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  1. #1
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    Default Lloyds Scraps Unauthorised O/D Fees

    BBC
    Lloyds Bank to abolish charges for unplanned overdrafts.

    Fees for unplanned overdrafts are to be scrapped for the 20 million customers of Lloyds Banking Group, which includes the Halifax and Bank of Scotland.
    From November this year, any customer going over their overdraft limit will face no fees at all, Lloyds said.

    However, the bank may continue to block payments from the account until the overdraft is paid off.

    It follows criticism of high charges by consumer groups and the Competition and Markets Authority (CMA).

    The Financial Conduct Authority (FCA) is also expected to propose measures on overdraft fees within the next few weeks, as part of its inquiry into high-cost credit.

    Previously Lloyds customers taking out unauthorised overdrafts faced interest payments at an annual rate of 19.89%, a daily charge of up to £10, the monthly charge of £6, and up to £30 a day for returned (unpaid) items. These will all now be abolished. Fees for missed payments from basic bank accounts will also disappear.

    Lloyds said that it expected to make less money as a result of the changes, although it said fewer people now use an unauthorised facility than used to be the case.

    As well as scrapping charges for unplanned overdrafts, Lloyds is also simplifying fees for planned overdrafts, making it cheaper for many customers to borrow.
    Those with overdrafts of less than £500 are likely to pay less, while those borrowing more than £1000 are likely to see higher charges.

    Barclays has already abolished unauthorised lending. Since June 2014, customers cannot exceed their overdraft limit, unless they obtain permission for emergency lending.

    Anyone who takes out an authorised overdraft with Lloyds Banking Group - in other words the bank has agreed to it - is currently charged a £6 monthly fee, on top of interest at 19.89% a year.

    While the £6 fee will be dropped, the interest charge will rise sharply, to 68.4% on an annual basis. Lloyds said that amounts to 1p a day for every £7 borrowed.

    As a result nine out of 10 customers will either be better off, or see no difference, it said. However, the changes will not make Lloyds the cheapest lender on the market.

    Andrew Hagger, personal finance expert with Moneycomms, said there were at least eight banks providing lower cost overdrafts.

    The move by Lloyds to abolish unauthorised borrowing fees was welcomed by consumer groups. "Lloyds' decision to do away with these fees is a positive step, and its proposed simpler pricing will benefit many of its customers," said Peter Vicary-Smith, Which? chief executive. "However, not everyone will be better off, so it's critical that Lloyds supports customers to help them avoid high charges and to reduce their level of debt." The FCA should encourage other banks to follow suit, he added.

    As part of its inquiry into current accounts, the CMA ruled last year that banks should introduce a maximum monthly charge - set by each bank - by the end of September 2017.

    Lloyds is due to introduce a maximum monthly charge of £95 for unauthorised overdrafts in August, although this will be superseded by the changes in November.

    RBS and NatWest will introduce a £90 maximum on 24 July.

    HSBC is to remove interest charges on most unarranged overdrafts, but will still charge a £5 daily fee, up to a maximum of £80 a month.
    http://www.bbc.co.uk/news/business-40555175




    The Times
    Britain’s biggest high street lender is to slash the costs of its overdrafts after widespread criticism of lenders’ rates.

    Lloyds is abolishing all fees on unplanned overdrafts in a move that it hopes will avoid sanctions by the financial regulator while heading off competition from new lenders.

    For customers with arranged overdrafts, Lloyds will replace several levels of fees plus interest with a daily charge of 1p per £7 of overdraft.
    The change, which will take effect in November, will affect 20 million customers whose accounts are with Lloyds and its other brands, Bank of Scotland and Halifax, making up a quarter of the market. Nine out of ten customers will be better off, Lloyds said.

    The shift by the bank may put pressure on rivals to follow suit, particularly as they face scrutiny by the Financial Conduct Authority over current accounts. The watchdog said last year that it would focus on whether overdrafts constituted high-cost credit. It will report its findings this summer.

    But observers pointed out that while Lloyds is simplifying its charges, it amounts to a high sum when calculated as an annual percentage rate.

