Barclays Bank Student Additions Account withdrawal of overdraft.

[0rgazz]

Hi,

 

Firstly thanks in advance for any help. First time back here in many years and glad to see the community still active.

 

My son contacted me yesterday regarding Barclays. He has a student additions account and had an agreed overdraft of £500.

 

Like many others he has struggled to find work during the pandemic. His last job was at Asda last summer which he was laid off from around August. He believes it was around this time he was last able to make a payment. To his knowledge at no time did he exceed the overdraft which currently sits at £494.44.

 

He received a letter on the 20th Feb stating that the overdraft had been cancelled and referencing their last correspondence not being replied to. It stated that the amount due should be settled in full immediately including any interest. He told me that he hasn't received any correspondence from them prior to this. Neither has he received any emails, phone calls or text messages, despite his original request when he opened the account for him to be paperless. The reason for his opening the letter late was that he thought it was junk mail, as rarely receives anything important through the post.

 

When we spoke he said that he would give them a call on Monday (today) but I urged caution in him doing this as my previous experiences have taught me it's better to do something that can be documented. He appreciates that it has been some time between payments to the bank, but didn't feel that he had broken an agreement by exceeding the agreed figure and is fully committed to paying off the outstanding amount. He now has a small income from an online streaming platform and is happy to start resuming regular repayments to Barclays.

 

I did Bank with Barclays myself for many years and my own experience of dealing with them was a good one, so I am quite disappointed in how they have acted in this instance, particularly as I recommended them to my son in the first place.

 

Any help or guidance would be greatly appreciated. I would hope that we can resolve this situation fairly and amicably, but time will tell.

[BankFodder]

You are right about having a paper trail. Read our customer services guide – and get your son to read the customer services guide as well.

I'm afraid there is probably very little you can do to persuade Barclays to act decently or reasonably. They have made up their minds and not only that they will probably already have blighted his credit record.
Frankly their action is absurd and disproportionate. They know he's a student and they know about the difficulties everyone is having at the moment – but they don't care. Barclays may actually be one of the worst.
By all means he should call them and try to have some exchange with them – but he shouldn't expect that anybody will do anything helpful. He might try to ask them to downgrade his account to a basic account without any overdraft – and make an arrangement to repay the overdraft.

I'm sorry this is happening – but on the other hand it's a useful lesson about how banks can turn on you and maybe it is good that it is happening at this early stage in his life.

Also, he should set about opening another account – or even two accounts if he can. A parachute account is always useful.

I'm fully aware that this is not a massively positive or helpful response but I'm afraid like most of the banks, when they think they're going to get new student business – they will plug it all the way they can. They'll lend you an umbrella but as soon as it starts raining they ask for it back.

 

[0rgazz]

Thank you so much for the response and wow that was quick!

 

I've forwarded the link to my son and we will both read it shortly. The money (for me at least) isn't the main issue as I and the rest of his family can cover that. It's the way they have gone about this. My son was quite worried that he'd done something seriously wrong, but after reviewing the facts, I don't believe that he has. I haven't found anything regarding a fixed duration of the overdraft and do not believe they have done enough to communicate with him. I have a paperless system with my own bank (COOP) and they regularly contact me by email or phone whenever something needs to be discussed. 

 

Your thoughts and recommendations are very much appreciated, and agree that these lessons teach you a lot about institutions you may have had faith in. 

 

We will definitely exercise due diligence in selecting which organisations for him to be involved with in the future. 

 

Thanks again. Will update with our experience in due course.

[dx100uk]

just make sure he has no income being paid into the Account and just let them get on with it.

might pay him to get an SAR running too.

 

certainly don't pay it for him.

probably all Charges/interest aNYWAY.

 

 

they'll eventually sell it on to a fleecing DCA.

 

 

[AndyOrch]

Quote

 He believes it was around this time he was last able to make a payment. To his knowledge at no time did he exceed the overdraft which currently sits at £494.44. He received a letter on the 20th Feb stating that the overdraft had been cancelled and referencing their last correspondence not being replied to. 

 

Most if not all Overdraft facilities are granted on the basis of a monthly minimum deposit being made to service the account...that is norm as part of the T&Cs of the facility.

 

The letter you refer to above if you could get a copy of it and redact and upload a copy here as there are still legal procedures that the Bank must follow before demanding payment and terminating the facility.

 

He must be given Notice and 28 days to inform them of his proposals to settle the balance and of course they must give notice before marking his Credit Files with a default.  

 

His letter should be headed " Notice served under Sections 76(1) and 98(1) of the CCA1974 "

[0rgazz]

Hi,

 

Thank you for the reply dx100, much appreciated. 

 

He hasn't been paying anything in since he was laid off last summer.

 

We would like to resolve this amicably if we can, but are prepared to escalate if we feel they are not being fair.

 

I'm not familiar with SAR so apologies for my ignorance. May I ask how this would help?

