09 Apr 09 Bank overdraft – our renewal case study

Over the past 20 years in business, we have been fortunate to have very few problems with our bank. Sure, the business has run a small overdraft (and continues to do so) but the value of our shop currently covers the overdraft by a considerable margin. Our credit rating is good – last time I checked with experian, they showed no issues with our account.

Our overdraft was due for renewal by the end of February. Our bank requested a copy of our accounts to arrive at least a full working week prior to that to enable them to check details and put the overdraft in place. We did this – we sent the letter by recorded delivery. As we had heard nothing, before the end of February I phoned and was assured that our overdraft was in place.

March continued uneventfully – although at one point my husband mentioned that we hadn’t been informed about the terms of the overdraft. As we were busy that day, I filed that comment in the back of my “I must remember to…..” brain cell, and we carried on.

Then I had a couple of issues I which I needed to discuss with the bank. I phoned their business banking service and discussed matters satisfactorily. I was about to ring off when the lady said “We haven’t received your signed copy of the overdraft offer. We need it asap.” So I replied that we hadn’t received their offer letter and would she please send another.

This further letter didn’t arrive. However, a form I had requested for another transaction did arrive safely. Hmmm. We then started being charged £25 per cheque transaction because of an unauthorised overdraft. My husband became extremely upset and I phoned again, explaining that their offer letter still had not been received.

The third time of asking, the overdraft offer arrived. I signed it – and enclosed a letter in reply, stating that we were extremely dissatisfied with the service – all other correspondence from the bank arrives correctly at our business address and there are now two copies of an overdraft offer letter floating around our area – I certainly have not received them. I requested that the over-charges be refunded as I did not feel I was responsible for this mess. If the bank did send out the letters which have not been received by me – then the Post Office has some issues of non-delivery.

I phoned the bank again yesterday and was told in no uncertain terms that they were upset at the tone of my letter to them. They said the overdraft had been reinstated and, without further discussion of the issue, proceeded to charge £150 for the new overdraft. That makes £300 plus at least £125 in overdue transaction charges.

I am a member of the Federation of Small Businesses – I have never used their business services, but this is one I shall be pursuing with them. I feel it’s an outrageous way to treat a client.