    Dominic Lindley, a consumer campaigner, said: “1p per day per £7 of overdraft might sound little, it is actually equivalent to an effective annual interest rate of around 60 per cent. Overall, this means that arranged overdrafts at Lloyds cost around three times what they did prior to the financial crisis.”

    In 2007 overdrafts at Lloyds cost 19.3 per cent. Lloyds believes its new system is fairer because most customers who dip into their overdraft only do so for a few days at the end of the month, so calculating the charge on an annual basis is misleading.

    A customer with a Lloyds Classic Account who goes overdrawn by £100 within the planned limit for ten days will pay £1.40. Previously, they would have been charged £6.38, the bank said.

    Lloyds is also scrapping a range of charges that are unpopular with customers, including the £5 or £10 daily fee it levies on unplanned overdrafts, which is in addition to 19.89 per cent interest. For planned overdrafts, Lloyds now charges 19.89 per cent on amounts that are more than £25 in the red. The bank also levies fees when a customer’s direct debits cannot be paid because they are in overdraft. Those charges will be dropped.

    Unplanned overdrafts can be particularly expensive. Which?, the consumer group, calculated that fees could be almost eight times more than the cost of payday loans.

    About a fifth of current account holders have unarranged overdrafts, which generated £1.2 billion of revenue for banks in 2014, according to the Competition and Markets Authority.

    Lloyds’ move is likely to stir fresh controversy about overdrafts. Banks have argued that they have to charge high fees in order to cope with the administrative costs and financial risk of people going into debt in unpredictable ways. Lloyds will sacrifice significant income from the change but has priced its new offer so that it can continue to make a profit.
    https://www.thetimes.co.uk/edition/n...ions-n8t5tftpb
    Well, she's walking through the clouds, with a circus mind that's running wild
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  2. #2
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    Default Re: Lloyds Scraps Unauthorised O/D Fees

    The Financial Conduct Authority (FCA) is also expected to propose measures on overdraft fees within the next few weeks, as part of its inquiry into high-cost credit.
    Well they are taking their time about it.

    Good on Lloyds.

    With the new simple, single rate, a Lloyds Bank customer with the Classic current account who goes overdrawn by £100 within their planned limit for 10 days, will pay £1.40. Previously, they would have been charged £6.38.

    Quote Originally Posted by Lloyds
    LLOYDS BANKING GROUP LAUNCHES NEW APPROACH TO OVERDRAFTS
    12 July 2017

    All customers will pay a simple daily rate with no additional fees and charges

    Charges based on how much customers borrow and for how long

    All fees and charges associated with unplanned overdrafts will be removed

    Customers will be sent free text alerts to help them stay in control of their finances

    Lloyds Banking Group is today announcing a simplification of overdrafts for its personal current account customers. The new approach will be simple, clear and will give customers more control of their overdraft borrowing.

    We understand that, across the banking sector, overdrafts can be complex and confusing for customers. Lloyds Banking Group has listened to customer feedback and is announcing changes to make overdrafts simple and clear from November 2017. More than 9 in 10 personal current account customers of Lloyds Bank, Bank of Scotland and Halifax will be either better off or unaffected financially by the changes.

    The Group has over 3 million basic bank accounts in products that charge a fee for missed payments*. These fees will be removed from all basic bank accounts in November.

    Key features include:

    From November, there will be a simple, single rate of 1p per day for every £7 of planned overdraft usage, clearly linking the amount charged to the amount and period of borrowing

    All fees and charges associated with unplanned overdrafts will be removed

    No more additional overdraft fees for missed payments, so customers will no longer be charged a returned item fee for having payments stopped due to lack of funds

    A daily fee will be charged at the end of each day of planned overdraft usage, avoiding cumulative fees being charged weeks later, helping customers to budget

    Customers who have given their mobile number to the Bank will automatically receive free text alerts, including low balance alerts, putting them in control of their budget

    What this means in practice

    With the new simple, single rate, a Lloyds Bank customer with the Classic current account who goes overdrawn by £100 within their planned limit for 10 days, will pay £1.40. Previously, they would have been charged £6.38.

