Reduced Overdraft No Notice - Nationwide

[Howard0181]

I have had an account with Nationwide for many years. I have a Flex Account where they offered me an increase in my overfraft from £3,000 to £6,450 earlier this year.

 

Yesterday my account was overdrawn by about £2,300. I went to pay for lunch and my payment of £20 was refused. I called Nationwide and was advised that they had written to me on 15th July stating that my overdraft limit was reduced from £6,450 down to £1,000 with effect from 13th August 2008. I said I have not recieved any letter of this. They said they wrote to me. I said if I had recieved such a letter I would have contacted bank and would have dealt with situation. I asked why you have done this and its because of the money in and out of my account.

 

I asked what was my balance a year ago and the answer was £2,400. I asked have I ever gone over my agreed o/d limit and the answer wsas no. I asked have I ever done anything wrong on my account and they said no.

 

I got passed over to collections and all they wanted was £1,300 from me get my o/d back to correct figure. Now it seems that they could charge me penalty fees on my account for today. They made a deal with me to reduce my o/d to £4,500 and that it will be reduced by £100 per month every month until its zero and then they will not offer me another overdraft.

 

They said that this arrangement will me marked as a loan on my credit report and when the o/d is paid off it will be marked as satisfied.

 

Any advice on what I should do?

[Guest Old_andrew2018]

I noticed you have recieved no replies, I don't have an answer myself so I am replying to BUMP your thread, I expect someone will be along with advise.

[indebtstudent]

Just noticed this I've been rather busy lately, I'm an ex Nwide employee so I can give you some useful insight into the procedures.

 

First I should say you are not alone, my own O/D was cut dramatically, fortunately I was able to transfer some money at short notice. I noticed several other customers having thier limits cut. Make no mistake about it Nationwide is actively seeking to reduce its exposure to risk. I saw nothing official on this but was left very much with this impression, particularly since I was given the same sort of reply as you.

 

Right on to the useful info. There is some term in the contract saying Nwide reviews the OD from time to time, I believe its normally every six months. They do give you three weeks notice (Whoopy) where the limit is reduced, they do this my letter in the ordinary mail.

 

The current refund of charges criteria says, under exceptional circumstances, that 'where the customer claims they have not been notified of a reduction in thier overdraft balance of probability sits with the customer.'

 

Now there's no timescale given on this and the problem any customer has is that overdrafts are repayable on demand (even though if banks did this the system would probably collapse overnight).

 

From what you posted my main concern would be is this arrangement causing you hardship?

 

There are other accounts out there which offer 0% O/D, last time I checked A & L and Natwest did. I found A & L to be a better bet as they match you existing overdraft so long as you meet certain criteria.

 

I am not very familiar with the rules & procedures for collections. I was aware they could set up a reducing overdraft but I have a problem with it being called a loan. Maybe they have always done it that way and this is the first time someone has picked up on it.

 

If you do incur charges I would certainly challenge them as the charges are thier fault. For example after you realized the O/D had been reduced it does not appear that they gave you the three weeks notice you initially missed out on.

 

Personally I would take the complaint to the highest level purely to put them out, although I honestly don't know if this would do any good. If nothing else taking a compaint to the Ombudsmen costs them some cash.

 

If I were you I'd be annoyed at the way this has been handled and I would focus on making alternative banking arrangements. It is worth asking them whether this serious of events will adversly affect your credit file, if you don't get some definate answers then you have to complain - you shouldn't be penalised for not recieving a letter.

 

A large 0% or low rate credit card may help to clear the O/D but this requires discipline to make sure you continue to clear this debt.

 

Hope this helps, post here or PM if you have any more questions and I'll do my best to answer them.

[Surfer01]

Funny they did exactly the same thing to us stating a letter had been sent but we never ever received any such letter. We are now in the process of paying off the £2000 overdraft on a monthly basis but 60% of the overdraft consists of charges but I am concerned if we mount a challenge Nationwide will withdraw it without further notice on a whim.

