Should banks authorise debit card transactions when there is insufficient funds in your account to cover the transaction?

59 replies
Found 2nd Jun 2009
as per title.

Long story, but I'm MAD.

I was always under the impression that if you had insufficient funds in your account, a debit card transaction would DECLINE. I'm now £1.92 OVER my overdraft and gonna get charged £35 for the privilege. Surely it should have declined? (Halifax btw)

No trolls please...

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59 Comments

I thought an overdraft was an amout they let you be in debt without charging you an extortionate rate, and if you go over that then they hit you with the higher charges.

Think of it the other way around, what if you made a transaction and it failed because it hit the overdraft limit.... say your electricity bill, which then got disconnected because of the missed payment. Wouldn't you be mad that they didn't approve the transaction and let you pay it back?

I would have thought it would, sounds logical,but they must be after robbing you for some charges.

Babbabooey;5380104

I thought an overdraft was an amout they let you be in debt without … I thought an overdraft was an amout they let you be in debt without charging you an extortionate rate, and if you go over that then they hit you with the higher charges.


over the overdraft

Use of a debit card is limited to the existing funds in the account to which it is linked (except cases of offline payments), thereby preventing the consumer from racking up debt as a result of its use, or being charged interest, late fees, or fees exclusive to credit cards.

I would contact your bank regarding this. Don't lose your rag, be very polite and I bet they will waive the fee as this is the first time it has happened.

What do you think the overdraft is for?

If you want it to decline when you have insufficient funds - ask them to. If your under 18 (and as such you can't have an overdraft) it does that automatically.

Further to my last post, I have now found this...

"# Some banks are now charging over-limit fees or non-sufficient funds fees based upon pre-authorizations, and even attempted but refused transactions by the merchant (some of which may not even be known by the client).
# Many merchants mistakenly believe that amounts owed can be "taken" from a customer's account after a debit card (or number) has been presented, without agreement as to date, payee name, amount and currency, thus causing penalty fees for overdrafts, over-the-limit, amounts not available causing further rejections or overdrafts, and rejected transactions by some banks."

I think it should, be declined. thats better than the £35 quid charge though! You would think with all these people claiming back bank charges they would lower them, it's a complete rip off :roll:

Original Poster

Jakg;5380119

What do you think the overdraft is for?If you want it to decline when you … What do you think the overdraft is for?If you want it to decline when you have insufficient funds - ask them to. If your under 18 (and as such you can't have an overdraft) it does that automatically.



OVER the overdraft.

Please read the OP.

I prefer to think that customers should manage their account correctly to stay within their limits. But hey I'm old fashioned that way.

flowers172;5380108

over the overdraft



??

Original Poster

munnski;5380128

I think it should, I know Llyods with a standing order, my cousin was 77p … I think it should, I know Llyods with a standing order, my cousin was 77p ( yes pence! ) and they declined it! It might have been better than the £35 quid charge though! You would think with all these people claiming back bank charges they would lower them, it's a complete rip off :roll:



Yeah, that's what I thought....

Unless there's a "grace" buffer that they'll authorise yet still not charge the fee. Stupid thing is, I have plenty of money in another account with them, but came out with the wrong card. Used it on the off chance there was money in it.

It would help if we knew which bank it was.

Jakg;5380119

What do you think the overdraft is for?If you want it to decline when you … What do you think the overdraft is for?If you want it to decline when you have insufficient funds - ask them to. If your under 18 (and as such you can't have an overdraft) it does that automatically.



actually i've had a debit card for which i was overdrawn before i was 18. I was also under the impression that if the transaction goes through i must have the money in my account.
I was charged £35 a day, and only knew about it 3 days after, when i received a letter from the bank. So i had to pay about £140.

I asked them to remove the ovedraft feature on my account and they said they couldn't.

Bloody Bankers.

Original Poster

funny.onion;5380161

It would help if we knew which bank it was.



