Can a bank remove an overdraft without telling the customer?

pgi947 · 28 Dec 2011 at 19:28

Hi guys,

Strange one this, just looking for some advise. Checked my bank balance earlier to see that my account is £400 light! after a panic I realised from my balance and available that there is now only £50 of difference, before it would be £450 to account for my overdraft.

So to me, it looks like as I haven't used my overdraft in a good 3 months or so that the bank have simply decided to take their money back? Can they do this without informing me first?

I'm not that annoyed, it would just have been nice to get told it was going to happen, or at least give me the option...

PhillyDee · 28 Dec 2011 at 19:29

Depends what it says in the T&C. It could say that they can after 3 months of inactivity. Was it not a 12 month overdraft or similar agreement?

bigjimmyauk · 28 Dec 2011 at 19:30

pgi947 said:
Hi guys,

Strange one this, just looking for some advise. Checked my bank balance earlier to see that my account is £400 light! after a panic I realised from my balance and available that there is now only £50 of difference, before it would be £450 to account for my overdraft.

So to me, it looks like as I haven't used my overdraft in a good 3 months or so that the bank have simply decided to take their money back? Can they do this without informing me first?

I'm not that annoyed, it would just have been nice to get told it was going to happen, or at least give me the option...

In short in the T and C's it will say that (insert bank here) has the right to remove your overdraft facility without prior notification or reason.

I don't think they can do it though if if leaves you in a financially difficult situation

example my OD is £1000 and i'm often £900 into it they can't remove it while in use cause they would be forcing me into a financial situation that would incur many charges. In that case they would have to write to you and give you X amount of time to bring to account balance back out of the negative

Efour · 28 Dec 2011 at 19:32

Look on your last paper statement or online... If you dont see that 0845 phoneyourbank

Glaucus · 28 Dec 2011 at 19:36

Depending on bank, overdraft isn't included in the avilable funds. Odd but that's how co-op do it.

Also they can remove at any time, but I bet they have to notify the custome. Have they got your correct address? And have you got any letters which you didn't read.

I keep getting letters and debt collectors for previous person in this house. They haven't changed their address and our over the limit, obviously on a secondary or third account as they haven't realised.

derfderfley · 28 Dec 2011 at 19:39

bigjimmyauk said:
In short in the T and C's it will say that (insert bank here) has the right to remove your overdraft facility without prior notification or reason.

This ^
I'm fairly sure this is in my lloydstsb current account T&C's.

LOAM · 28 Dec 2011 at 19:43

HSBC did this to me and the wife. They removed our OD's then gave us new ones and charged each account £25 (3 accounts) to provide "new" overdrafts. They did this without any correspondence and we only found out when looking at statements and calling them.

We closed all our accounts, they lost everything we had including credit cards and we changed to nationwide after 20 years with HSBC. I queried it with them and was told that we weren't desirable clients as we had nothing on the credit cards, no loans and weren't overdrawn, ie they couldn't make money from us from fines. I was told that to my face by my branch manager.

Al Vallario · 28 Dec 2011 at 19:45

LOAM said:
We closed all our accounts, they lost everything we had including credit cards and we changed to nationwide after 20 years with HSBC. I queried it with them and was told that we weren't desirable clients as we had nothing on the credit cards, no loans and weren't overdrawn, ie they couldn't make money from us from fines.

In which case they couldn't care less if you left?

Emlyn_Dewar · 28 Dec 2011 at 19:46

I think Natwest did this to me a few days before Christmas, checked the balance and the amount available seemed different than normal.
Just seems like they dropped most of the overdraft I had available.

I'm not looking forward to further account changes now that Santander are running the show.

Nitefly · 28 Dec 2011 at 19:47

Perhaps they gave you notice by post but you didn't see it? Would be a bit cheeky without notice regardless of what T+C say.

LOAM · 28 Dec 2011 at 19:47

Al Vallario said:
In which case they couldn't care less if you left?

No they didn't, they said as much.

Glaucus · 28 Dec 2011 at 19:48

Never had an issue with HSBC and they've always sent out letters with plenty of notice on when there's been a change, same with Halifax.

makeshiftwings · 28 Dec 2011 at 19:49

Nationwide took away my overdraft on my second account as I wasn't paying money into it regularly...but they did send me a letter about it first. I wasn't too bothered.

Efour · 28 Dec 2011 at 19:50

Santander are going to own Natwest ? Is that true ? IS it a merger or just purchase?

HangTime · 28 Dec 2011 at 19:57

I can see why this is annoying, albeit perfectly 'legal'. My wife had her credit card limit slashed by about 85% without warning once meaning that her card was declined in the supermarket a while back.

Some people have a 'use it or lose it' philosophy whereby they like to keep their overdrafts near the limit as otherwise they might take it away and "you'll never get that money back". Of course, stay like that for a few years and they'll likely have paid out more in interest/fees than their overdraft limit anyway

pgi947 · 28 Dec 2011 at 21:56

I'll give them a ring tomorrow and see what they say, the bank is Natwest btw.

I don't think I have any un-opened mail from the bank, as I don't receive paper statements any more I tend to make sure to open all my mail from the bank just to make sure I've not defaulted on anything. I will check with my other half, she has a habit of throwing letters in a draw or under a magazine.

And tbh I never looked through the T&C's, well not in detail anyhow. I do like to have the OD there 'just incase'. So the bottom line seems to be "borrow money and you can keep it as long as your in debt"

Thanks for the input, glad to know that this kind of thing does happen, **** a brick at first, thought someone had pinched £400 out of my bank!

neil_g · 28 Dec 2011 at 22:11

Glaucus said:
Never had an issue with HSBC and they've always sent out letters with plenty of notice on when there's been a change, same with Halifax.

Same here HSBC review it yearly and always send a letter with the result

SFFNoob · 28 Dec 2011 at 22:35

LOAM said:
HSBC did this to me and the wife. They removed our OD's then gave us new ones and charged each account £25 (3 accounts) to provide "new" overdrafts. They did this without any correspondence and we only found out when looking at statements and calling them.

We closed all our accounts, they lost everything we had including credit cards and we changed to nationwide after 20 years with HSBC. I queried it with them and was told that we weren't desirable clients as we had nothing on the credit cards, no loans and weren't overdrawn, ie they couldn't make money from us from fines. I was told that to my face by my branch manager.

Lovely!

neil_g · 28 Dec 2011 at 22:39

SFFNoob said:
Lovely!

Incidentally egg and Barclaycard are the same regarding closing your accounts down if not making money.

Greebo · 28 Dec 2011 at 22:44

Halifax did this to me. After 22 years of having an OD with them I found it removed one day. After checking they informed me I had be advised my OD was expiring via a message on the top of my bank statement (which i missed). So after 22 years of never needing to renew it, I suddenly did. Worse than that by the time I noticed I was £50 OD and they would give me back an OD until I was in credit.

Can a bank remove an overdraft without telling the customer?

Hitman