Tuesday, 30 March 2010

"Dear" banks

What do you think of bank charges?

I had a horrible money-losing experience with bank charges since the beginning of this year. Due to a cheque that bounced end of last year.
You see, I have two accounts with this bank but I don't exactly use them as they are too basic. One of them was the first account that I opened in the UK so I wanted to keep it due to the long personal history (Lesson: it is business I shouldn't be personal). I put odds and ends in there and have some direct debits from ages ago ... Mostly magazine subscriptions to be honest. Let's call this, account number 1.

Now, account number 2 was opened a year and half ago. This was an attempt to upgrade account 1. I was hoping to bank with this institution again as the other one that I use on a regular basis is becoming off putting with their services. But again, I was given the most basic account of them all so I didn't really see the point of using account number 2 either.

One happy day last year I wrote a cheque for a magazine. Instead of writing from account 1, I mistakenly wrote from the cheque book of account 2. I use cheques like... twice a year. Bam! Cheque bounced but magazine still came regularly so I didn't really realized that a cheque had bounced. It turns out I have a direct debit w/the magazine but they had sent me the cheque notification as well... by mistake?! Why do people keep making these silly mistakes? You see, if the cheque didn't bounce, I would be getting two copies of this magazine monthly.  I wish that had happened.

Anyway 2 months+ on from that bounced cheque, I still hadn't noticed it 'til one sunny morning they called me to say I had charges. I went online to check... And went bonkers! For some reason it had gone from bounced £35 cheque to almost 200£ overdraft (worth of charges!).

So apparently this bank charges you a £20 maintenance fee a month if you went overdraft. For any amount. On top of that there was a 30£ charge for ... (don't remember what to be honest). Probably for them having to call me? And of course there were interests accumulated on that "overdraft", which to be honest is interest on the charges they imposed. You see, interest on interest is what bankers, retail or investment, love! Are you still following me?

That interest as I found out yesterday was around 20%.

I understand my personal mistakes in monitoring of my accounts. And I deserve to be charged for bad management but it surely doesn't cost £20 to maintain an account per month? Neither do I deserve an interest on top of  that monthly charge?!

So I talked to them and explained the situation I was in... They replied that they could only wave the £30 "penalty fee". I had to put in the remaining (almost £200) to bring my account up to date! Imagining losing £200 for a stupid mistake?! So I paid up. Blaming no one but myself. After I bought the account back to order, I contemplated closing the accounts... A few days later I moved all remaining amount from account 2 to account 1 (I had put in over £200 just in case). And then life happens, sometimes you forget to do non-life-threatening things.

A month later on a random check, account 2 has gone in arrears by £20.59. I went "huh"? I cleared everything?" So I called them up and was explained that there was still interest charge of -59p on my account from the month of February?! I asked "Didn't I pay off everything already?". The adviser kindly said "No. But if you pay in the £21 then I will waive the charge as goodwill. 59p is a small amount".

Two days later and the £25 I put in only has £4 something left. I thought "wait a minute, shouldn't I be given back the £20 charge that as been waived on that 59p?". So I called again, and guess what I was told "No. You have been waived the £20 charge for the month of April!" Wtf!!! It isn't even April yet! I was seriously confused.

So I went on a rant. Believe me I gave them a piece of my mind. Not swearing. But just tell them that none of these charges was making sense if it was nothing I had done. I have relatively good financial knowledge and I had worked at a retail bank when I was at uni. So I understand it is a business and there is cost involved. But this was just utterly unfair. They claimed that I had overdrawn 59p. No I did not!!! They had charge me interest for I don't know what, then charge me another fee for "being overdrawned" and could have kept charging me (even in advance for April) even though I had bought the account up to date in March!

Frankly the lady on the land must have thought "shit. This really doesn't make sense". But she was a good employee and stuck to her ground. Kept explaining but made little sense. I kinda understand how it works for them as my accounting professor used to say "always consolidate your account". But I was in no mood to be have money taken away from me again. And so unfairly. I demanded to get my money March charge back. Even if it was just £20. After an hour, I won.

I apologized for raising my voice at her. It wasn't her fault. It was the retail banking system that has been put in place. Made no sense whatsoever with their charges. Charging people for being irresponsible is ok. But that charge should level with the amount. It does not cost you £20 if people overdraw say £1. And in this case, it hadn't even been overdrawning. They overdrawn on me!

I started thinking about other people who may not have much money monthly and are only making ends meet. Had they not been qualified for an overdraft and somehow they are overdrawn even just £1 or £2 every month, they will keep having to pay interest on that. And they probably don't know it because they use it so regularly. I prob wouldn't notice anything had I it been my normal account. It's scary that we actually don't really know what goes in and out of our account. Even if we think we do.

Now I'm off to investigate on my more regularly-used accounts!
Sent from my BlackBerry® wireless device


  1. What a story! Glad it ended well - that you won, sis. But this is alarming... Where did the 59p come from? How could they make it up and told you that you did something which you didn't do?
    I wouldn't understand a single thing when it comes to the banking system - what is what, why it's there, etc.. :-s and would have been a really tasty prey...

  2. Yeah I think most people become prey to charges because there is nothing they can do.

    The 59p, as I was told, came from interest-incurred for the month of February?! Made no sense at all as I had paid all their fines then. Why would there still be interest? On what? Puzzling.