Sorry boss, Halifax

this happened to me with lloyds tsb i was over like 10p and they charged me £35

grex9101;5380160

Yeah, that's what I thought....Unless there's a "grace" buffer that … Yeah, that's what I thought....Unless there's a "grace" buffer that they'll authorise yet still not charge the fee. Stupid thing is, I have plenty of money in another account with them, but came out with the wrong card. Used it on the off chance there was money in it.



Give them a phone up and just say to them you used the wrong card and didn't realise until afterwards. Just try and be nice on the phone and ask if the charge could be 'waivered' since this is a first for you and you have money in another account with them. Sometimes your lucky and they will do this for you ( I have had it done ) If one person says no ask to speak to a manager or supervisor. You can only try! :thumbsup:

Why don't you phone them and explain the situation - it is just automatic that you will get charged for going over your limit, if it's only £1.92 then give them a call and see what they say - they should let you off if it's the first time

TSB did this to me for bring 32p overdrawn, i argued with them and they would not move - then i asked them for the form to fill out to claim these unecassry charges back and all of a sudden they changed their mind and remove the charge.

Worth having a go

Hi Grex, it will let you go over your overdraft and as you found out you will be charged, if you have a basic bank account with no overdraft then the transaction will be declined but if its a DD or standing order then they charge you for declining the transaction, ridiculous, if its the first time it has happened or if it hasnt happened before for a long time then call them or go into the bank and complain, they should waive it, happened to my mum a few months ago, first time ever, she was nearly in tears and they refunded her, it was actually NPowers fault for increasing her DD without telling her, give them a bell,

I've had a look on their site, halifax.co.uk/ban…asp

Scroll down to the account fees.

I would phone them and ask them to waive the charge.

Original Poster

Ooops, my mistake:

direct.gov.uk/en/…158

Tells you here that debit cards don't automatically get checked (unless it's solo or electron) and thus I'm screwed.

If there’s anything you don’t understand or can’t find, phone us on 08457 20 30 40 between 8am and 8pm, seven days a week.

I would still phone and say that it's a bit steep for a first time offence!

£35 or £20 if you are a student is a lot of money.

I've had a couple of charges waived by just phoning up and being nice.

ok, I grovelled!

Original Poster

funny.onion;5380242

If there’s anything you don’t understand or can’t find, phone us on 08457 … If there’s anything you don’t understand or can’t find, phone us on 08457 20 30 40 between 8am and 8pm, seven days a week.



lol. I don't understand how paying out £1.92 can cost £35.

(well, I do really - banks are scum!!!)

Thanks for all the help guys! Will call them, but ultimately looks like I'll need to swallow it :x

hey grex:)

my bank is the same Alliance and leicester,and they can be a nightmare.....
if money goes in the same day that money goes out - they take all the monies out first and then charge me if its overdrawn, even before they put the credit in!!!

bad times:x

All payments have a floor limit so to speak, your payment probably slipped under this amount so the balance won't even have been checked. Another way this can happen is that if you had say £50 in your account and then went in one shop and spent £49.99 it might check the balance and OK it but it wouldn't immediately come off, so if you then went in another shop and spent the same it would slip through. That said though, as you've only gone such a piddly amount over your limit I would definitely get in touch with your bank as suggested above but BE POLITE and you might get your charges back, be shirty and you'll have no chance!!

Original Poster

Charlie Scene;5380272

hey grex:)my bank is the same Alliance and leicester,and they can be a … hey grex:)my bank is the same Alliance and leicester,and they can be a nightmare.....if money goes in the same day that money goes out - they take all the monies out first and then charge me if its overdrawn, even before they put the credit in!!!bad times:x



Man, that sucks :x


I seriously wouldn't have a bank account unless I had to, but it's pretty difficult in this day and age.

Well it is worth a try to get them to waive it. If not then I found this amusing letter for you...

This is allegedly an actual letter sent to a bank in the United States. The bank thought it amusing enough to publish in the New York Times.

