Overdraft

[derek1]

We just can not afford the new overdraft fees which in our case will be £23.25 a month as opposed to just over £5 a month now.

 

My question is what happens if we just move all our business to our other bank account with obviously the overdraft not being paid off? How long before they freeze the account and send us for a ccj?

 

Thanks

[dx100uk]

how long is a piece of string?

 

you might find BCOBS useful if these charges are since nov 2009

 

have they been treating you fairly?

 

DX

[derek1]

These are the scandalous charges being introduced in June. Have you not seen the publicity for it? The BBC said that it will be cheaper to get a wonga loan. The shareholders have protested. People who can are leaving in their droves. Branches have overnight gone to one cashier and a row of machines. Business centres like the one in Dartford have closed very quietly. It is taking on average an hour to get through to Mumbai.

 

So back to my original question how soon would they freeze the account?

[BankFodder]

How long have you banked with them, how big is the OD and how long have you had the OD?

Are you over your limit?

 

Although they have a contractual right to call in your overdraft when they want and without explanation, I have always thought that for customers who have their overdraft for some time and who have conducted their accounts correctly, it would be unfair - and contrary to BCOBS to exercise this contractual right.

Also, although banks have a contractual right to vary their Terms and their charges, I have always thought that where they impose variations which essentially change the character of the contract - or where the variations are not justified by market variations, that this would also be unfair.

 

If you have had a longstanding overdraft and the account has been conducted correctly then I think that your response should be to stop using your account, to make a proper proposal to repay the overdraft and to take a BCOBS action if the bank tries any funny business.

 

The correct course of action - of course, would be for the bank to convert the OD into a loan. However, I fully expect that Barclay's would simply try to bully you into submission - and so it is partly up to you to decide what kind of action you would be prepared to take.

[BankFodder]

Just to add, - that if you continue using your account normally, now that you have received notice of the changes, it could be said that you have accepted the changes. For this reason you need to decide what to do without delay.

 

Also, beware, the other banks will be looking to see what Barclays can get away with and will probably follow them in due course.

[slick132]

Hi Derek,

 

Yes, Barclays new overdraft charges are receiving lots of bad publicity.

 

Eg in the Telegraph Money section on Saturday 19th April, a full-page article was headed, "Barclays is about to triple the cost of my overdraft." - http://www.telegraph.co.uk/finance/personalfinance/consumertips/banking/10772832/Barclays-is-about-to-triple-the-cost-of-my-overdraft.html

 

Barclays say they want their charges to be more transparent and easier for customers to calculate. Hmmmm ..............

 

Give us answers to BF's Q's above and we'll try to help.

 

[BankFodder]

 

Barclays say they want their charges to be more transparent and easier for customers to calculate. Hmmmm ..............

 

 

 

 

 

Yes, Barclays do say that their new charges make them more transparent.

However, when they were invited on to MoneyBox to explain them, they declined to be interviewed. How does that fit with transparency???

 

The only transparent element here is that these new charges make it even more transparent that Barclay's will continue be hypocrites and to fleece their customers for the foreseeable future.

 

Barclay's??? Don't they make you sick.

[derek1]

The od has been operating for years. If we can use our other bank we can live within our income but we do not have the extra £500 to pay off the od. We have a poor credit rating and also we can not afford to repay a loan even if we were able to get one!

 

We are one of the 30% (so Barclays reckon) who will be adversely affected - adversely for us..profitably for them!

[derek1]

The thing is if we move our income to another bank and just let Barclays get on with it - then the charges per month by the end of the year would put our debt with them to £750 which would mean they could try for bankruptcy. If we pay £3 odd a month into the naccount then that would keep it below £750 by the end of 12 months but then I would have to increase the payments to the amount that the charges would be anyway to keep it below £750 for the next years... either way our meagre income can't manage it!

 

If I knew that they would freeze everything after 2 months then I would let it happen and just say we can pay £5 a month take it or leave it etc and the process will take its course!

 

Little s**ds!!

[Klandestine]

I think quite a few people have been expecting this from Barclays given that many other banks already operate a similar charging structure for overdrafts.

 

Your situation is what it is too be honest. No amount of whining about the "scandal" of these new fees is likely to change anything.

 

Do open a bank account elsewhere - I know you say that your "credit rating" is poor but perhaps they will give you an overdraft which is cheaper than Barclays. (Off the top of my head I think Nationwide has an account with an interest free overdraft for 12 months).

