thanks guys...

 

 

Is it worth putting a note on my credit file regarding this (notice of correction), even if I paid the debt they would not remove it from my file would they?

 

 

Is there any case law where a customer was forced into a debt as you have said above etc etc? It's a bit like being forced into PPI.

 

 

Thanks again...

 

I think you'll have a hard time proving that it was forced because when payments are made out of your account the bank is acting on your instructions.

 

Can you explain the initial problem with the transactions which occurred several months later than expected in a bit more detail?

Edited April 13, 2014 by Klandestine

[brubaker]

I will dig out the report from the FSA as it is explained in their report, I will get back to you.

 

 

Thanks

[brubaker]

The law doesn't see it as forcing a loan onto you.

The Consumer Credit Act has some scope for unauthorised overdrafts but not in the same way as other forms of credit (like the loans you are comparing them to).

With unauthorised overdrafts they are only required to do things like provide you with information about what happens if your account goes overdrawn (such as what charges will be made, the interest rate etc).

 

 

 

I think you'll have a hard time proving that it was forced because when payments are made out of your account the bank is acting on your instructions.

 

Can you explain the initial problem with the transactions which occurred several months later than expected in a bit more detail?

 

 

It goes something like this in a cut down version....

 

A large payment which formed most of the o/d was authorised in late March 2011, but actually debited from my account in mid July 2011.

.

To explain the reason for the delay in the transaction being processed, any payment made using a cancelled card defaults (this is because the card was already registered with the Vendor and I had used the wrong one) to the banks internal suspense account. Once in the suspense account, the payments to vendor were deemed genuine and worked through manually by an operator. However the operator missed this transaction, this is what caused the delay. So if the card was debited on the correct date money was available in the account, but when the money was taken 3.5 months later there was no money in the account.

 

 

Really the transaction should of been declined as the card was report lost/stolen and I could not de-register that was the vendors online policy at the time. Also the operator in the bank made an error which caused the 3.5 months delay.

 

 

Does that make sense?

[Conniff]

Klandestine, I've seen that somewhere before only then it was spelt CagBmn

 

 

So if the bank is acting on instructions, what is the point of refusing an overdraft ?

[Klandestine]

It goes something like this in a cut down version....

 

A large payment which formed most of the o/d was authorised in late March 2011, but actually debited from my account in mid July 2011.

.

To explain the reason for the delay in the transaction being processed, any payment made using a cancelled card defaults (this is because the card was already registered with the Vendor and I had used the wrong one) to the banks internal suspense account. Once in the suspense account, the payments to vendor were deemed genuine and worked through manually by an operator. However the operator missed this transaction, this is what caused the delay. So if the card was debited on the correct date money was available in the account, but when the money was taken 3.5 months later there was no money in the account.

 

 

Really the transaction should of been declined as the card was report lost/stolen and I could not de-register that was the vendors online policy at the time. Also the operator in the bank made an error which caused the 3.5 months delay.

 

 

Does that make sense?

 

Yes that makes sense

 

I can't personally yet see any angle which could help your complaint from what you have posted but hopefully somebody else will.

 

Klandestine, I've seen that somewhere before only then it was spelt CagBmn

 

 

So if the bank is acting on instructions, what is the point of refusing an overdraft ?

 

Seen what before?

 

A bank won't give you an arranged overdraft facility if you don't fit their criteria.

But due to the way card transactions work, the way charges are taken from the account it isn't possible for the bank to prevent an account from going overdrawn or beyond any arranged limit.

That is why savings accounts don't have direct debits or proper VISA cards with them - else they would also have the potential of going overdrawn.

[brubaker]

I guess some of the overdraft couldn't be helped, the bank clerk made an error and as a result the transaction was pending but authorised. However with some of he other debt the bank should not of authorised the transaction, rather they should of declined the transaction the result would be the account going over drawn?

 

 

I may send a SAR to the bank as I recently had a letter from Card Protection Payment stating that I could be owed money for mis-selling of a service, also may have some over draft charges that I may b able to re-claim with compound interest?