Overdraft Facility - Legal or Illegal?

[tonyjordan]

Hello there - hopefully someone can advise me on this issue that's been going round in my head since all this bank charge thing kicked off!

 

I opened a bank account with Halifax on my 16th birthday which I've had ever since (some 12 years).

 

Shortly after my 18th birthday I was sent a letter from the bank advising that an overdraft facility had been placed on my account (only something small like £200). Not wanting to get into debt I asked them to remove it, which they did.

 

However not long afterwards they put it back, this time for a lot more (over £1,000). I gave up and just left it there - never used it, until later on in life when bills started to come in etc - well I'm sure you know how it is.

 

Anyway, I've recently filed for claims relating to bank charges but it got me thinking .... I have never signed anything in relation to my bank account which applied, asked for, requested an overdraft facility. The only document I ever signed was when I was under the legal age at 16 years old. Is my overdraft even legal?

 

Oh for those that might suggest I applied over the phone for an overdraft - no, as I never speak to my bank!

 

Any thoughts you might have on this issue would be greatly received as it will have a huge impact on my claim for those fees they've been charging me all this time if the facility was illegal in the first place!

 

Thanks for your time!

[buzby]

Don't see it - they could argue if you didn't want to use it it was within your power not to do so, and if you did - then their usual T&Cs would apply, you don't have to sign anything to signify acceptance, usage is deemed good enough. (Which I think stinks, but there you go!).

[tonyjordan]

Thanks for your reply. I agree with the point that it was up to me whether the facility was used or not but my point being any thing in relation to the Consumer Credit Act signed at 16 would be unclaimable ... or is it?? The terms and conditions would have been signed as a 16 year old.

[buzby]

I stand to be corrected, but an overdraft isn't credit by definition, it's a facility added to your account which you can choose to use or refuse as appropriate. As I recall, my overdraft did not need to be regulated unnder the CCA.

[Guest NATTIE]

an overdraft would be classed as credit but they did not offer an overdraft when you were 16 only when you were 18 so they are in compliance with the banking code on that one. As buzby has said though, in post 2 you used it so you are accepting it being there.

[tonyjordan]

No problem and thanks for your responses.

I just thought I'd raise the question, being that I'm already moving on reclaiming the fees and it got me thinking that I'd never asked for the facility in the first place. If it's a case that the banking code covers them (although I will check that point myself) then so be it - I've certainly made the most of it being there the past few years!!

[blacksheep1979]

Sorry but you spent the money now own up and pay back what you owe. Use the laws to your own end when its right but don't try screw people or companies out of money when it isn't due you.

[Guest NATTIE]

page 1 or 2 I believe

[thecornflake]

I think it might be classed as providing a service? Not sure how this affects things but it might be worth thinking about.

 

I agree to a certain extent that if the overdraft is money you spent on bills etc you should pay it back. However I know where you're coming from.

 

It could be irresponsible lending but that might be difficult to prove.

 

Natwest were in the news earlier in the month for extending people's overdrafts over xmas without their asking for it, I think if this was commonly against any rules then the FSA/FOS would have said something.I'm not saying that proves it's lawful but I don't think you have a fantastic case against them.

[tonyjordan]

Thanks for the responses - they're all very useful in terms of getting other viewpoints, although Blacksheep1979 I'm not sure why you've made those comments - It's not a case of trying to screw someone - it's a question of whether the bank was right to have reinstated an overdraft that was not requested and more to the point that any documentation relating to the account was signed by a minor.

If you take a look at the profits these banks are making - I'm hardly looking at screwing anyone! Just getting back what's rightfully mine (the overcharged fees) but at the same time raising the question of whether the account should have allowed to go overdrawn in the first place.

[Guest NATTIE]

tony, I think what blacksheep was doing is interpreting what you are writing as a way of getting out of what you owe which is one interpretation that could have been read from the post. I didn;t but if you used the overdraft then you have accepted the overdraft. If the interpretation that blacksheep has made is correct then i reiterate his words entirely. You signed the T&C's at 16, no overdraft was offered until you were 18 so nothing has been breached.

[mollington]

Anyway does it make any diffrence, you dont incur charges by staying within your limit