Barclays pulls overdrafts for some customers as cost of living crisis hits
A MAJOR high street bank is scrapping arranged overdrafts for some of its existing customers.
Barclays has been sending some customers letters advising them that they'll soon lose their overdrafts.
An overdraft will allow you to borrow money using your current account - but like any form of debt, they charge interest.
Usually there’s a charge when you go overdrawn, which gets bigger the more you borrow.
Overdrafts are handy but the interest rates are very high so it's best to avoid using them - and looking that other forms of credit if you can afford to.
But some Barclays customers are finding their overdrafts are being pulled.
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One customer Tweeted: "I have an overdraft I never go into that's worth £7500. But Barclays sent me a letter telling me it’s being cut to £1750 for no reason… what’s all that about?"
Another said: "Barclays Bank removed my overdraft a few months ago. I never used the facility but does seem odd that they’d withdraw it."
Another customer also said: "I've had an overdraft facility on my bank account for over 30 years although I've never used it. Suddenly, I've had a letter saying it is being removed from 19th September 2022."
Banks have the power to close customer overdrafts without notice (though Barclays is writing to customers to inform them about the changes).
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In response to these actions the banking regulator, the Financial Conduct Authority (FCA), has said that banks should "consider the circumstances of their customers - especially with the cost of living rising".
An FCA spokesperson said: “When making changes to available credit, we expect firms to consider the circumstances of their customers, including any vulnerability, to communicate clearly and to allow people time and opportunity to challenge and complain if they disagree.
“With the cost of living rising, more consumers may need to turn to the credit market, including overdrafts. Lenders need to treat people fairly as individuals and consider their needs."
A Barclays spokesperson said it reviews all personal arranged overdraft limits at least once a year, taking into account all the financial information we have about each customer.
If it decides that the overdraft limit is too high, and could result in customers falling into unmanageable debt, it may reduce the maximum amount you can go overdrawn.
Barclays said it also takes into account how often overdrafts are used by a customer: "If the overdraft hasn’t been used at all for a long time, we may remove it."
The bank said it was giving customers enough notice to allow them to respond and take action.
What if I still want the overdraft?
Barclays said that if customers feel they are able to afford their current limit, they will need to provide additional information to confirm their income and expenditure.
You'll need to phone the bank on 0345 734 5345 to discuss this.
If this works out, the bank should restore your overdraft or offer you a new deal.
If it doesn't, you can escalate the situation and complain.
How to complain about your bank or credit card provider
Banks are required to have a written complaints process that tells helps customers how to make a complaint.
It's worth making your complaint as soon as possible, as it'll be easier to remember all the relevant details to strengthen your case.
You can launch a complaint with Barclays by phoning 0800 282 390 and selecting option one.
You can also send a letter explaining your complaint to Freepost Barclays Customer Relations.
You don’t need to include a postcode or add a stamp for your letter to reach us, but please remember to take the postal service into account for our response time.
And if you want to talk to someone face to face, you can to discuss your complaint.
Once you've sent in your complaint, the firm needs to give you a response within eight weeks.
If you don't get a response within eight weeks or you're not happy with the one you do get, you can take your complaint to the free .
How to take your complaint to the Financial Ombudsman
If you decide to take your complaint to the Financial Ombudsman (FOS), keep in mind you must typically do so within six months of your provider's final response.
To get in touch, you need to fill .
If you'd prefer to talk it through with someone, the FOS can help you do this if you call 0800 023 4567.
When you get in touch, you need to have the following details to hand:
- Some basic information, including your name and address
- What the problem is, and how you want things put right
- Details such as the policy number or account number that your complaint relates to
The FOS will then look at the evidence provided by both sides, and it may contact you for more information.
Once it's made a decision, it'll write to you and if it agrees with your complaint, it'll say what your bank or credit card firm must do to put things right.
What other options do I have?
If you're unsure about how to put your complaint in writing, free online complaints tool Resolver can help you do it.
It'll help you file and track a complaint, including drafting the letter, sending it, monitoring replies and then escalating it to an ombudsman, if needed.
Just keep in mind that while Resolver includes a huge number of firms, it doesn't include them all.
To find out, go on and check if your company is covered.
The tool covers sectors ranging from telecoms and energy, to travel, finance, property, pensions and leisure.
Complain on social media
Another way to complain is to post your issue on social media.
Most brands have teams responding to queries on sites such as Twitter and Facebook during office hours, so it's worth trying this way too.
If you're using Facebook, simply go directly to the company's Facebook page.
Make sure it's verified and then either post a query on the page, or send a private message if that option is available.
If you're using Twitter, simply tag the brand in the tweet so they get notified.
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