AIB cancelled wifes overdraft on personal account: reason given "lack of income".

[Bronte]

I would have thought, if AIB are going to cancel the overdraft, that you could not then withdraw or go over whats in the account.

Of course the best way is to constantly know exactly what your balance is and not go overdrawn, .

Your wife was upset about this but actually it is her fault not the banks. They are cleaning up their way of doing business and part of this is taking away overdrafts. Overdrafts were never meant to be a long term way of managing a personal account but people who have had them for years think they are a right. In your wife's case the banks thinks that her income does not justify an overdraft. That is their right.

You could have sorted this by making it a joint account and then the bank may have granted an overdraft.

By allowing your wife to go into 'unauthorised' overdraft it was far better for her. Hopefully, now yes she should know how much is in her account and budget accordingly.

And if you think you'll get any better service from a different bank please tell us because they are all basically the same, with in my experinece the BofI and AIB being so bad that I have vowed never to deal with them.

 

[Bronte]

My brother ran into this problem with Bank of Ireland when he first got a laser card. He thought that he'd only be able to use it if he had money in his account. But if he uses his laser card without checking first if there is money in the account (he's on disability and never has a lot of money) the transactions often/usually go through and he is charged huge penalties if he goes into a negative balance.
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You would think that someone on SW who gets hit with penalties of 5 Euro (and rising) more than once would learn to never go into unauthorised overdraft. The solution is not an overdraft. He has to learn to budget, check his account before he uses it to buy groceries and if he cannot manage that he should take out in cash how much he needs each week and spend the cash, and no cash no spend.

Overdrafts are not a good idea. They cost a lot and make people lose sight of budgeting.

 

[Janet]

You would think that someone on SW who gets hit with penalties of 5 Euro (and rising) more than once would learn to never go into unauthorised overdraft.

And in a perfect world everyone would know how to budget properly and never make any mistakes. And everyone would understand exactly how banking works immediately on opening their first proper account. What a pity we don't live in a perfect world and sometimes it takes people a while to figure things out.

 

[Bronte]

It's got nothing to do with perfection. And I'm not casting aspersions on your brother but he more than once went into overdraft and still didn't learn. If banks just let people away with it nobody would ever budget. You can't blame the bank for your brother's mistake and that's the way your post came across.

 

[orka]

It's a tough call for the banks. If you search AAM you will find people with the reverse problem: indignant that the bank had bounced a cheque or refused a direct debit even though it was only a tiny bit into an overdraft/money was on the way etc. The bank can't win - whichever way they run things, some customers will be unhappy. Maybe they should make customers tick a box/sign up to what treatment they want:

1. We will not let you go one cent into overdraft, cheques will be bounce, DDs will be refused, your lasercard will be refused at Tesco and it will cost you (time, money and potentially embarrassment) to sort things out

OR

2. We will let you go a bit into unauthorised overdraft but we will charge you fees for this.

At least then customers couldn't complain when they are at the wrong end of the bank's treatment.

 

[Janet]

There is very little way to avoid going into overdraft if most of your money has been used up by the charges (and the overdraft amount itself) and you still need to eat. No choice but to use an unauthorised overdraft again and it becomes a vicious circle that can take a while to get out of. Five or ten euro makes a difference when you have a very limited amount of money available.

I do think that the banks are wrong in this case. And I have always thought so, ever since I first got a laser card and realised that the transactions don't show up automatically. But either offer an overdraft or don't. But don't make it possible to overdraw on an unauthorised basis and then impose hefty fines. If you go to an ATM and try to take money out but there's none in your account, you get a message saying insufficient funds. In my opinion, debit cards should work in the same way and if there is a technical reason that cannot be so (for example, because not all shops process transactions on a daily basis) then I don't think it right that the customer should be the one to suffer for it.

I think most people would assume that if they have no overdraft facility, or if their overdraft facility has been removed, then they should not be able to overdraw at all.

 

[irishguy]

You can get AIB to mark your account as not able to go into overdraft (I forget the term now). This will prevent you becoming overdrawn, which will normally happen with cheques not by ATM/Debit card transactions.

 

[Bronte]

I think they are phasing out cheques?