Bank legalities

[Alex-RS]

Say you've been given an overdraft limit of £2,850, and you are £2,600 in overdraft, are the bank allowed to lower your overdraft limit to 2 grand? Therefore they then start charging you for the £600.
Bearing in mind, they can see from your statements that you don't earn enough to have that deducted from your account and still pay the direct debits you have.

[Asharin]

I can't see how that can be legal.
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[Itchy]

Hold on I was reading this in a text book , overdrafts are subject to on demand and thus the credit facility can be revoked and immediate payment be demanded.....

Its all in the small print
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[Alex-RS]

[Alex-RS]

[SlimRick]

Open another bank account and fvck that one off

[Renton]

I don't understand why a bank would give such a high overdraft limit.

My bank will only allow an amount equivalent to my monthly salary, therefore I would not be living in my overdraft, and to be honest I'm quite grateful of that.
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[M1ke]

Nationwide by any chance?

I'm afraid your mate hasn't a leg to stand on. It is common knowledge that overdrafts can be revoked at any time, it will have been displayed/read out to your friend when he applied. All banks operate this policy for personal and business bank accounts. It is however rare for them to do this, until recent times anyway.

[M1ke]

From First Direct website
6.5 We may reduce or withdraw your overdraft limit at any time and demand in writing that you pay any money you owe us immediately.


From Nationwide website
Overdrafts are usually reviewed every six months and may be reduced or removed depending on the following factors:


the conduct of the account, e.g. has it exceeded an authorised limit
the conduct of any other accounts that you may hold with us
whether the account is being used regularly
whether the level of funds being paid into the account is sufficient to support the overdraft, and
the credit score based on the account behaviour


Etc

[Pie-Roe]

I got offered 2.5 grand overdraft, I'm 18 earning between 180 and 270 a week.

I only got my 200 for emergancies, went into it once on a night out

Pyro
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[iooi]

He needs to talk to them and see if they can come to some agreement.
They may allow him to reduce it over a few months by waiving the charges, while he is over the limit. Or allow him to take a loan for the O/D and clear it completly.

The main thing is to talk to them and explain the situation. There must be some reason they have done this, possibily related to other accounts/loans/CC he has elsewhere.
Does he have money problems ???

One can only guess they were earning a lot more at one point to get such a large O/D limit.

Many banks are now looking at O/D limits and income into the accounts in a effort to reduce the chances of people defaulting. This is to protect not only the bank, but also the person from getting to the point that they ruin themselves.

In reality a O/D should be no more than 1 months income.

Any credit facility can be withdrawn at any time, so long as the notice periods in the T/C are followed.
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[Robby]

That is the standard practice with overdrafts, they're repayable on demand.
If you're taking the piss, like you've been in the red and getting gradually deeper into it for a year, they'll reduce what you're allowed. They did it to me, and cut my overdrafts from 10k to 2k.

I moved the excess onto a personal loan, and paid off the remainder. All nicely squared away now.

Overdraft is intended for short term borrowing, long term they want your to be structured and put the debt into a loan.

[Tonka]

I know that it's easier said than done and that I'm speaking from experience having had an overdraft before, but seriously they are really dangerous ground!

The Banks have you over a barrel and I think what Robby did is the only way to get straight, however, even getting an unsecured loan these days is very difficult if you already have an exceeded overdraft on your record.

Tell your mate he/she needs to get another account for their wages to be paid into, so that they make sure they always have some money available, then go to the Bank to renegotiate some type of loan or repayment schedule that is affordable and has it all cleared as quick as possible. Then don't use an overdraft again!

I use Halifax Cardcash Accounts that have no overspending possibilities to act as a safety net to stop me ever making a mistake. I have 2 - one for wages and where all the DD's come out, the other for spending money which is transferred online by me each month. When that runs out it's 'beans on toast' time. Get Bank Accounts online and keep an eye on them - it's painful and depressing knowing you've got no money, but nowhere near as bad as a 'surprise' debt and knowing you're stuffed for months to come. Reality is harsh sometimes
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[MarJay]

The simple fact of the matter is, an overdraft is for emergency use only. Its for stuff like when your washing machine has broken and you have an interview on Monday with no clean shirts. Or your boiler breaks and you have no gas cover.

The amount of people I've met who seem to think its simply 'money I can spend' actually worries me a lot.
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[Alex-RS]

[iooi]

So he has 2 acc's one with a £2850 & another with a 2K limit...

He's lucky that he has not had the limit cut to zero on one of the accounts.

They should only be used as a short term loan... Just look at the interest rates charged.
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Just because my bike was A DIVVY, does not mean i am......

[st3v3]

My bank(TSB) screwed up my D/D's and I found out I didn't have enough to cover something a day before it was due out, it was a £450 O/D and I only set it up to pay for my bike test before the new test came in. When I found out it was screwed up I had to take out a £1000 loan to clear it or face the daily charges which would have been over a fortnights worth, I got the loan and paid off the O/D, the bank who wouldn't help me when I was nearly buggered offered me a 2.5K loan when the O/D was settled, I was told as it was paid off they would cancel the overdraft, it now seems to still be there which I'm not happy about so must cancel it(useless at checking and sorting stuff until it's vital). Now everyone keeps spamming me with cash/loan offers, can they do this? I'm sorted now and I'm only paying the loan but how can your mate get into so much debt?

I only have what's left of my loan to my name which is nothing compared to some peeps debts but I feel wrong about it all the same. It's too damn easy.
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[Alex-RS]

[Charlie]

https://www.bbc.co.uk/iplayer/episode/b00fvc73/b00fvbtv/How_to_Rob_a_Bank/

How about £40,000 in debt in 8 months and nothing to show for your name.
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