Dear Sir:

I am writing to thank you for bouncing the check with which I endeavored to pay my plumber last month. By my calculations, some three nanoseconds must have elapsed between his presenting the check, and the arrival in my account of the funds needed to honor it. I refer, of course, to the automatic monthly deposit of my entire salary, an arrangement which, I admit, has only been in place for eight years. You are to be commended for seizing that brief window of opportunity, and also for debiting my account with $50 by way of penalty for the inconvenience I caused to your bank.

My thankfulness springs from the manner in which this incident has caused me to rethink my errant financial ways. You have set me on the path of fiscal righteousness. No more will our relationship be blighted by these unpleasant incidents, for I am restructuring my affairs in 2001, taking as my model the procedures, attitudes and conduct of your very bank. I can think of no greater compliment, and I know you will be excited and proud to hear it.

To this end, please be advised about the following changes: I have noticed that whereas I personally attend to your telephone calls and letters, when I try to contact you I am confronted by the impersonal, ever-changing, pre recorded, faceless machine. From now on I, like you, choose only to deal with a flesh-and-blood person. My mortgage and loan repayments will, therefore and hereafter, no longer be automatic, but will arrive at your bank, by check, addressed personally and confidentially to an employee of your branch whom you must nominate. You will be aware that it is an offense under the Postal Act for any other person to open such an envelope.

Please find attached an Application Contact Status which I require your chosen employee to complete. I am sorry it runs to eight pages, but in order that I know as much about him or her as your bank knows about me, there is no alternative. Please note that all copies of his or her medical history must be countersigned by a Notary Public, and that the mandatory details of his/her financial situation (income, debts, assets and liabilities) must be accompanied by documented proof.

In due course I will issue your employee with a PIN number which he/she must quote in all dealings with me. I regret that it cannot be shorter than 28 digits but, again, I have modeled it on the number of button presses required to access my account balance on your phone bank service. As they say, imitation is the sincerest form of flattery.

Let me level the playing field even further by introducing you to my new telephone system, which you will notice, is very much like yours. My Authorized Contact at your bank, the only person with whom I will have any dealings, may call me at any time and will be answered by an automated voice.

Press buttons as follows:


1. To make an appointment to see me.


2. To query a missing repayment.


3. To transfer the call! to my living room in case I am there.


4. To transfer the call to my bedroom in case I am sleeping.


5. To transfer the call to my toilet in case I am attending to nature.


6. To transfer the call to my mobile phone in case I am not at home.


7. To leave a message on my computer. To leave a message, a password to access my computer is required. Password will be communicated at a later date to the contact.


8. To return to the main menu and listen carefully to options 1 through 9.


9. To make a general complaint or inquiry. The contact will then be put on hold, pending the attention of my automated answering service. While this may on occasion involve a lengthy wait, uplifting music will play for the duration. This month I've chosen a refrain from "The Best of Woody Guthrie:


"Oh, the banks are made of marble,
With a guard at every door,
And the vaults are filled with silver,
That the miners sweated for."

After twenty minutes of that, our mutual contact will probably know it by heart.

On a more serious note, we come to the matter of cost. As your bank has often pointed out, the ongoing drive for greater efficiency comes at a cost which you have always been quick to pass on to me. Let me repay your kindness by passing some costs back. First, there is the matter of advertising material you send me. This I will read for a fee of $20 per page. Inquiries from your nominated contact will be billed at $5 per minute of my time spent in response. Any debits to my account, as, for example, in the matter of the penalty for the dishonored check, will be passed back to you. My new phone service runs at 75 cents a minute. You would be well advised to keep your inquiries brief and to the point. Regrettably, but again following your example, I must also levy an establishment fee to cover the setting up of this new arrangement.

May I wish you a happy, if ever-so-slightly less prosperous, New Year?

