Overdraft Snowball - BCOBS?

[hennessy13]

Hi all, thanks for reading.

 

Girlfriend is having trouble with Natwest.

 

We would greatly appreciate some guidance on this, as it seems a pretty serious mickey take by the bank.

 

Brief outline:

Opened account as a child.

Used as main account through to uni.

Became student account, eventually entered student overdraft.

Usual student account kept in good standing with working as well.

 

When leaving uni had overdraft. Got a graduate job.

 

New employer requires employees to bank with another firm.

Girlfriend does this as a term of the work contract.

 

She calls Natwest, outlines this and says the new account will be her main one as it is where the money goes.

She checks the outstanding o/d balance of about £1400 and makes an agreement with the Customer Service Assistant on the call

- to make a payment of £35 every month to pay off the overdraft.

 

She made this payment every month for 3 years.

 

It is her only account with Natwest.

 

Other than the monthly payment – that has never been missed

- there has been no activity on the account at all.

The account has not been used in any way for the last three years.

 

Yesterday we got a letter from Natwest saying things 'were now serious - but we can still help'... she called to ask what was going on.

 

Turns out they 'changed the terms and conditions' a few months ago (4 or 5 I think),

but they didn't send us a letter; she was told they emailed her (to an old email that is still checked occasionally)

and we knew nothing about it. We cannot find this email.

 

They also say she's had two other letters (all in the last 3 weeks) but we haven't received them.

As I say, we’ve had this address for 5 years, and we got a letter yesterday, so this seems odd to say the least.

 

Today we received a letter from a DCA regarding the same account.

Seems they were trying to trace her... at her home address (to be fair that's a good place to start).

 

The account has snowballed.

They introduced daily charges, increased interest well beyond the regular payment amount

and breezed past the overdraft limit last month.

 

This then drew unarranged overdraft fees and charges for not paying enough in... you get the picture.

She now owes nearly double what she owed 3 years ago despite making monthly payments for 3 years...

 

During the call yesterday the she clearly voiced her outrage at the situation

– but they offered no goodwill at all and she was told ‘the charges are fair’ and ‘all in line with the T&C’s’...

 

They were told to expect a formal complaint.

 

Surely they can’t do this????

 

Could really use a hand with this to make sure we get it right:

 

From what I can see there are a few clear breaches of BCOBS.

 

1/ They have to notify changes by post – email isn’t enough.

2/ They can’t default an account unless there have been no payments for 3 months.

3/ A payment agreement (though informal) was made with them 3 years ago – and stuck to.

4/ It is a snowballed account.

5/ They have clearly acted against her interests.

 

FCA investigation also seems interesting:

http://www.consumeractiongroup.co.uk/forum/showthread.php?422802-What-the-FCA’s-latest-investigation-means-for-free-banking(1-Viewing)-nbsp

 

Now I’m sure there’s something else or something I’ve just missed, so any help or advice is gratefully received.

 

There are some pro's on here who could definitely help out with the letter

[Klandestine]

That is strange. Why did she enter into a payment arrangement rather than converting the student account to a graduate account? (It doesn't matter if she needed to open a new bank account elsewhere, you are allowed to have multiple bank accounts).

 

A graduate account would have allowed her to keep the overdraft interest free which is then reduced each year. This is the norm and helps people to manage their finances and pay the overdraft off entirely.

Edited April 26, 2014 by Klandestine

[ssett]

I thought a student account was automatically changed into a graduate account (again interest free for some time after graduation).

Did Nasty Bank fail to do that?

[hennessy13]

Hi Klandestine, thanks for responding

 

 

Neglected to mention - it was a graduate account when the arrangement was made.

 

 

The arrangement was made on a phone call, when informing them the main account would now be with another bank... of course the arrangement went on for three years, but for some reason interest did accrue, and at an extortionate rate for the last few months...

 

 

Any thoughts?

[ssett]

• "In your 1st year with our NatWest Graduate Account, you won't have to pay interest on arranged balances up to £2,000
  
• In your 2nd year the amount of overdraft you can use interest free will reduce so you will start paying interest on any amount borrowed over the 'interest free amount'. The amount you get interest free depends on when you graduated."
  

http://personal.natwest.com/personal/current-accounts/compare-current-accounts/graduate-account.html

[hennessy13]

ssett, you're a star.

 

 

Checking that link says the first year was interest free, year 2 was under 1 k - also interest free, year 3 was under 500 - also interest free, or SHOULD have been until they ran it through the mangle...

 

 

It's a dormant account that's gone from sub 500 to 2.5k in under six months due solely to charges, with no communication from the bank at all.

 

 

Definitely BCOBS, wouldn't you say?

[ssett]

ssett, you're a star.

 

 

Checking that link says the first year was interest free, year 2 was under 1 k - also interest free, year 3 was under 500 - also interest free, or SHOULD have been until they ran it through the mangle...

 

 

It's a dormant account that's gone from sub 500 to 2.5k in under six months due solely to charges, with no communication from the bank at all.

 

 

Definitely BCOBS, wouldn't you say?

 

The only thing is there might have been some conditions with that. But at least you might have something to go on as an argument

[hennessy13]

Just reading about the Graduate Overdraft Repayment Plan they mention on the website - nothing found in a search of Natwest site... and only a few comments on it on varied other sites...

 

 

Interesting how she arranged repayment without being told about the repayment plan... And as BCOBS provides a general duty to look consider the best interests of the customer, Natwest seem to have missed a few key elements out.

 

 

Will write up a BCOBS letter and mention all the things they've neglected to mention as well.

 

 

Any contributions appreciated guys