£19 million overdraft bonus for Lloyds TSB
December 12, 2006
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The financial pundits all predicted it would happen and it seems that they were right. When the Office of Fair Trading capped credit card penalty charges at £12 earlier this year, there were many predictions that the banks would find another way to make money from their customers. And with the OFT planning to turn the spotlight on unauthorised overdraft charges banks had to move fast to make sure they got their profits in. So it’s not surprising that there’s been a flurry of activity on overdrafts within the banking sector, with Lloyds TSB in particular hitting the headlines for some of its actions.
Earlier this year the bank removed the £10 buffer which allowed customers to go overdrawn by up to that amount without incurring a penalty charge. The bank also removed the goodwill gesture of waiving one unauthorised overdraft charge a year. Meanwhile, monthly fees on its premier bank account have been hiked from £15 to £25 a year with effect from January.
Lloyds TSB’s latest move with regard to overdrafts has been to raise the interest rate on authorised overdrafts for the second time in three months, just in time to affect customers seeking a little more financial flexibility at Christmas. The rate has moved from 15.5 per cent EAR to 18.3 per cent EAR so Christmas splurgers will feel the pinch of the increased charges in the New Year.
With Lloyds TSB holding a quarter of the UK’s current account market, this move will affect millions of consumers, with 2.7 million of their customers being regularly overdrawn. Price comparison site USwitch estimates that this change will add £19.32 to the profit line next year.
Some of the other major banks have also increased their overdraft fees once and it is feared that this move by Lloyds TSB could mean the start of a flood of increased charges for bank customers. Meanwhile, there are still choices for customers who are unwilling to pay the increase in the form of current accounts with an introductory 0 per cent rate on overdrafts.
Written by Peter Kenny · Filed Under Banking Savings
This stinks! My 19 year-old student-son while travelling abroad inadvertently overdrew his account to the tune of 89p. He was stung with a £30 penalty.
So this is how Lloyds TSB makes its “record profits”. I’m not impressed.
Lloyds TSB I call on you to cut out this unjustified nonsense and reimburse all those customers you have trampled on in this way. I will encourage my son to make application.
When exactly did they remove the £10 buffer zone?
I am fuming with Lloyds tsb.
I have gone through sending the letter, asking them to reimburse all the charges they have made to my account, and they have refused. i have tried FOS, but they are not taking on any more complaints.
I don`t know what to do..
I am a single parent of one, i had to give up my job just before christmas last year due to my mother having treatment of breast cancer, so she could not look after my daughter whilst i worked. so i am now on income support till my mother is completely well.
Lloyds claim to do all they can to help when you have gone overdrawn, but they don`t!
i went over my overdraft limit by 10p 2 months ago, then they sent me a letter saying i wasn`t to be charged, if i stayed at that amount, but if it went anymore over that limit i would be charged. well.. it did, because they charged me the overdraft interest, so it took me up to £7 over drawn, then i was charged another 10p interest by them, which in total cost me £90 charges for that month.
a similar thing happened the month before and i was charged £60.
i have struggled repeatedly in the last 6 months to try to get myself out of debt, but with lloyds doing this to me, i have no hope.
my income is on average around 58 pounds a week, and with this i have to pay gas,electric,water,loan,t.v. lisence,rent,credit cards (which are now cut up).
all i ask is for lloyds to reimburse my account with the total of £450.
that would set me up with something to fall back on, and i wouldn`t struggle so much.
PLEASE CAN ANYONE HELP ME??