[indebtstudent]

Then they are in breach of thier own refund of charges procedure, open an account elsewhere before going down the complaints procedure if you feel threatened.

 

The more complaints they recieve the more it costs then and the more they'll be forced to admit they dropped the ball on this one.

 

What really annoys me is the double speak they use, so far that's three people here, some relatives and other customers I am aware of so why don't they just say we're reducing overdrafts in general instead of this review non-sense.

 

Yes they do have regular reviews but I would argue thier CRITERIA has changed and that is what is producing the different results. In any event there are other better current accounts depending on what you want from your account.

[jadzia.dax1]

Hi all,

 

Nationwide stopped my £1500.00 overdraft without letting me know first,

When I rang up to complain they say they sent a letter but I never got one...it seems they do this alot.

The reason they gave me for stopping the overdraft was because they took some bank charges that made me go £2.02 over my overdraft. (I'd never gone over it before) At the time this happened I was in hospital giving birth & had forgotten to transfer some money into the account before I left to go to hospital, I had other things on my mind...like labour

Tried to explain this to them but they didn't care & demanded I pay off the overdraft at £70.00 a month, I told them I couldn't afford that especially with new baby but they wont budge on the amount.

So i've been paying it at that amount & it's now £900.00 but I've missed payments on other things to try to keep this up so now i'm in a mess. I've asked them again to reduce the amount but they won't.

But enoughs enough I didn't pay last months & will let them take further action if they so wish...they were extremely quick in sending a default notice. But hopefully if/when it goes to court i'll get a better payment amount. I don't mind paying the overdraft back but why carn't they be more reasonable on the payment amounts. I'm sure with all the extra charges the'll add i'll be paying this off forever!

Sure is a lot of trouble for £2.02!!

[Howard0181]

Thanks for replies.

 

I have written twice with my complaint. I have recieved a standard letter stating that they are investigating. They should respond within another two weeks. From what they told me on the phone when I found out about the problem (collections department) they have added something on my credit file. I was forced to make an agreement with them.

 

I have told them that I require compensation so we shall se what they say about that. I believe that they have damaged my credit rating which in todays financial situation can be damaging.

 

I have never recieved the reduced overdraft letter and they have not been able to send me a copy. Looking at my bank records the highest I have been in past year is 50% of the agreed overdraft facility

 

My plan is to sue them for the damage to my credit record.

Edited September 6, 2008 by Howard0181

[indebtstudent]

Given the amount of instances of this happening on what what appears to be a small sample I would advise you to persue this fully. The more times this goes to the Ombudsmen the more sick of it they will become, though they aren't a regulator they can use thier powers to 'persuade' companies to change lthier poilcy. Like when they fined A & L for retaliatory account closure, everyone knew that they would risk the same treatment and stopped doing it.

 

Message for Jadzie Dax (love the name, yes I'm a trekkie too!!!) I would recommend you seek some advice from Citizen's advice or simialr. Whilst it is probably true to say they might look like they're being harsh in court you should be able to sort this out without the need for court.

 

The first thing any debt advice charity will do is work out what you can afford to pay back, if the creditor refuses to accept this they will produce this offer in court to show you have been reasonable. It is an unfortunate that lenders threaten court because they know it scares people when in fact the court is also going to want to establish how much you want to pay, not how much the organisation will accept.

 

As far as I remember charges should be refunded for a first instance when an account holder is hospitalized, though I could be wrong. I left a few months ago and I never actually used that as a basis to request a refund. If it is covered I am not sure if pregnancy would be viewed as hospitalisation.

 

Sorry to go off on a tangent, ummm if you start your own thread or PM I can help you there.

 

Regarding Howard's situation you've done the same thing so far, I can understand your thinking in wanting to sue them. However I would suggest considering the Ombudsmen, not only does it cost the organisation money (regardless of the outcome) the decision is binding on the organisation but NOT on you. If you make it clear in your claim that you will take the matter to court should the outcome be satisfactory, and state the facts, I think it should go well.

