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.


Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Suggested Topics
Arts and Entertainment
Under the skin: Sarah Kane in May 1998
theatreThe story behind a new season of Sarah Kane plays
Arts and Entertainment
Preening: Johnny Depp in 'Mortdecai'
filmMortdecai becomes actor's fifth consecutive box office bomb
Bradford City's reward for their memorable win over Chelsea is a trip to face either Sunderland or Fulham (Getty)
Lars Andersen took up archery in his mid thirties
Focus E15 Mothers led a protest to highlight the lack of affordable housing in London
voicesLondon’s housing crisis amounts to an abuse of human rights, says Grace Dent
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Client Services Manager - Relationship Management - London

    £30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...

    Recruitment Genius: Credit Controller / Customer Service

    £18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...

    Guru Careers: In-House / Internal Recruiter

    £25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...

    Recruitment Genius: Tax Assistant

    Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

    Day In a Page

    Woman who was sent to three Nazi death camps describes how she escaped the gas chamber

    Auschwitz liberation 70th anniversary

    Woman sent to three Nazi death camps describes surviving gas chamber
    DSK, Dodo the Pimp, and the Carlton Hotel

    The inside track on France's trial of the year

    Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
    As provocative now as they ever were

    Sarah Kane season

    Why her plays are as provocative now as when they were written
    Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

    Murder of Japanese hostage has grim echoes of another killing

    Japanese mood was against what was seen as irresponsible trips to a vicious war zone
    Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

    Celebrities call on David Cameron to take more Syrian refugees

    One young mother tells of torture by Assad regime
    The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

    The enemy within

    People who hear voices in their heads are being encouraged to talk back
    'In Auschwitz you got used to anything'

    'In Auschwitz you got used to anything'

    Survivors of the Nazi concentration camp remember its horror, 70 years on
    Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

    Autumn/winter menswear 2015

    The uniforms that make up modern life come to the fore
    'I'm gay, and plan to fight military homophobia'

    'I'm gay, and plan to fight military homophobia'

    Army general planning to come out
    Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

    What the six wise men told Tony Blair

    Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
    25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

    25 years of The Independent on Sunday

    The stories, the writers and the changes over the last quarter of a century
    Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

    Homeless Veterans appeal

    As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
    Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

    Smash hit go under the hammer

    It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
    Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

    The geeks who rocked the world

    A new documentary looks back at origins of the computer-games industry
    Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

    Belle & Sebastian is taking a new direction

    Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea