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Spend & Save

James Daley: A little detail with big implications

No sooner had I finished writing about the bad practice amongst most of Britain's banks last week, than I came across yet another piece of trickery that I feel is worth sharing with you.

About a year ago, HSBC introduced something called its "Fair Fees Policy" – a seemingly transparent system, which ensured customers would not be penalised for accidentally busting their overdraft limit, as long as they didn't do it more than once every six months.

Under this policy, overdraft requests are deemed to be either formal (whereby you ask for a new overdraft, or an increase in your limit) or informal (where you bust your agreed limit accidentally).

Every customer is allowed one free overdraft request – formal or informal – every six months. Beyond that, however, you are charged at £25 a go.

I was a big supporter of this policy because, firstly, it gave customers a bit of leeway for accidental error and, secondly, it was easy to understand. Most importantly, it treated customers fairly.

What most people – including myself – failed to spot in the small print of the Fair Fees Policy, however, was that under this new system, customers would also be subject to an annual overdraft review – which, conveniently for the bank, would count as a formal overdraft request.

Therefore, any customer that now goes overdrawn within six months of their "review" will get fined – regardless of whether they've made another formal or informal overdraft request in the near past.

I've had the same size overdraft with HSBC for almost 10 years, and have never had, or felt the need, for an "annual review". Ultimately, I know that if my bank believes I have deteriorated as a credit risk, they will try to rein in my limit. They have computer systems in place which automatically highlight customers who are sailing a bit close to the wind – and these render any kind of annual review pointless.

I'd bet the interest on my HSBC current account (not very much, admittedly) that these "annual reviews" don't actually exist. For customers like me, whose affairs are in relatively good order, the "review" will simply involve dispatching an automated letter, informing me that I'm allowed to keep my current overdraft limit. After all, why would the bank wait until the annual review to rein in a customer who was becoming a dangerous credit risk?

From the bank's perspective, annual reviews are simply the perfect excuse to mark an overdraft request on your file – so that if you slip up over the next six months, you'll have to pay them their £25 charge.

A spokesman from the bank reassured me that customers are only in danger during the first six months after their review. The good news is that if you bust your limit in the following six months, you'll be back to zero on your overdraft request tally.

This only makes the whole policy even more perverse: bust your overdraft limit between January and June and you'll be charged, but bust it between July and December and you won't. Why not introduce fines for customers who use their debit cards on Tuesdays in April? It would make as much sense.

Talking of scams, I've found myself targeted by another crafty little trick over the past few weeks. If you get a missed call from an unrecognised number on your phone – are you one of those people who can't resist calling it back? Don't!

I've had a series of missed calls in recent weeks from numbers beginning 070, which look like regular mobile numbers. In fact, these are personal forwarding numbers and can cost several pounds a minute to call back from a mobile. Fraudsters have been deliberating calling random mobile numbers from these services, and then quickly hanging up, hoping they'll get a call back.

If you don't recognise the number on a missed call, forget it. If it was something important, surely they would have left a message.