Your humble client,

[ Name withheld ]

Draw a picture for them instead of payment...


http://www.geekologie.com/2008/11/13/spider-2.jpg

Original Poster

tinkerbell28;5380299

Yeah I was going to say unless it's an electron you are screwed, as it … Yeah I was going to say unless it's an electron you are screwed, as it should not of gone through if it were an electron. They don't check a full visa debit as it is a more "credit worthy card" hence why electrons can take an age sometimes whilst they contact your bank, think Ryanair :roll:



Will phone them up once the letter comes through.

If they say no, I'm gonna steal all their free pens!!! :-D

(I'm allowed to sell pens in bulk on the fs/ft board, right? :))

its happened to me before and it wasnt even up to 5 hours that i realised i was less than £1 overdrawn i transferred some money into that account asap but it was too late and i was charged £22 i think, barclays total rip off :roll:

Banned

My bank (first Direct) gives me a free £200 overdraft.

Luckily I've always got loads and loads of my in my account, so never need to use it. :w00t:

grex9101;5380326

Will phone them up once the letter comes through.If they say no, I'm … Will phone them up once the letter comes through.If they say no, I'm gonna steal all their free pens!!! :-D(I'm allowed to sell pens in bulk on the fs/ft board, right? :))



Also have a pooh in their foyer at night when the bank is closed:-D (my ex used to work for Lloyds and some people were actually caught on CCTV doing it:-D:-D)

Original Poster

ilovelilac;5380343

its happened to me before and it wasnt even up to 5 hours that i realised … its happened to me before and it wasnt even up to 5 hours that i realised i was less than £1 overdrawn i transferred some money into that account asap but it was too late and i was charged £22 i think, barclays total rip off :roll:



Better than £35, scoundrels!!!

guv;5380345

My bank (first Direct) gives me a free £200 overdraft.Luckily I've always … My bank (first Direct) gives me a free £200 overdraft.Luckily I've always got loads and loads of my in my account, so never need to use it. :w00t:



Bet you've got a merc and a beemer too, and you've recently won an mc'ing contest

funny.onion;5380256

I would still phone and say that it's a bit steep for a first time … I would still phone and say that it's a bit steep for a first time offence!£35 or £20 if you are a student is a lot of money.I've had a couple of charges waived by just phoning up and being nice.ok, I grovelled!



mine was about christmas time i called them up, costing me on my mobile contract and asked them to reverse the charge twas my 1st time and all and they didnt :x

Original Poster

clondikemike;5380357

Also have a pooh in their foyer at night when the bank is closed:-D (my … Also have a pooh in their foyer at night when the bank is closed:-D (my ex used to work for Lloyds and some people were actually caught on CCTV doing it:-D:-D)



Hmmmmm, DNA is bad :x

Original Poster

ilovelilac;5380360

mine was about christmas time i called them up, costing me on my mobile … mine was about christmas time i called them up, costing me on my mobile contract and asked them to reverse the charge twas my 1st time and all and they didnt :x



At Christmas time too? Heartless bar stewards!!!

Maybe they'll see I'm poor and take pity on me :-D

Banned

grex9101;5380359

Bet you've got a merc and a beemer too, and you've recently won an mc'ing … Bet you've got a merc and a beemer too, and you've recently won an mc'ing contest



I thought it was someone else that was stalking me! :w00t:

babbaboey...........lmfao hilarious:thumbsup:

moneysavingexpert.com/rec…ges

That site has a template to download to claim your charges back.

"The core argument is that banks should only impose charges which are in proportion to their costs. This is because under the Unfair Terms in Consumer Contract Regulations the charge should not exceed the cost to the provider.

Yet go beyond your overdraft limit or have a cheque or direct debit payment bounce and the banks charge up to £39 a time – even if you’re only £1 over the limit. Yet all it has to do is send a computer-generated automatic letter with a franked stamp. A report by a professor of banking estimated this costed only between £2.50 and £4.50. And this was being generous."
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