Year Interest Free Loan Withdrawn

[Arty dinmore]

Hi, hope you can help I opened up a flex account with Nationwide in May and they offered me a £1000 interest free overdraft (which I signed for) for a year. Today I got a letter from them to say that my overdraft has gone down to £250 and from November I will have to pay interest. Are they allowed to just withdraw an agreement?

 

Thanks

[Arty dinmore]

Hi, hope you can help I opened up a flex account with Nationwide in May and they offered me a £1000 interest free overdraft (which I signed for) for a year. Today I got a letter from them to say that my overdraft has gone down to £250 and from November I will have to pay interest. Are they allowed to just withdraw an agreement?

[Andyorch]

Yes ...the facility can be reduced/ withdrawn at any time.

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?155916-Reduced-Overdraft-No-Notice-Nationwide.

 

You should contact them them to see what options are open to you and if in fact you can keep your existing limit.

 

Regards

 

Andy

[BankFodder]

With all respect to Andy, I wonder whether the circumstances of this particular agreement aren't a little different. Overdrafts are normally open ended – but subject to annual reviews (which in my experience is just an opportunity to get you into their office to try and sell you something). According to what you are saying here, the overdraft has been offered to you for a fixed term and on special conditions which presumably have enticed you into signing the agreement.

 

I would like to know more about what you have signed – and also why the nationwide was offering you an interest-free overdraft. Was this directed purely at you or was this an offer to lots of their customers – but whatever, what were the circumstances of it all.

 

Although I expect that in the agreement, the bank reserves the right to call in the overdraft, did they also reserve the right to start charging interest?

 

My instinct tells me that the bank is not behaving fairly and that if they came to see you for the money that you could successfully plead an estoppel – or if you wanted to attack them you could rely on BCOBS.

 

I'm not saying that you should go to these extremes – but you shouldn't necessarily take this lying down. I think that you have a good argument morally and legally to challenge this.

[BankFodder]

Incidentally, I feel that my answer is especially valid for the interest-free part of the overdraft

[Andyorch]

And to add ...was you paying a monthly fee?

[BankFodder]

Also, I think it is very relevant to know whether they approached you with this promotion – or you went to them and asked them for the overdraft because you had need of it.

 

If they approached you with this promotion then I think that this is extremely unfair treatment.

[Arty dinmore]

And to add ...was you paying a monthly fee?

 

Hi, thank you very much for replying. I'm not at home where all my paperwork is until later today, I would like to read the agreement again in order to be completely accurate about it all. But I do know that it was offered to me as a free overdraft facility for a year at no cost whatsoever. According to the terms of that particular flex account I opened up with them. I was also offered an alternative option at the time (May 13th 2014) which was an account that gave extras like phone & holiday insurance, breakdown cover etc. I decided not to take that one because the £1000 overdraft would only be for 3months on the interest free option so I opted for the one year option to give me a longer period of time to use the overdraft & to be in credit within the year.

[Arty dinmore]

Hi, thank you very much for replying. I'm not at home where all my paperwork is until later today, I would like to read the agreement again in order to be completely accurate about it all. But I do know that it was offered to me as a free overdraft facility for a year at no cost whatsoever. According to the terms of that particular flex account I opened up with them. I was also offered an alternative option at the time (May 13th 2014) which was an account that gave extras like phone & holiday insurance, breakdown cover etc. I decided not to take that one because the £1000 overdraft would only be for 3months on the interest free option so I opted for the one year option to give me a longer period of time to use the overdraft & to be in credit within the year.

 

I approached them initially to open up a new account and that was when they offered me an overdraft facility & a credit card at the same time.

[BankFodder]

Hi, thank you very much for replying. I'm not at home where all my paperwork is until later today, I would like to read the agreement again in order to be completely accurate about it all. But I do know that it was offered to me as a free overdraft facility for a year at no cost whatsoever. According to the terms of that particular flex account I opened up with them. I was also offered an alternative option at the time (May 13th 2014) which was an account that gave extras like phone & holiday insurance, breakdown cover etc. I decided not to take that one because the £1000 overdraft would only be for 3months on the interest free option so I opted for the one year option to give me a longer period of time to use the overdraft & to be in credit within the year.

 

By phone, so very brief... but this looks better and better for you

[Klandestine]

You have a FlexDirect account.

 

They're certainly allowed to reduce or totally withdraw the overdraft facility.

 

But in their terms and conditions document I can't see anything in regards to the interest free element of the overdraft which allows them to start charging the standard fees before 12 months has elapsed.

[Arty dinmore]

By phone, so very brief... but this looks better and better for you

 

 

Hi Bankfodder,

 

Excuse the late reply, I've had a family crisis to deal with. Thank you for your reply, I still haven't had chance to go through my paperwork to look at all the small print. However, I have received a letter from the bank informing me that they have a right to lower my overdraft anytime. I will get all the paperwork out Tuesday on my day off and take a good look.

[Nao]

Banks usually review overdrafts annually (as in look for any action they can take to slap you with more interest and fees).

 

They promised you a interest free £1000 overdraft for 12 month, are you certain the offer was for 12 month from account opening with those terms and not 12 month / annual review date whichever comes first?

[Arty dinmore]

Hi Bankfodder,

 

In the agreement it says 5% interest on credit balances up to £2500 for 12 months (if you credit £1000 each month). No daily usage fees on overdrafts for 12 months (for customers eligible for an overdraft).

 

Overdraft facility: £1000

[Arty dinmore]

Hi Bankfodder,

 

I didn't get a reply from you, I'm wondering if you still have any thoughts on the matter?

[BankFodder]

My thoughts on the matter haven't changed at all. I think you have an excellent basis here for a BCOBS action. I think that they are in breach of contract and also they have treated you extremely unfairly.

 

This is a typical unfair commercial practice. In the vernacular it is known as "bait and switch" – meaning that they suck you in with some marketing campaign and then change the rules once they've got you.

 

Have you got the evidence to support your claim. I seem to remember that at some point you said you are going to read over the terms and conditions. Please let us know exactly what you signed and is it clear that you were promised an interest-free overdraft?

 

Is it also clear that you gave up some alternative packaged account in order to take up the interest-free overdraft option?

 

Also, I think that there is a story here – would you be prepared to talk to the press about this?

[Arty dinmore]

My thoughts on the matter haven't changed at all. I think you have an excellent basis here for a BCOBS action. I think that they are in breach of contract and also they have treated you extremely unfairly.

 

This is a typical unfair commercial practice. In the vernacular it is known as "bait and switch" – meaning that they suck you in with some marketing campaign and then change the rules once they've got you.

 

Have you got the evidence to support your claim. I seem to remember that at some point you said you are going to read over the terms and conditions. Please let us know exactly what you signed and is it clear that you were promised an interest-free overdraft?

 

Is it also clear that you gave up some alternative packaged account in order to take up the interest-free overdraft option?

 

Also, I think that there is a story here – would you be prepared to talk to the press about this?

 

Hi Bankfodder,

 

Thank you so much for getting back to me. I'm about to go to work & won't be back until late so I will get all the papers & reply in the morning. But just to say thank you for taking an interest & yes I would be prepared to pursue this & talk to press.

 

Many thanks

[BankFodder]

I think that if you are going to do this then you should not let it drop again. There is a 2 month gap between when you last posted and when you started again this year. I say this only because it is difficult for the people advising you here to sustain interest when they find themselves in mid-air.