 

The only drawback is the time factor, with financial institutions being so spectaularly inept the FOS are very busy indeed.

 

I guess what I am saying is consider the options, if you go to court and lose I don't think there are anymore options. You've already jumped through the hoops of thier complaints procedure, which seems designed to delay and fob people off IMO. Why not write one more thing - a claim form the FOS. I expect the final responce will be some standard waffle which will not address your specific concerns.

 

You can check your credit file for £2, I would suggest you do this and make the removal of any entry a condition of settling your complaint.

 

Hope this helps.

[jadzia.dax1]

'I have never recieved the reduced overdraft letter and they have not been able to send me a copy. Looking at my bank records the highest I have been in past year is 50% of the agreed overdraft facility'

 

Hi Howard,

 

Don't know if it would help in this situation but I would maybe consider sending a Subject Access Rights Notice request under the Data Protection Act, they do cost you £10.00 but they are great because you get loads of information that you may need at a later date regarding your account, plus it may help you prove the reduced overdraft letter was not sent.

Good luck with all this

 

 

Hi indebtstudent,

 

Thanks for your help, I go & have a talk with the Citizen's advice

[Howard0181]

I had a similar problem recently with AA Credit Card. I paid some money in and it went to the wrong account. I found out the following month that I had a late payment charge to make. After an investigation they gave me back the late payment charge and said that they would place a note on my credit file. 7 Months later I was offered a loan from AA at 4 basis points above the advertised rate due to a problem on my credit file. It turned out that AA had not ammended my credit file.

 

The loss on the loan over 3 years interest would have been £3000. I asked for this amount to be paid to me. After 3 months of letters they offered me £100. I sued for £3000. They did not defend the case and decided to pay me the £3,000.

 

I am not going to mess around with the Ombudsmen. Nationwide will be given a reasonable period to sort there mistake out. I want to go back to the original overdraft or they can reduce it by 25%. They have to take the marker off my credit file.

 

If they do not I will sue for £3000 because they have damaged my credit record.

[indebtstudent]

I suppose the thing going in your favour is that they can't prove you were notified of the reduction since the letters are sent in the ordinary mail.

 

Whilst I agree they should remove any entries made on your credit report I am less sure of any kind of increase to ther overdraft. I have no official info to confirmt his but I believe Nationwide is reducing O/D limits across the board. My own was cut significantly as was that of a family member.

 

I encountered several customers who had had thier O/D's cut by a large sum. The thing is an OD is repayable on demend, even though we all know the country would grind to a halt if there was an attempt to call in all these debts.

 

Whilst there is a change a senoir manager can override the system you may be better off looking elsewhere and just using your flex for the particular features that are of most benefit to you.

 

I see where you are coming from with the AA but we don't know why they didn't defend. It may be because they thought they would lose, it may be because it wasn't worth the expense of defending.

 

Have you checked your credit report recently?

[Howard0181]

I have no problem with Nationwide reducing my overdraft providing they give me the reasonable time period. They gave me no notice and I was forced under duress to make a deal with them which has effected my credit record.

 

The day after after I documented the events in a letter.

 

The AA did not defend and then they decided not have the case set aside. I had lots of evidence to show they made mistakes. Your theory could be correct and not worth the expense.

 

I have not checked my credit report but have been advised by Nationwide on two occasions that my credit file has been marked. I have that documented in my letter.

 

Unless they back down I will sue them.

[indebtstudent]

If only the staff could read then they could punt this sort of thing in front of someone who could sort it out instead of the customer wasting time and effort with thier complaints procedure.

 

Keep us posted anyway, I'm watching this one with interest, I happen to believe three weeks is not sufficient notice even if a person DOES recieve the letter.

 

O/D's are reviewed every six months and they do know if they are going to decrease (at least based on current info).

[Howard0181]

Development!!

