Over two thirds of first direct and over 40% of HSBC customers who received overdraft text alerts¹ have avoided fees by crediting their account the same day, following the introduction of a new overdraft charging structure last month.
Changes to overdrafts include simplified charges and text alerts if customers spend over their limit, with over 1.2m texts sent since 10 November 2014.
Francesca McDonagh, Head of Retail Banking at HSBC UK, said:
"Customer feedback on our overdraft text service has been extremely positive and with Christmas fast approaching the text alerts will help customers avoid charges at what can be an expensive time of year."
HSBC and first direct customers who stay within their agreed overdraft limit pay overdraft interest between 11.9% and 19.9% EAR² with no additional charges.
If customers go over their limit, and we hold a mobile phone number for them, they will receive a text message unless they choose to opt out. Customers will not be charged if their balance is back within its prearranged limit before 11.45pm on the same day.
Further information about overdraft changes since 10 November 2014:
There is no fee for an informal (i.e. not prearranged) overdraft request of £10 or less
Informal overdraft charges will not be higher than the amount by which a customer exceeds their limit in each charging period (e.g. the cost of a £15 informal overdraft will be limited to £15 even if the customer remains over their limit for more than three days)
Charges will be capped at £80 in one monthly charging period (charges were previously capped at £150)
HSBC and first direct customers whose payments are declined due to insufficient funds are not charged a fee. This fee was removed in November 2013
If overdraft interest and fees alone cause an account to go over limit no overdraft usage fee will be charged
Customers will not be charged further overdraft usage fees if their account remains in informal overdraft for more than 30 consecutive days
HSBC and first direct customers who make a withdrawal from an HSBC ATM will be warned that they may incur a fee i if the withdrawal takes them over their overdraft limit
Customers are given at least 14 days' notice before fees are debited from their account.