UK Bank Charges Student £800 ($1600) for Going 8p Overdrawn

by Michael Ross
Posted by Hannah on 21 July 2008
UK Bank Charges Student $1600 for Going 16 Cents Overdrawn

A student has been charged £800 in fees by her bank after her current account went overdrawn by just eight pence.

A student from Gloucestershire has been charged more than £800 in bank fees and interest payments after going overdrawn by eight pence.

Laura Gibson, from Cheltenham, was charged daily fees of £20 and a monthly overdraft fee of £15 by Lloyds TSB after straying over her set limit by eight pence.

The 20-year-old student who is enrolled at Gloucestershire College was initially charged £20 a week for going overdrawn but when she way unable to pay this fee and her debts increased to over £100 the charges were increased to £20 a day.

Miss Gibson has paid £300 in charges to the bank so far, but still owes over £500. With her account £515.38 overdrawn as of July 1st, due to the charges this increased from £180.97 just two months earlier.

She told the Daily Mail: "I can't cope with it. The bank staff can see I'm not in a situation to pay yet they carry on telling me I have to or they will take me to court.

"They didn't contact me saying I had gone overdrawn. They just keep putting more and more charges on your account. The first charge was in the region of £80 but it goes up and up the more you go overdrawn."

Update on this story...

Since we posted this story, Lloyds TSB have responded.

A Lloyds TSB spokeswoman said: “The charges are not for a one-off unplanned overdraft position of 8p, they relate to an unplanned overdraft of varying amounts dating back to September 2007.

“In light of new information that Miss Gibson did not share with us when she contacted us to discuss her finances, we will be contacting her again to discuss her personal circumstances.”

