In an effort to quell the significant media and consumer
attention focused on bank overdraft fees, HSBC, the UK’s largest
retail bank, has announced it is programming its 3,500 ATMs in the
UK to tell customers if and when a cash withdrawal will cause them
to exceed their overdraft limit.
From 1 October, HSBC’s ATMs will tell its current account
customers that they may incur a service fee if they go ahead with a
cash withdrawal that takes them over their agreed overdraft
limit.
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Joe Garner, general manager HSBC personal financial services, said
that more than 95 percent of HSBC cash withdrawals are now made at
ATMs. “While [they] can already check your account balance before
you make a withdrawal, few people do. We believe that by alerting
customers at this point will enable them to make an informed choice
about whether to proceed.”
Garner added that HSBC introduced a ‘Fair Fees Policy’ in 2002 that
waives overdraft fees “in a range of circumstances that we consider
unfair”.
This year so far, HSBC has paid out £120 million ($240 million) in
overdraft refunds.
Rival UK bank Lloyds TSB has rolled out an SMS based text service
alerting current account customers if they are close to, or over,
their overdraft limit. The ‘limit alert’ text service will warn
customers if they are within £50 of going overdrawn. Another alert
will be sent if they go over the limit or if a payment, like a
standing order, cannot be made.
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By GlobalDataLloyds TSB says a poll of 2,510 adults carried out by YouGov found
that two thirds of people who had gone over their limit said that
they had not known that they were about to go into the red. Some 72
percent of those asked thought that a text alert would be a good
way to receive the warning.
