I have a HSBC plus account with an agreed overdraft limit. This morning I awoke to find a letter from HSBC saying that they have conducted an annual review of my overdraft facility and it will be staying at the same limit for the next 12 months. 'Fair enough' I thought until I read that it has just cost me £25 for them to do that!

So I called HSBC and spoke to a nice lady in a call centre. I asked what justified the fee and was told it was admin and costs of sending the letter out. The letter is a generic one and the cost of sending it first class totals up to about no more than one pound. That means that the £24 left has gone into the vast admin work it has taken to review my overdraft. I can just see it now. Mr HSBC is sat in his office, types in my account number and says "ummm, lets review Mr *****'s overdraft." A few clicks off the mouse and it's sorted.

You see I'm not bitter and if the charge was justified then I'd be happy to pay it. But it's not. I know the simple answer is not to have an overdraft but sometimes however careful you are with money an unexpected bill could arise which simply needs paying. The banks just seem to want to look after people at the other end of the pay scale and take advantage of everyone else.

Anyway moan over thanks for listening. Writing this has made me feel alot better!!

coney - It's another typical example of a excessive unfair charge they are simply profiteering from this action, if you consider how many customers will have received the same basic but cheap letter and resultant charge this morning, that's one hell of a lot of profit. !

You should ring and speak to a supervisor / manager and tell them this charge is grossly disproportianate and excessive to what it has actually cost them to produce, when all their admin charges have been combined into the equation plus postage charges.

Demand in a polite but assertive manner that they credit your account immediately with at least £20 if not the full £25 for the inconvenience; because there is no way you, anyone or indeed the Financial ombudsman would in fairness believe it has cost them more than £5 to produce and post this basic generic letter...and that £5 is being over generous IMO.

If they won't play fair then put your complaint in writing telling them that after eight weeks if the complaint is still unresolved, you then intend to complain to the FOS about the unfair excessive charges they have levied against you for this simple basic letter, the FOS complaint costs the bank.

This is the only way the greedy big institutions will learn, when they realise that fleecing customers is actually counter-productive and actually starts to cost them money.... when enough people do complain until that day arrives, they're very much on the "Gravy Train" just like the M.P.'s. ...thank you very nicely. !

http://www.financial-ombudsman.org.uk/consumer/complaints.htm

I must disagree with your comments about these companies fleecing customers. It is quite legitimate for a business to review its credit lines annually and charge for such a review, this is common practice in the commercial banking market and will become more prevalant in personal banking as customers can no longer expect to receive a completely free service from banks.

The personal banking market has been completely free to the vast majority of customers being subsidised by income banks earn in commerical markets, interest rates etc. With these income streams being hit heavily as a result of the recession the banks have to look at ways of recovering income and one of the ways to do this is to remove the concessions it offers personal customers.

When the OFT case into unfair bank charges is complete I forecast the end of free banking in the UK (one of the few free banking countries left) as the banks can no longer afford to offer an expensive service to customers completely free of charge particularly when this has historically been subsidised by 'unfair' bank charges on those who cannot manage their accounts.

I think the problem is the vast majority of people do not understand the very complex nature of banking revenue and are quick to make assupmtions that something is unjust simply because it is costing them money. The fact of the matter is the bank is providing a service to that customer and in providing said service they should be expected to pay. It is simple market forces of supply and demand. We have for far too long been used to easy access to credit and competition among banks has meant that the cost of this has been pushed down, in retail banking to an almost unprofitable level, and the recent financial turmoil has re-adjusted the market to a more balanced level.

With regards to your 'fine' I think you will find this is a renewal fee, one he doesn't have to pay if he doesn't want the overdraft, he is simply paying for a service the bank is providing and one which the FOS would agree is fully justifiable to charge. This would not have been without notice and would have given him fair warning and time to make alternative arrangements.

With regards this particular bank if you read any financial press you would realise it has required no Government or taxpayer bailouts and has indeed faired particulary well amongst its peers in the last 12 months. As well as posting a profit, yes PROFIT, last year of over $10bn.

gavftm - With regards to your 'fine' I think you will find this is a renewal fee, one he doesn't have to pay if he doesn't want the overdraft, he is simply paying for a service the bank is providing and one which the FOS would agree is fully justifiable to charge. This would not have been without notice and would have given him fair warning and time to make alternative arrangements.

Hi gavftm - Certainly that is not the impression this Police officer gives in his initial post, in fact he sounds very surprised to find he is being "fined" £25 for the privilege of this letters arrival when he rang the call centre and quote," was told it was admin and costs of sending the letter out"....I guess we will have to await his further clarification or testimony. !

I refer to banks in general not this company specifically, when referring to the banks receiving bailouts from the taxpayer. !

gavftm:

With regards to your 'fine' I think you will find this is a renewal fee,

I puzzled by this thread. There doesn't seem to be any reference to a review (or renewal) fee in either the HSBC Overdraft Service details or the Charges leaflet. Perhaps something else occurred.

Jalexa NOTHING else has occurred. I simply had a overdraft with HSBC and they wanted to charge to £25.00 to renew it for another year. I have sinced moved banks and my current account is now with Barclays. When I informed HSBC they wanted to close my account they stated that the £25.00 fee would be cancelled if I stayed with them. I have chosen not to.

Conmankiller, thanks for your kind words I appreciate it.

With regards to understanding 'banking revenue', what is complex about reviewing an overdraft? Nothing. The bank may be providing a service but it is my money and millions of others that make it function. Sometimes the bank forgets that.....

coney:

I don't do rants so I'm not commenting on your behaviour but on HSBCs. Either the charge, whether reasonable or unreasonable, (totally unreasonable I agree) is allowed by the HSBC terms and conditions or its not. On my reading there is no provision in the HSBC charging leaflet for the charge. If that is the case it's not just unfair but illegal and any customer should demand an explanation by way of complaint and if not satisfied involve the Financial Ombudsman Service.

I was kinda hoping that someone would be able to clarify that actually the charge is mentioned in the HSBC charges leaflet and yes, HSBC s*cks.