 

Quite a few of the banks are offering £100 incentives for switching to them using the Account Switching Service. There is nothing stopping you from opening a dud account anywhere and switching it to one of the banks offering a free £100. Although these accounts may have direct debit and/or monthly pay-in requirements that you need to watch out for.

 

Lots of credit card providers are also fighting for customers and are offering 0% on balance transfers and/or purchases. It could be worth moving any existing credit card debt you have to one. Or to use a card which is 0% on purchases to pay for your everyday things.

[BankFodder]

The od has been operating for years. If we can use our other bank we can live within our income but we do not have the extra £500 to pay off the od. We have a poor credit rating and also we can not afford to repay a loan even if we were able to get one!

 

We are one of the 30% (so Barclays reckon) who will be adversely affected - adversely for us..profitably for them!

 

The thing is if we move our income to another bank and just let Barclays get on with it - then the charges per month by the end of the year would put our debt with them to £750 which would mean they could try for bankruptcy. If we pay £3 odd a month into the naccount then that would keep it below £750 by the end of 12 months but then I would have to increase the payments to the amount that the charges would be anyway to keep it below £750 for the next years... either way our meagre income can't manage it!

 

If I knew that they would freeze everything after 2 months then I would let it happen and just say we can pay £5 a month take it or leave it etc and the process will take its course!

 

Little s**ds!!

 

Do I gather that your overdraft is £500? It may sound like a lot to you - but it may not be a major problem.

 

You must open another bank account as soon as possible.

You should not simply abandon Barclay's without explaining your position to them. They are entitled to know what your reasonable plans are for disposing of the debt. However, you can be sure that once you tell them that you do not accept their new terms, that they will leap into action and recall your overdraft with very little notice.

Do not do anything on the phone - unless you record the call. You should put everything in writing.

 

After you have opened your new bank account, write to Barclay's and tell them that you do not accept their new charging regime and that you will therefore be making your banking arrangements elsewhere.

 

Make a proposal which will pay off the £500 in about a year if you can - don't forget to take account of charges and interest. Make sure that the proposal is manageable - because you only get one chance. If a few months down the road, you miss a payment they will regain the moral high-ground and they will just go out to make trouble for you - which is what they are best at.

If you calculate that you need 18 months to pay off the debt - then propose that. No point in proposing something that you won't be able to manage.

Explain in your letter that as you have been a longstanding customer and you have conducted your account correctly - and because you have had your overdraft and operated it within its limits for many years, and because it is their actions which are causing you to move away from them, you do not expect them to withdraw the overdraft peremptorily but rather you expect them to allow you to pay it off over a reasonable period of time and at a manageable rate for you.

Remind them that they have a duty to treat you fairly. Suggest to them that the overdraft is converted into a fixed loan.

 

Let me warn you that Barclay's will be incapable of understanding the reasonable logic of this letter and they will ignore it and simply come thundering down upon you. In reality, you are not writing this letter for Barclays but rather you are writing for it to be read at a later date by the Ombudsman or by the Court - depending on which route you decide to take once Barclay's start to smash up your life - and you can be sure that they will do this - just for the sake of £500.

 

They will not be interested that by leaving them because you can't afford their new charges, that you are actually acting responsibly and avoiding getting into some spiral of debt. In fact, in your letter, make this point to them that this is what you are doing.

 

When they reject your reasonable proposal, it is important that you start making your proposed payments anyway. They may say that they are refusing them - but make them anyway. They are not entitled to refuse any attempts by you to reduce the debt - even though they may do so. The more they protest, the more unfair they become and the better your position gets.

 

What a waste of time these banks are and how boorish.

[derek1]

Thank you Bankfodder

 

We already have another account with another bank so that is already to go. I will wait til variuos dds have gone out this month before transferring everything over. Yes the od is £500. I will write the letter once all the dds and the money in has gone over.

 

Someone has got a petition up - over 7000 signatures so far - whilst we know this will not make the slightest bit of difference, it makes us feel better!!

[BankFodder]

Don't forget that the more that you use the account, the less you are going to be able to say that you reject their changes.

Also - don't make any mistakes.

One stray forgotten DD which hits your Barclay's account will bring you down like a house of cards.

In fact in your letter to Barclay's I would put the matter beyond doubt by instructing them that all direct debits are hereby cancelled. Also that you confirm that you have destroyed all chequebooks and cards.

Make sure that there are no stray cheques around which have not been presented.