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



## dieter1 (19 Jan 2012)

AIB rang my unemployed (solicitor) wife this week to tell her that they are cancelling her overdraft.  She has to pay it off by a certain date in february otherwise there will be excessive charges.

We're talking €400 into a €4k overdraft which she has never gone over €1500 into (in eight years).

I find it disgusting, this is the same bank that literally threw money at people when times were good (remember the pre approved car loan cheques in the mail?)and the minute things are tough, they withdraw all support.

i give my wife €500 per month as an income of sorts and she receives child benefit and early childs allowance.

Any one else had this problem.


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## ClubMan (19 Jan 2012)

Did they say why they are cancelling her overdraft?
What charges will apply if she doesn't pay it off in time?
Is this a personal or business current a/c?


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## dieter1 (19 Jan 2012)

Its a personal account.
Reason given was lack of income.
If its not paid, she will be deemed to be over her overdraft limit (as her limit will now be zero).  I will look up the exact charges tonight.


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## dewdrop (19 Jan 2012)

Would the bank consider granting a smaller limit.  Overdraft facilities were granted in the past on the basis repayment was "at the pleasure of the bank".  I think it now says "repayable on demand".  It would have been better if bank had asked her to call to review and perhaps agree to a lower limit but unfortunately the human input seems to have gone.


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## ClubMan (19 Jan 2012)

Is this an approved overdraft facility that she was paying a fee for?
Has she been constantly overdrawn?
What do the terms and conditions of her account say about whatever overdraft facility her account has?


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## STEINER (19 Jan 2012)

seems a bit heavyhanded if the overdraft is only 400e at the moment.

I have an overdraft faciliity of only 300e with AIB, rarely use it, would save 25e fee per annum if I axe it, I might get rid of it......


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## dieter1 (11 Apr 2012)

The story gets worse.

My wife sorted her overdraft out.  The facility is now gone.  Yet, she is still able to become overdrawn and be hit with higher charges.

What the hell are they playing at?  They call it an unauthorised overdraft, I havent seen the charges yet.  Surely if they take away your overdraft, you cant spend more than is in your account?

These cowboys have lost my companies (€500k t/o) business after this.


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## mf1 (11 Apr 2012)

I don't understand what the problem is. 

Your wife presumably will only pay excess charges if she becomes overdrawn. Perhaps by a direct debit or standing order that the Bank honour? So the answer is not to become overdrawn.  Then there are no charges? 

What are we missing here? 

mf


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## Brendan Burgess (11 Apr 2012)

> Surely if they take away your overdraft, you cant spend more than is in your account?



Hi Dieter 

If your wife had direct debits or drew cheques on the account, they could have bounced them which would be far more hassle than excess charges. 

If you and your wife both bank with AIB and you are a valued customer, as you appear to be, then maybe you should consider a joint account? Or put the direct debits on your account so she always knows where she stands. 

You probably want to keep your finances separate from her finances, but if you have the same  branch, it's likely that the manager will sort out your wife's overdraft problem. 

Brendan


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## dieter1 (11 Apr 2012)

mf1 said:


> I don't understand what the problem is.
> 
> Your wife presumably will only pay excess charges if she becomes overdrawn. Perhaps by a direct debit or standing order that the Bank honour? So the answer is not to become overdrawn.  Then there are no charges?
> 
> ...



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.

My wife went €1.64 into her overdraft (which they cancelled last month) yesterday.  She is now going to be hit with large fees, because of that.

There are no direct debits on the account, as we do have a joint account for that.

How do you cancel the ability to have an unauthorized overdraft? Surely if you take away someones overdraft, you cant then hit them with higher fees for going back into it (because it doesnt exist)

Its fine MF1, if you are know exactly every second what is in your account.  But these unauthorized overdrafts are a very underhand way of catching people with charges who are very close to zero balance.  I can imagine alot of people are in this situation and regularly get hit with excessive charges.

Of course the best way is to constantly know exactly what your balance is and not go overdrawn, but you shouldnt be penalised for going into an 'unauthorized overdraft' when they actually rang you up and demanded that you close your overdraft.


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## 44brendan (11 Apr 2012)

> How do you cancel the ability to have an unauthorized overdraft? Surely if you take away someones overdraft, you cant then hit them with higher fees for going back into it (because it doesnt exist)


Dieter, when an OD facility is withdrawn the Bank requires a client to maintain an account in credit. This is the responsibility of the client. When an item is presented that is in excess of the balance on the account the Bank (at it's option) can either pay the item or return it unpaid. Both will involve charges (ask to see a copy of the Bank's schedule of charges to understand those applicable). 
I'm not commenting on the rights or wrongs of the situation you describe but merely clarifying the reason these charges were applied.