Source: Daily Express

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Your Comments

on 5 Jun 2009 10:39
Banks are forced upon us to make it easy for the world, and easier for us, i think that they have forgotten that we are the customer, they have become scum, the real low life of the world! They really prey on the lower earnings and take as much as the can!
on 4 May 2009 22:06
llyods TSB are charging me £75 for being overdrawn by 66 pence I was only overdrawn by that for a few days so now I am writing a letter to head office to ask them not to charge me after all I have my account for 21 years! daylight robbery!!!!!
on 13 Feb 2009 18:21
lloyds tsb are doing same to me i think they are stealing our money is for 2012 games
Scott B
on 3 Feb 2009 18:40
Oy. Yes, she should have watched her account not been overdrawn in the first place. Being skint is not an excuse. Yes, the bank is being avaricious, uncaring and rude -- what did you expect? However, I have noticed that even banks tend to respond well when approached reasonably. One cannot expect a thief to react in your best interest when you call them names create a confrontation. Treat people with respect even if they are not respectable -- then you at least have the benefit of high moral ground. Cheers.
Phil Hanrahan
on 7 Jan 2009 14:48
Thats terrible, and whats even worse banks are still doing this, i bank with lloydstsb went overdrawn for 1 day and got charged £105.00, and yet its tax payers money bailing greedy banks out!
on 21 Nov 2008 20:50
I ve Been Charged by Barclays Arounnd £530 for going £20 Overdrawn in the period from April 2008 to October 2008 to and still going and adding up on to the negative balance. I am also a student studying in sheffield and i have never been informed by the bank of these charges. The only thing was that i lost accesses from their internet banking as they required new security system. They never sent me any appratus or security check machine. ive estimated around they have charged me roughly 2500% which is around 4500% a year on the actual amount i owed them and which i have cleared now. i wrote them and asked for a refund they say waiti for the result of the test case going on and are keep on addding on to the engative balance making it even more huge. The Whole negative balance is the fees and charges of the banks. Who knows they may take it to £50,000000 but as i know that they should maximum charge me no more then cost to lend me 20 pounds. The banks should be punished
Scott Daily
on 12 Nov 2008 15:14
Lloyds just charged me £195 for being £30 overdrawn for 9 days! They didn't contact me, just charged me. When I attended my local Lloyds TSB branch and asked them why they allow me to electronically withdraw money I don't have, they gave me some wishy washy answer. I had to probe a little further to discover that an account can be "marked" so that it never goes over its set overdraft limit. The bank manager did not willingly volunteer this information. I recorded the entire conversation. Then, he tried to discourage me from going down this path, tell me that marking my account (capping it so it doesn't go over the overdraft limit) would adversely effect my credit rating! I have a complaint in at the moment about this. All accounts should be "marked" or "capped" by default. Banks should make customers fully aware of this facility. People's credit ratings' should not be affected if they have an account "marked". I'm going to charge Lloyds £800 for an unplanned bail-out package.
on 27 Sep 2008 11:51
Nothing in my contract about unplanned overdraft....but today i get a letter saying i am by 26p.....6 quid a day fee...15 a month. someones going to pay...and sadly it looks like me. crumby system we live in.
on 22 Jul 2008 23:11
While bank fees can be excessive, come on, people. Students need to learn how to spend wisely. I graduated from college a year ago. Know how many times I overdrafted my B of A account? TWO. And they reduced my fees b/c I didn't do it more than once a year. Banks will work with you most of the time if you aren't dumb about it. And I don't buy ANYONE'S story who says "Gee, I didn't notice the per day and per week fees that they were assessing my PRIMARY CHECKING ACCOUNT until it got to $500." Seriously? Do we not have the ability to check our account balances? I check mine once a day online. If it's your only account, and you spend out of it every day, then balance the darn thing! Banks aren't my best friend or anything (I had to deal with credit card fraud through mine that was a real pain in the a**), but most of this is almost guaranteed to be the account holder's fault. It's called personal responsibility, and we can't blame the big, bad businesses every time we blow it.
on 22 Jul 2008 16:49
Banks banks & banks and the new world order that's what cripples the economy by excessive charges -- what they don't realize the young students are the furture, help them when they are most needed - but Jose Perez you need to educate you little sis. let her make her own coffee.
on 22 Jul 2008 12:47
This exact thing happened with me with BANK OF AMERICA". They screwed me out of $600. I thought I had closed the account, and they kept charging me without notification... I didn't even have an overdraft at first... They ended up taking my money from the account to apply to their visa fees, and then "overdraft protection" kicked in. That's when the vicious cycle began.
on 22 Jul 2008 07:50
the same thing happened to me except it was 30 cents and only 500 dollars
Jose Perez
on 22 Jul 2008 06:36