 

Just had a letter delivered today and its the letter from Nationwide informing me of my reduced o/d. Nationwide have sent this to my old address!!!! I moved from that house 4 and half years ago. All my bank statements etc etc come to my new address.

 

Interesting mistake. Still no answer from Nationwide. I am going to advise them that they have made a mistake and demand £3000 compensation. If they do not pay then I shall sue them.

[Howard0181]

Reply from Nationwide this morning. Its a very good spin letter saying everything they did is fine. They did say they sent the letter to my old address.

 

They say they have a "robust system in place to ensure members dont over committ". My overdraft during the year has never been above 50%.

 

They also say that my credit score does not reach the required level to enable the o/d to continue. If they have checked my credit file they would have seen that from 1st January 2008 my credit card debt has been reduced by about 85%!! So, thats rubbish.

 

Will respond Monday and will claim £3000 loss as I believe that they have effected my credit rating by their actions. They have now admitted not informing me of the change to my overdraft. They will have 14 days to pay or I sue.

[Diverkev]

Nationwide did exactly the same to me said they had done a review and that I was not crediting sufficient funds to my account to warrant a £3000 overdraft and that it was being removed immediately.

So I checked my account and in the previous 6 months I had credited my account with £37000!!!!!!!!!!!!!!!!!!!!

So I am now proceeding to claim every single penny I can from them and if I can do it I will go back the 20 years I have had the account!!

[indebtstudent]

If the policy hasn't changed I'll eat my hat...

 

Very useful them admitting it, as notifiying you of a change to your overdraft IS something they say they will do.

[rowlesy]

Now this is very interesting. I have today just been told, by automated phone call, that my account is somehow overdrawn and that I am to pay it back immediately! I then check my overdraft, which was £1300 and my account £150 under this, only to find they have reduced it to £1000 without any notice! And I swear that I checked it on Monday and it was still £1300.

 

I've sent them a letter of complaint to see what the hell they are playing at, but am also in the process of opening a student account with Natwest which I should have done three years ago!

 

I suppose I'll get what seems to be the standard response from any company, 'We did nothing wrong, it's all your fault'.

[indebtstudent]

This seems very widespread, if you don't get any joy go to FOS, maybe tell the OFT too. A load of complaints will cause the company maximum difficulty.

[Howard0181]

No offer to settle within 14 days and I have today issued a County Court Summons.

[lulu64uk]

I have recently been a victim of nationwide cutting my O/d without notice - I had a £4k OD that was I only discovered was cut to £2k when I went onto the online banking and thought "what the hell is going on" as I had many bounced DD's - I rang them immediately and they said they had sent a letter ? I am now in an arranged OD for a lesser amount of originally £3400, reducing by £80 per month. Yhey made me make a payment from my Nationwide credit card for £700 to reduce my OD down to £3400, so i am paying interest on that as well as the charges for the bounced items AND I may add, I am an ex branch manager for nationwide, my years of loyalty, working through lunch hours, early morning and late night counts for nothing with them !

 

rant over !

[Surfer01]

How many of us had our overdraft reduced without any notice and then found that several DDs had bounced because we did not receive any notice of their intention to reduced the overdaft? Cost is in the vicinity of £220.

Please feel free to add your username. Just maybe by co-ordinating an attack, we can all hit the FOS at the same time with letters of complaint

 

Surfer01

[Surfer01]

Just to add, we now pay off £50 per month on a £2000 overdraft and have moved all my DDs and SO to another account to avoid charges. We only pay in my wife's wages so f thyey cut it agian unexpectedly at least we can manage. Overdraft is now at £1600 but bank charges are at about £1500.

[lulu64uk]

I would be happy to go for a co-ordinated attack, it has cost me well over £300 in charges, and forced me to up my debt on my Nationwide Credit card, which I was been trying to reduce.

[Surfer01]

If we all took a specific date in the future i.e. in about 4 weeks time and then sent off the complaint to FOS so that they all arrive more or less at the same time, maybe the FOS will investigate. We can only hope!