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## Brendan Burgess (11 Apr 2012)

> 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.



No. This has nothing to do with the withdrawal as such.

If you have an overdraft limit of say €5,000 and you present a cheque or DD which will bring it to €5,500 , the bank will probably let the cheque go through. 

Likewise if you have no approved overdraft, and you present a cheque which brings you into the red, then they will probably let the cheque go through. 

I think you would be even more annoyed and it certainly would be more expensive if they had just bounced the cheque which had pushed her over the limit. 



> Its fine MF1, if you are know exactly every second what is in your account.



If you have a current account, you do need to keep an eye on it if you are bouncing up against the limit. If she presents her debit card in Tescos after doing her shopping, she would be very embarrassed to have it rejected.


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## Janet (11 Apr 2012)

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.  Something like 5 euro for the first transaction, 7.50 for the second and so on.  So he ended up sometimes using his card to buy a few groceries, maybe four or five euro worth of stuff, and being charged as much again for overdrawing.  He went to the bank a few times to ask them to make sure that his card would just be refused if he didn't have enough money in the account but apparently that was not possible.  And they won't give him an approved overdraft facility for even a small amount, I assume because he's in receipt of SW payments.  

I have had an overdraft facility with Bank of Ireland for years and never had any issues with them.


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## dieter1 (11 Apr 2012)

I would have thought rejecting the card in Tesco would be the obvious solution as a bank.

The way I see it, by not rejecting these transactions (not DD's), whilst the bank can say they are doing the honourable thing, the real reason is that they are making more money out of this.

I cannot believe that a Bank (electronically) has a grey area of whether they pay these transactions or not.  Does a staff member monitor each of these transactions?  I doubt it, in fact, I'm 100% sure that they dont.

By it not being black or white, its in their benefit.  

Which I find a little bit annoying (is that obvious? )


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## mf1 (11 Apr 2012)

"Which I find a little bit annoying (is that obvious? ) "

Breathe, breathe.........................there, there. 





mf


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## 44brendan (11 Apr 2012)

> I cannot believe that a Bank (electronically) has a grey area of whether they pay these transactions or not. Does a staff member monitor each of these transactions? I doubt it, in fact, I'm 100% sure that they dont.


Think of it as a "tolerance limit". You are correct, OD's are not monitored individually. however the Bank does input what is known as a tolerance limit for clients with satisfactory track records (Yes. These limits should not attract fees etc, but they do!). The bank will allow the client to overdraw within that limit, but charge a fee for this. Alternatively the Bank could return the item unpaid, but a higher fee plus inconvience would be caused by this.
Is it fair? No, I agree that if the Bank are prepared to pay items up to a tolerated limit, then fees/charges should only be imposed above that limit. Is it profitable? Yes


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## Padraigb (11 Apr 2012)

The onus is on the customer to be aware of his/her position and avoid tipping the account into overdraft.

If I attempt to make a payment that exceeds my balance (or o/d authorisation) the bank can choose to treat it as a request for o/d facilities, make the funds available, and charge me a fee for the service. The only person I can blame is myself.


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## irishmoss (11 Apr 2012)

Deiter1 could you not ask the bank for a small overdraft of €100? I know they took away the larger overdraft but I would still ask the bank. If they don't then maybe try another bank.
Failing this I would simply give your wife the €500 in cash each month or lodge it and withdraw in ATM's as needed. I prefer to withdraw cash sums rather than use the laser cards, much easir to keep track of your spending, once my purse is empty that's it )


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## markpb (11 Apr 2012)

irishmoss said:


> I prefer to withdraw cash sums rather than use the laser cards, much easir to keep track of your spending, once my purse is empty that's it )



Most people would expect Laser to be the same - it's a debit card, not a credit card so they shouldn't be issuing credit through it.


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## partnership (11 Apr 2012)

I can quite understand why you are annoyed about this particularly if you are a good cutomer and from what you say your wife has not abused the overdraft.  I would take my business elsewhere where it is appreciated.

I have an overdraft with BOI and am always in it, however both salries go into it so that is probably we have no problems.  If they decided to reduce it to zero I would move banks.


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## Bronte (16 Apr 2012)

dieter1 said:


> 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.


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## Bronte (16 Apr 2012)

Janet said:


> 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.
> .


 
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.


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## Janet (16 Apr 2012)

Bronte said:


> 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.


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## Bronte (16 Apr 2012)

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.


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## orka (16 Apr 2012)

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.


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## Janet (16 Apr 2012)

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.


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## irishguy (24 Apr 2012)

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.


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## Bronte (25 Apr 2012)

I think they are phasing out cheques?


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