This is common in the US. The US govt took away the rights of the individual states to protect the consumer from the banks. My sister was charged more than $1700 US because she was over drawn on her ATM card. Every time my sister purchased a Starbucks coffee, breakfast or other thing the bank did not decline her ATM card and instead charged her $34 US. Image paying $40 US for a coffee. I had to write my sister a check for $2000 to help her cover the bank fees. The Attorney General in California said his dept could not help because of the new federal dept in charge (Comptroller of the Currency). They decline to help saying my complaint forms were not signed correctly. Just more govt corruption. The bank manager said they were just helping by imposing the $1700 fee. This is just class warfare. The corporation screwing the middle class. I see you people across the pond have the same problem.
on 22 Jul 2008 06:28
I just love how banks will make sure they take their overdraft fee's before even considering covering a check. The fee's along can cause what would be a good check to bounce..
on 22 Jul 2008 04:51
One time I got an overdraft because I went out to dinner and the AUTHORIZATION showed up twice. I've seen these glitches from time to time, and I'm pretty sure it doesnt have anything to do with the merchant running the card twice or antyhing stupid like that. Eventually it disappeared, proving that I was never in fact overdrawn, but did that stop Wells Fargo from charging me $25? Even after repeated inquiries via phone, email and in person they refused to reverse the fraudalent fee. Excessive or unfair is one thing, but banks can get away with plain straight-up theft.
on 22 Jul 2008 04:18
@Billy Yank, Your argument is a load of crap. I have heard the same thing from bank tellers when I overdrafted when I was young and stupid. The banks aren't worried about "catching hell" for not letting customers overdraft. I have heard the argument that they do it for your convienience many times. If that is the case, why is it not an option to opt-out of that feature? If banks are really worried about "catching hell" and keeping the customers happy, wouldn't giving the customer the choice be the best option? Well, for them it is not the best option, because the bank is not concerned with catching hell or keeping you happy, they are concerned with lining their pockets, just like every other big business, only thing is, this practice preys on those who do not have much money to begin with.
on 22 Jul 2008 02:47
Banks have worked out a million ways to fleece their customers. Credit Unions are honest. Get yourself into a credit union!
on 22 Jul 2008 00:02
Banks are notorious for this crap. What they do for credit cards is when they go to process the cards, they always process the charges from largest to smallest. So if you went out on the town, then after that paid your rent, they would process the rent first, because it is a larger credit. Then they can get you on multiple NSF fees for the little stuff, even though your rent is what caused the account to go under. Then if you look at your statement, they will always re-arrange everything to make it look as if you paid in order from largest to smallest on every "batch". So when you go to the bank to complain, all they tell you is "Well I can see that you charged multiple things to your account after it was overdrafted" Which was not the case. They need to make this illegal, credit cards are processed instantly, so why not apply the charges to your account instantly? It is simple, they DON'T WANT you to manage your finances. They need to make overdraft protection optional when you signup
on 21 Jul 2008 23:58
The biggest crooks in the world are BANKS!!!!! Or rather, who owns the banks!!!
on 21 Jul 2008 23:48
This happened to me once. US Bank started adding fees to my account until it's current total of $1625.00. I didnt have the money to cover it at the time and they refused to close the account with a negative balance. I was $4.50 overdrawn when I went in the day of the overdraft to ask them to close the account. They refused, but closed it 6 months later with the $1625 Balance. I have yet to pay it as I am trying to figure out how to get the balance down. It does happen. Yup, I could have paid it, but I didnt have the money and no one to borrow it from. With a daily charge, a weekly charge and the extras they throw in, it grew faster than I could even imagine, until of course they closed it with a - $1625 balance, which is what they said in the beginning they couldnt do...It is all about making money. Just like many many situations, they will take what they can get, they dont care. Unfortunate, but very true.
on 21 Jul 2008 22:05
I think we can agree that late chargers make sense. We can also agree that this is excessive charging and that is what the article is about. She overdrew a small amount, didn't have enough to pay the late fees and continued to be charged... there needs to be something to protect people, especially students from that. I agree, let it go to court (but I doubt that she has the money for that).
on 21 Jul 2008 21:05
Banks *want* customers to make mistakes.
on 21 Jul 2008 20:18
Gotta love crapitalism, steals from the poor and gives it to the rich!
on 21 Jul 2008 20:11
My friend had a similar relationship with her bank. She signed up for a gym who broke the contract and charged her $15/day instead of per week, needless to say the gym got a big *censored* when they inquired about their money (they actually tried taking her to court, lol, all we had to do was say "what did you charge me? what were you supposed to? case closed, kthxbye"), and the bank wants their $240. ($20 per charge for lack of funds) Bank seriously need governing, it's ridiculous the kind of loopholes that exist. It's just ridiculous.