    A Halifax customer with a Reward current account, who goes overdrawn by £100 up to their planned limit of £100 for ten days, and is also unplanned by £50 for two of those days, will pay £1.40. Previously they would have been charged £18.00

    Across the industry banks also allow some customers to temporarily access an unplanned overdraft, for example when a budgeting error means there would be insufficient funds to clear a direct debit. At the moment, a customer who goes beyond their limit would typically face charges for being in an unplanned position. In future they will face no such charges. Additionally, in situations where an unplanned overdraft isn’t authorised and a payment is stopped, there will be no returned item fees.

    The average debit balance for a Lloyds Banking Group customer using their overdraft is typically around £450 a month.

    Vim Maru, Group Director, Customer Products & Marketing, Lloyds Banking Group, said: “This new approach is simple and clear, giving customers more control of their overdraft borrowing and how they manage their finances. When asked about our new approach, over 80% of customers said that they preferred it compared to the current charging format.”

    Support for customers

    Lloyds Bank, Halifax and Bank of Scotland will write to all customers at least two months before the new overdraft approach comes into effect to clearly set out the changes. The letter will provide support material to help customers understand how this will impact them based on their circumstances and additional guidance to help customers through the transition.

    There are a number of ways in which the Bank already supports customers to manage their finances and provides them with appropriate borrowing options based on their individual needs. This is one of the reasons why customers are already making less use of overdrafts.

    To build on this existing support, the Bank will write individually to the small proportion of customers who have higher overdrafts, and will pay higher fees. They will be provided with additional support during the transition to the new approach and, where necessary, there will be a tailored transition plan for customers to ensure they are prepared. This may include a review of the options available, such as a personal loan, which may better meet their underlying borrowing needs.

    The new approach to overdrafts comes into effect from November this year.

    Mike O’Connor, Chief Executive, StepChange Debt Charity said: “We welcome a new approach that makes the cost of overdraft borrowing more transparent and removes unplanned overdraft and returned item fees. Around half our clients have struggled with overdraft debt so we are pleased to see a specific focus on helping borrowers with larger overdrafts to stay in control of their finances. This looks a positive step forward, but there is a need to monitor what happens next, not least for the questions this announcement poses for the overdraft market as a whole.”
    “We may not win by protesting, but if we don’t protest we will lose. If we stand up to them, there is always a chance we will win.” Hetty Bower

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    Default Re: Lloyds Scraps Unauthorised O/D Fees

    I'm just thinking back to the reasoning of the Supreme Court judgment saying that banks couldn't offer bank accounts without charging unauthorized overdraft charges lol.
    Well, she's walking through the clouds, with a circus mind that's running wild
    butterflies and zebras, and moonbeams and fairy tales
    that's all she ever thinks about
    riding with the wind.

    When I'm sad, she comes to me, with a thousand smiles she gives to me free
    it's alright, she says it's alright, take anything you want from me
    anything.

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    Default Re: Lloyds Scraps Unauthorised O/D Fees

    Lord Phillips also noted that in the absence of the charges the banks would not be able
    profitably to provide current account services without a fee
    https://www.supremecourt.uk/cases/do...ss-summary.pdf
    Well, she's walking through the clouds, with a circus mind that's running wild
    butterflies and zebras, and moonbeams and fairy tales
    that's all she ever thinks about
    riding with the wind.

    When I'm sad, she comes to me, with a thousand smiles she gives to me free
    it's alright, she says it's alright, take anything you want from me
    anything.

    Fly on little wing.

    Jimi Hendrix



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    Default Re: Lloyds Scraps Unauthorised O/D Fees



    “We may not win by protesting, but if we don’t protest we will lose. If we stand up to them, there is always a chance we will win.” Hetty Bower

    Any advice I provide is given without liability, if you are unsure please seek professional legal guidance.

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    Default Re: Lloyds Scraps Unauthorised O/D Fees

    I can't work out the difference between being in unauthorised OD and authorised OD (it's early !) Just that items are likely to bounce rather than be paid ? No returned item fees though, and if a payment is let through and you go to unauth. the fee is still 1p per £7 per day ( 68% apr) ? The charge list pic seems to say that anyway although not sure how it still comes out at £1.40 if 2 days would have been 7p ish charge?

