'Banks never want you to repay an overdraft'

[Legal Beagles]

Britons owe a record £1,300bn. Who is to blame? Here is the story of one borrower, single parent Lisa Costello, and her bank's response.

More...

[Nattie]

Re: 'Banks never want you to repay an overdraft'

The person in this story I know very well. A diamond and I will not reveal her identity but she was good to me

[iancognito]

Re: 'Banks never want you to repay an overdraft'

But can you answer the questions Nattie?

[Guest]

Re: 'Banks never want you to repay an overdraft'

I would suggest that Daily Telegraph blew her cover when they printed her name Nattie. Are you protecting her username on a site she is no longer active on and if so, why?

[Nattie]

Re: 'Banks never want you to repay an overdraft'

THe answer is yes to cet and no to ian(well I would say that bit wouldn't i )

[biscuits]

Re: 'Banks never want you to repay an overdraft'

She is indeed a lovely lady and i am pleased to be able to call her a friend

[Amethyst]

Re: 'Banks never want you to repay an overdraft'

Yeyy glad this finally got in print....hopefully she feels that getting her story published and the issues highlighted her fight will have been worth it.


Story in full.

'Banks never want you to repay an overdraft'


Last Updated: 1:36am GMT 06/11/2007


Britons owe a record £1,300bn and rising numbers are struggling to maintain payments on their debts. This week, the Council of Mortgage Lenders forecast that house repossessions will jump by 50 per cent next year, prompting accusations of irresponsible lending and borrowing. Who is to blame? Here is the story of one borrower, single parent Lisa Costello, and her bank's response
Lisa Costello: 'the
law must be applied
to the banks'We've all heard the banks say that they are fair and transparent. We are also told that the Data Protection Act was established, among other things, to ensure that our data is processed in the correct manner. In my experience I've found the banks to be anything but fair and transparent, and the Act to offer no protection or remedy when banks behave unfairly.
I discovered my overdraft facility increased twice in four days. My overdraft facility had previously increased to limits such as £6,500. My borrowings had been consolidated into loans three times in less than three years, causing more than £1,000 of interest to be charged on interest that had already been charged on borrowings.
Before I knew it, I was borrowing almost the maximum amount I could. I don't recall being asked whether I wanted the increases or even being notified of them. When I asked Natwest for the correspondence, it seemed it no longer existed.
It was in July 2006 when my bank manager informed me that an "auto upgrade process" had been applied to my data and had generated an increase in my overdraft facility. I raised a Data Protection Act "subject access request" for information relating to my accounts and for "the logic involved in the decision-taking of processing by automatic means of personal data".
Now, I have never been on the breadline, nor neglected my responsibility to pay my debts. However, I have, in the past, naïvely trusted that Natwest would have considered my welfare and ability to repay debts when lending me money. The bank was fully aware I am a single parent and of my income.
When cash is available, it is easy to spend it. While being financially responsible I became socially irresponsible, putting myself and my daughter in situations that I never would have normally done in order to increase income and decrease outgoings. I would like to know how Natwest decided how I could repay the borrowings it set for me.
I believe Natwest never had any intention to calculate how I would repay my debts, only how it could maximise my affordable debt and keep it at such a level to maximise its own profits.
I believe that while taking into account my income and expenses, the logic used in Natwest’s automated systems in increasing overdraft facilities is based on the ability to maintain an overdraft rather than to repay it.
This is, in my view, irresponsible and I believe that Natwest has engineered the level of debt I had using this kind of logic in its processes. This would mean Natwest was processing my data in a manner which caused me damage and distress, and this is a breach of the Data Protection Act.
By January 2007, five months after my request, Natwest had not provided the detail I required and the court, in the bank’s absence, ordered that it should explain the logic behind all automated decision-taking made on my account. Later that month, I received a letter from Natwest stating that this information was a trade secret.
The bank provided no response to the court. In February 2007, a second hearing was held, to which Natwest sent a barrister. While the judge was fully aware of the letter I had received, stating that Natwest considered the information to be a trade secret, a further order was given that Natwest should provide me with a response to the previous order, along with other information not sent to me after my subject access request.
As Natwest had not fully complied with this second order, I wrote to the Information Commissioner’s Office for their help in June 2007.
In August 2007, I received some statements about my loan account, more than 11 months after requesting them, but none of the details of the automated processes of increasing my overdraft facility that I sought.
The Information Commissioner’s Office upheld Natwest’s contention that this information is a trade secret, even though the court has twice ordered that it be given to me.
I have neither the knowledge nor the resources to continue my fight for this information and have asked the courts to consider closing the case. I don’t believe I will ever find out how Natwest decided on my levels of borrowing. I feel the bank and the legislation regulating its conduct have failed me. This information would be of great public interest and I feel I have failed others by ceasing my fight.
I agree with Chancellor Alistair Darling that we should return to traditional banking and that banks should stop lending so freely. I for one would like to see them reprimanded for their irresponsibility and neglect for the law set out to protect us, their customers.
The law must be applied to the banks in the same manner as it would to me and you. No one should be able to escape their responsibilities under the law by stating they will behave better in future.
Luckily, I have now been able to manage my debt and related problems with the help of my friends, relatives and colleagues, to whom I am enormously grateful.
If only I had been required to sit with my bank manager and discuss my borrowings in a manner that was responsible and normal just a few years ago, each and every time an increase in overdraft was considered necessary, I would be able to thank Natwest, too. As it is, I am disgusted with its behaviour and have lost trust in banks completely.
Bank's reply
A spokesman for Natwest said: "Part of our service is to respond to the changing financial needs of our customers.
"So, when a customer is nearing their overdraft limit, we may write to them offering an extension so that they avoid unarranged borrowing on their account. Such offers are only made following an assessment of the individual's financial circumstances.
"This is a common practice within the banking industry and one which customers find most convenient. The vast majority of our customers appreciate this approach. "Before an offer is made customers must first satisfy the bank's strict lending criteria, which includes assessing their ability to repay. It is in the interests of both the customer and the bank that any further borrowing is manageable.
"We write to the customer giving advance notice of the facility, allowing them to make an informed decision as to whether they wish to take advantage of further borrowing. "If the customer does not want the overdraft, they can tell us and we will cancel the limit to be applied. They can also decline to receive any future offers. Customers can contact the bank at any time to discuss their overdraft limit."