 

He obviously wants to settle his debt, but also feels, as I do, that they haven't acted appropriately in withdrawing his overdraft without ensuring they have contacted him to establish why he hasn't paid for some time. We understand that their is also an argument for why he hasn't contacted them, but he was genuinely of the opinion that as the overdraft was interest free, it wasn't accruing and so he wasn't adding to the debt and worsening the situation. 

 

I don't think there are any additional charges or interest yet but they may now be applying them I guess.

 

Hi Andyorch,

 

Many thanks for the reply! To be honest I wasn't aware on what the usual T&C's were with overdraft payments as I haven't had one for many years. I fully appreciate that if he hasn't paid anything in for months then they have every right to contact him to find out why, but they didn't. 

 

I've uploaded the redacted docs in PDF format. Excuse the delay, not done this for a while.

 

As previously stated we do wish to resolve this amicably, but are prepared to fight our corner if needed.

 

Thanks again

 

 

Barclay withdrawal of overdraft letter page 2.pdf Barclays Withdrawal of Overdraft Letter.pdf

[AndyOrch]

Okay thanks...so quite informal letter with no required payment date and informing your son he now has an unarranged overdraft.

As long as he has no DD/SO set up on the account he wont incur further charges apart from the usual unarranged overdraft interest fee. If he does have DD/SO they must be moved to alternative banking immediately. 

 

His credit files should remain intact as the letters do not qualify legally as Notice of default.

[0rgazz]

Hi Andyorch,

 

 

Thank you for checking that out.

 

My son would prefer to correspond with them by email as not too confident on the phone, particularly after reading the customer services guide above. We are going to see if they will reinstate the interest free overdraft with a guarantee that it is paid into monthly until cleared. I know we may be urinating in the wind, but I would prefer to give them the option before looking at other routes.

 

If they refuse would is there any guidance on the best, most cost effective way of dealing with this? As a family we can settle the balance immediately, as would be the cheapest option, and then he could reimburse us personally without any interest cost. We would of course close the account immediately and he would never bank with them again, but if that's how they operate then I'm sure they don't really care. It's a shame as I had a 25 year mortgage with them, plus various accounts for 30 years with no problem at all, but times change I guess.

 

[AndyOrch]

I suppose it depends on how important his credit file is to him....without doubt suggesting a payment plan will most probably end up him being defaulted...but you never know... if a payment arrangement is agreed providing they stop the interest and do not default him then that would be the perfect solution...but you would have to test the water.

 

If the results of the DSAR show that the debt accrued is mainly charges and not your Sons spending then that may have an outcome on what action you wish to take...as advised above to do nothing and ignore them...they will no doubt default him and assign (sell the debt) to a DCA which will makes matters far more frustrating in resolving the matter.

 

Its important which ever way its agreed by phone or email that you keep a record (paper trail) of how this proceeds.

[0rgazz]

Hi Andyorch,

 

 

Thank you for your thoughts. We are sending an email and I will address the points you have raised. The principle for us is that he hasn't had any warning to act. Yes, he has been a little remiss in not ensuring he made some form of regular payment, but he didn't exceed the agreed overdraft and they haven't been at all fair in not ensuring they contacted him prior to removal. Will be interesting to see their response.

 

[AndyOrch]

No problem....on reading that letter again they refer to " as you haven't paid any money into the account since we last contacted you about this matter. "

 

I suspect they didn't make contact and if they did it could be construed as junk mail if its anything similar to what he now received as the whole letter appears to be an auto generated template with your sons name address account details added to the top.

 

It could also be a means of converting an authorised OD to a non authorised OD which in turn may allow them to make more profit for them.

 

https://www.barclays.co.uk/current-accounts/bank-account/overdrafts/

[0rgazz]

He assures me he hasn't received any form of contact apart from this letter, despite him asking for paperless communication when the account was opened. I'm also going through their T&C's and Fee documents can't find anything with regards to agreed regular payments. https://www.barclays.co.uk/content/dam/documents/personal/important-information/FeeInformation-StudentAdditions.pdf so that seems a little concerning considering this is his first proper account. I'm not making excuses for him not making sure he's properly informed, but if the end result is this, then surely they have a responsibility to make that quite clear.

 

[AndyOrch]

That may well be the case in this type of student account...I was generally talking about normal current account and overdrafts.

 

Also this " Tech Pack " they refer to ?  Did your Son have this ...appears to be some kind of monthly insurance cover scheme.

[0rgazz]

No he didn't have the tech pack. Just the student account with agreed overdraft. This was the minimum amount and he never asked for it to be increased.

 

[AndyOrch]

Fine...okay see how you get on and come back if anything transpires.

[0rgazz]

Will do and thank you again. This site was the first place I thought of when he contacted me and as always it's been massively helpful. I will be sure to drop a donation.

[AndyOrch]