    Transparency.... lol
    “We may not win by protesting, but if we don’t protest we will lose. If we stand up to them, there is always a chance we will win.” Hetty Bower

    Any advice I provide is given without liability, if you are unsure please seek professional legal guidance.

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    Default Re: Lloyds Scraps Unauthorised O/D Fees

    Quote Originally Posted by Amethyst View Post
    I can't work out the difference between being in unauthorised OD and authorised OD (it's early !) Just that items are likely to bounce rather than be paid ? No returned item fees though, and if a payment is let through and you go to unauth. the fee is still 1p per £7 per day ( 68% apr) ?
    You're not alone.

    We asked this exact question to Lloyds Banking Group when writing the story, and it confirmed that the 1p per £7 charge will not apply to unarranged overdrafts. If you could confirm where you've heard otherwise, I'll look into it again.

    Thanks,
    MSE Rosie
    http://forums.moneysavingexpert.com/...1#post72826072
    Well, she's walking through the clouds, with a circus mind that's running wild
    butterflies and zebras, and moonbeams and fairy tales
    that's all she ever thinks about
    riding with the wind.

    When I'm sad, she comes to me, with a thousand smiles she gives to me free
    it's alright, she says it's alright, take anything you want from me
    anything.

    Fly on little wing.

    Jimi Hendrix



  8. #8
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    Default Re: Lloyds Scraps Unauthorised O/D Fees

    Lloyds Press Release is pretty clear
    All fees and charges associated with unplanned overdrafts will be removed
    I guess there is the possibility ( though they should say!) that they are just stopping any unplanned OD - we don't have guaranteed cheques now and there's no reason debit card payments can't be stopped at source if no funds and direct debits bounced, and SO's just not attempted....

    It's weird because their example of a £50 unplanned OD for two days AND 10 days in £100 planned OD ( so £150 for 2 days) is £1.40 - the same as 10 days planned £100 OD £1.40.

    so either unplanned OD's are free ..... ( in which case cancel your planned OD's now lol ) ... or Lloyds are just stopping unplanned OD's happening ?
    “We may not win by protesting, but if we don’t protest we will lose. If we stand up to them, there is always a chance we will win.” Hetty Bower

    Any advice I provide is given without liability, if you are unsure please seek professional legal guidance.

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    Default Re: Lloyds Scraps Unauthorised O/D Fees

    This seems to say the same....

    That box on the right says 5 days planned and 2 days unplanned ( but remember those 2 days include the planned as well so is actually an extra £50 OD for those two days )

    Attached Thumbnails Attached Thumbnails 2017-07-12 15_02_17-Start.jpg  
    “We may not win by protesting, but if we don’t protest we will lose. If we stand up to them, there is always a chance we will win.” Hetty Bower

    Any advice I provide is given without liability, if you are unsure please seek professional legal guidance.

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    Default Re: Lloyds Scraps Unauthorised O/D Fees

    All fees and charges associated with unplanned overdrafts will be removed
    Indeed but like someone on that thread said it also says:

    All customers will pay a simple daily rate with no additional fees and charges
    It might be that because all overdrafts will be have to be 'authorised' the daily rate will apply.

    Fancy tweeting them? Mind you they probably won't know lol.
    Well, she's walking through the clouds, with a circus mind that's running wild
    butterflies and zebras, and moonbeams and fairy tales
    that's all she ever thinks about
    riding with the wind.

    When I'm sad, she comes to me, with a thousand smiles she gives to me free
    it's alright, she says it's alright, take anything you want from me
    anything.

    Fly on little wing.

    Jimi Hendrix



  11. #11
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    Default Re: Lloyds Scraps Unauthorised O/D Fees

    Case study 4 -
    £1000 planned borrowing for 7 days, including 2 days of £50 unplanned
    borrowing


    Tracey is a Halifax customer with a Reward current account, who has used £1000 of her
    £1000 planned overdraft limit for 5 days. A payment from her account also took her into an
    unplanned overdraft. She has gone £50 pounds into her unplanned overdraft for 2
    days.

