Charges for going over an overdraft limit

[woodpop]

hello there

 

first of all, thank you so much for your time with this site - you guys are a godsend.

 

i have been banking with barclays for about 8 years now. i have an overdraft facility which i consistently go over in the last week of the month (the week before my salary goes in). upon asking for an extension - i'm always told, that until i can show that i can stay within my limit for an extended period of time - i will not be eligible for an extension.

 

obviously, if i could stay within my limit for an extended period of time, i wouldn't need the extension anyway . . . aaaaaaarrrggghh !

 

so of course i've been being charged up to £75 / month for going over my agreed limit. i'm going to start proceedings to recover these costs as outlined in your BRILLIANT site - but i wanted to know whether the amount you were over your limit at the time of the applied charge makes a difference to the eligibility of the (indiviual) claim.

 

i.e. if i exceeded my overdraft limit by £100 - is it then within the bank's rights to charge me £25 ? i understand if i go over by say £4.50 - £25 is an excessive amount to penalise me by, but if i'm more than £25 over my limit - is it then not costing the banks that amount to cover this debt for me in the short-term ?

 

hope this makes sense . . .

 

cheers

 

woodpop

[richardc]

Welcome to the Group. You should first read the FAQs which will answer all your questions - then come back.

[Seminole]

The issue is not the relationship of the penalty charge to the infringement but rather the relationship of the charge to the cost incurred by the bank in dealing with your breach of contract. For example, if a bank charges you £35 for a bounced transaction, does it really cost them £35 to deal with it. If it doesn't then the charge is a penalty that can be challenged.

 

Before going down the path of issuing proceedings you should make sure you thoroughly reqad the FAQ and relevant bits of the Library as there are some things you need to do before issuing a court claim.

[woodpop]

thanks for that.

 

i'm still a tad confused though - in my case - when over my limit, the bank goes ahead and honours the payment but then charges me £25 each time a transaction's made. might they turn around in this case and say that they are covering my debt in the short-term and assuming the debt is at least £25 - it is a lawful penalty ?

 

woodpop

[woodpop]

p.s. i read all the faqs over last night and today but couldn't find anything on this . . . soz !

[richardc]

The penalty is unlawful in that it does not reflect the true cost to them of your breach of contract

[woodpop]

This topic was closed on 03/06/19.

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