on 21 Jul 2008 19:37
I use TD banknorth, and when my account gets overdrawn and I immediately get hit with a $90 overdraft charge, plus an additional $10 a day after that, i think. Sometimes calling and complaining will resolve it if you word it correctly, but that isnt very reliable. What ever happened to the days when if you dont have enough cash in your account, you get declined?! A lot of people honestly dont even realize they are out of money when making a purchase.
Billy Yank
on 21 Jul 2008 19:16
I worked for a bank so I can tell you this happens all the time. Perhaps she should have just monitered her account. It wasn't just 8p. There's that fee and she keeps charging and there's a fee on that and so on and so on. Know what we hear in the banks? If we don't allow people to overdraft their account we catch hell for it because they can't get their fast food. If we allow you to overdraft but charge you a fee for it--as, at that point, we're essentially loaning you the bank's money--we catch hell for it. The fees are all listed all the time--mailers, web site, at the branches--no one pays attention. Fact is when this happens its almost always the fault of the individual overdrawing their account. Are some of the fees excessive? Sure. But whose fault is it you got them in the first place? Even before I worked for a bank I never had one fee. Know why? I'm careful and monitor my account. Even when I'm broke I know enough not to do this.
on 21 Jul 2008 19:14
er - do you guys check your balance each month? it should never get to the point of $80 overdraft fees. I don't think the whole story is being told here. if she kept putting it off month after month, then that's really her own fault.
Some Guy
on 21 Jul 2008 18:55
She should take it to court. A contract can be found invalid if the judge determines that a clause is unconscionable. 800 pounds for an 8 p overdraft certainly fits that description.
on 21 Jul 2008 18:45
Stupid *censored* banks. I was charged over 300 once because I got into negatives and bought a few small things, all on the same day. I've never heard anything like this here in Switzerland. You just get a higher negative yearly rate, that's it. I guess that shouldn't even be legal.
on 21 Jul 2008 18:37
I dunno I mean it says she went over 100 euros in debt so I guess in part its poor money management on her part. She should have just paid the initial fee and all this would have gone away but she let if accumulate so what do you really expect. As for the banks are going bust Curtis you're kinda of an idiot- This isn't the Great Depression, we're not on the Gold Standard but go ahead and lose money by not storing your money in a bank
Traverse Davies
on 21 Jul 2008 18:34
I'm Canadian. If I go over (and I can't go over on debit, only on cheques, fees and PAP) the bank either declines the charge or charges me $5.00. That is the most they are allowed to do here.
on 21 Jul 2008 18:28
She should simply stop her service and they CANNOT continue to add fees although they could apply interest on her outstanding balance. However, if they interest were anywhere near the rate they are charging, it would be considered loan sharking and is protected by many laws to prevent excessive charging. The key is that as long as she is a contracted customer and has not canceled, she may be subject to the "fees."
on 21 Jul 2008 18:19
Shylocks! If this usery isn't illegal it should be.
Budda Magoo
on 21 Jul 2008 18:17
I've got a better one for you. I closed my Suntrust Bank account on April 31st. On July 7th I was notified that I was overdrafted. It seems a bogus charge came in on my by then defunct debit card for a web purchase by a thief. So what does the bank do? They re-open my account apply the $99 bogus charge and then about $75 in over draft charges. It's July 21st and I'm STILL trying to get them to close the account! America banks reek.
on 21 Jul 2008 18:04
Man, I sympathise! The exact same thing happened to me. Lloyds TSB is so sneaky..They didn't inform me for about a week, by which time I'd already owed them over 60 quid. Daylight robbery, methinks!
on 21 Jul 2008 17:53
I once went about $450 overdrawn on my TD Canada Trust account when a cheque bounced. I ended up paying about 3 dollars in fees... go TD Canda Trust!
on 21 Jul 2008 17:49
Were I to be in that situation, personally I think I'd tell the bank to go ahead... "take me to court". I'd offer them their 8 pence and a reasonable amount (£20 perhaps?). I strongly doubt that a judge would enforce this ridiculous fine for such a minute amount.
Curtis Kline
on 21 Jul 2008 17:25
Remember this as the US banks are all going bust. The best place for your money is NO WHERE NEAR a bank.
on 21 Jul 2008 17:18
I had something similar happen to me, but I had a lot of money in my savings account that they could have drafted from. There was no overdraft notice or anything given by the bank. My attempts to fight them, even all the way to the VP, were futile. I paid the charges, closed my accounts and watched with glee after that bank was bought out and everyone in that office was laid off. I feel for this girl. Sometimes I wish there were a hell so these people could burn in it.
Jerome Knapp
on 21 Jul 2008 17:00
Its hard all over. This is Bank of America's whole business plan when it offers students $50 to open a student checking account. They got me when I overdrafted to buy fast food. Of course no notification, and plenty of fees later I owed them $680. On a $2.50 purchase.
on 21 Jul 2008 16:51
Interesting.... Is that even legal ? Well I guess that she didn't read her contract but I'm pretty sure that in France at least there are some laws on such clauses in a contract. -- Jedaļ