Thursday 13th September 2007
Customers who bank with HSBC are soon to be warned if they are nearing the overdraft limit on their current account when making a withdrawal, it has been revealed.
The financial services provider announced earlier this month that its cash machines will alert users from October 1st if they attempt to make a withdrawal which could incur a fee.
A spokesperson for the bank explains that the move comes in an attempt to ensure customers are aware that they are near the limit of their funds even if they have not taken advantage of the ability to check their balance.
"While you can already check your account balance before you make a withdrawal, few people do," asserts general manager of personal financial services Joe Garner.
"We believe that alerting customers at this point will enable them to make an informed choice about whether to proceed."
Lloyds TSB followed the manoeuvre with the announcement that it is to send text alerts to customers mobile phones if they go overdrawn, as well as introducing a grace period during which, if they deposit funds, no interest will be charged.
"We understand that it can sometimes be difficult for customers to keep tabs on their account and we want to make it easier," purports managing director of consumer banking Ian Larkin.
The two banks already have the lowest interest rate for unplanned overdrafts, according to figures from Lloyds TSB.
Classic current account customers with the financial services provider are charged 19.3 per cent equivalent annual rate (EAR), while HSBC customers incur a rate of 18.8 per cent as standard.
Third in the list is Nationwide with an EAR of 24.9 per cent, while Barclays rate of 27.5 per cent and Abbey at 28.7 per cent complete the five lowest interest rates for unauthorised overdrafts among those compared by Lloyds TSB.
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