    In
    all, she has been overdrawn for 7 days. She has also had 1 direct debit payment stopped
    due to insufficient funds when her unplanned overdraft was not extended further.
    She has a fee-
    free buffer of £50 and pays £1 per day for any amount of planned overdraft
    borrowing below £2,000.
    She also pays a flat daily fee of £5 for her unplanned borrowing. Her account does not
    charge returned item fees.
    The total cost of this borrowing under the current approach would be £15.
    With the new approach,
    Tracey will pay a single rate of 1p per day for every £7 of borrowing
    with no other fees or charges. Although she has unplanned borrowing, there are now no
    additional charges for this. Therefore the cost of this borrowing will be £9.94.

    If Tracey’s mobile
    number is registered with the Bank, she would have received a text alert
    notifying her that she had insufficient funds. At this point, she could apply to extend her
    planned limit, or transfer money from another account, to prevent the payment being
    stopped. She would also receive a letter informing her that the payment hasn’t been made.
    “We may not win by protesting, but if we don’t protest we will lose. If we stand up to them, there is always a chance we will win.” Hetty Bower

    Any advice I provide is given without liability, if you are unsure please seek professional legal guidance.

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    Default Re: Lloyds Scraps Unauthorised O/D Fees

    It actually is free to go over your overdraft limit. No interest / charges / fees / 7ps per £1's - just completely free. lol.

    7 days of 7p per £1 on £1000 is £9.94

    That £50 extra on two days ( of those 7) is ignored completely,

    Weird and freaky.

    All their examples and tables etc do show the same.
    http://www.lloydsbankinggroup.com/gl...overdrafts.pdf
    “We may not win by protesting, but if we don’t protest we will lose. If we stand up to them, there is always a chance we will win.” Hetty Bower

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    Default Re: Lloyds Scraps Unauthorised O/D Fees

    Maybe the headline should be Lloyds Scraps Unauthorised Overdrafts.

    ( bit difficult to do a BIG FULL STOP lol)

    I can't work out my log in over there atm or I'd point them at that £1000 example one.
    “We may not win by protesting, but if we don’t protest we will lose. If we stand up to them, there is always a chance we will win.” Hetty Bower

    Any advice I provide is given without liability, if you are unsure please seek professional legal guidance.

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    Default Re: Lloyds Scraps Unauthorised O/D Fees

    Quote Originally Posted by Amethyst View Post
    It actually is free to go over your overdraft limit. No interest / charges / fees / 7ps per £1's - just completely free. lol.

    7 days of 7p per £1 on £1000 is £9.94

    That £50 extra on two days ( of those 7) is ignored completely,

    Weird and freaky.

    All their examples and tables etc do show the same.
    http://www.lloydsbankinggroup.com/gl...overdrafts.pdf
    If you're right they'll probably just refuse payments that take you into unauthorised overdraft.

    What do you reckon @leclerc ?
    Well, she's walking through the clouds, with a circus mind that's running wild
    butterflies and zebras, and moonbeams and fairy tales
    that's all she ever thinks about
    riding with the wind.

    When I'm sad, she comes to me, with a thousand smiles she gives to me free
    it's alright, she says it's alright, take anything you want from me
    anything.

    Fly on little wing.

    Jimi Hendrix



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    Default Re: Lloyds Scraps Unauthorised O/D Fees

    I don't think thats beyond the pail. My Lloyds account has never let me into unplanned OD. I've had one or two bounced DD charges when I've cocked up, but it's never let a debit card transaction, DD, SO or anything go through leaving me under £0. Be nice not to have those bounced DD charges anymore anyway.

    It USED to be that some lower value debit card transactions just stashed up on the shop unit and they put them through on a wednesday or something, meaning you could still use your card if you were over and get away with it.... that hasn't happened for years though.

    Ha remember this from 2010


    looks like Lloyds are just opting everyone out regardless lol.
    “We may not win by protesting, but if we don’t protest we will lose. If we stand up to them, there is always a chance we will win.” Hetty Bower

    Any advice I provide is given without liability, if you are unsure please seek professional legal guidance.

    Find Solicitors offering fixed fees on our sister site - JustBeagle.com

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