Lloyds TSB up to its old tricks
I don't mean the big banking tricks (which led them into more or less public ownership). I mean the old tricks of quite outrageous charges for minor misdemeanors -- a punishment out of all proportion to the crime committed.The kind of charges out of which they no doubt imagine they will crawl back into solvency.
Last week, when the son was away in France, a letter arrived from Lloyds bank. Now, mothers are not supposed to open their children's mail, but most mothers can tell a nasty letter from the bank without even opening it.
Which I did.
This letter said that the son had gone overdrawn by £4.35. The penalty for this was an instant unplanned overdraft fee of £15, plus a fee of £4 a day, up to a maximum of 10 fees per month. (This is a special knock down rate from the £15 that you would be charged if you were over £25 overdrawn.)
As the son was away for ten days, if I had not opened it, he would have built up a charge of £55 for an overdraft of £4.35.
Well, you might say, he should not have gone overdrawn. True enough (although usury -- which is surely what this is -- is a moral crime).But there are two more factors which to be taken into account here. First, all his transaction were done electronically. Lloyds could have stopped them (and it's hard not to think that they allow unauthorised overdrafts in order to charge heftily for them later).
But the son had also rung up the Lloyds telephone banking service on his way to France where he was going) to check what his available balance was -- and had kept well within that. Quite who made the mistake is unclear, but it was not necessarily the son.
Ok for us, this wasn't a tragedy. I intercepted the nasty letter and we paid enough cash into the account to cover it. But we are lucky -- and that wouldn't have been such an easy option for many. Can £55 really be a reasonable charge for a £4.35 overdraft for a few days?