Lloyds Bank trying to crash the Economy again!
Over recent years I have been keeping my nose close to the ground in respect of the
banks and their rather interesting practices.
Being a typical mature student, with limited cash flow and a fairly bad credit profile ( A previous issue with HSBC fraud when I was in China, they got fined, I never got my credit rating back).
I was somewhat surprised that after nearly a decade of denying me any type of credit (Not even a £50 overdraft), Lloyds Banks suddenly extended me an overdraft facility. (Although my credit profile is still horrendous).
Now I set this at £100, then week in, week out I went online and applied for £100 more.
It was only when I pointed out online, that I have £1700 overdraft facility on My CO-OP Student Account and no other income than Student grant/Loans, that Lloyds eventually declined the increase from the then £2600 overdraft facility to £2700.
However, they came back a few days later and offered me £2650 instead.
Over the past year, I have seen them mismanage the account no less than 32 times, (paying some things when they should not, then not paying priority Direct Debits).
Then Yesterday I received a rather interesting letter. From Lloyds.
It appears that Lloyds has decided to relabel Overdrafts as ‘short term borrowing’, as such they are changing the overdraft usage fee.
Currently, the Fee is £6 + Interest on the outstanding per month on Overdraft usage.
As of November 2nd, 2017, the charge will change from monthly to Daily calculation, which will be 1 pence for every £14 borrowed.
Convert this back to a Monthly rate and its an increase of 882%.
As if that was not a full on kick in the teeth, as of 2nd February 2018, this rises to 1 pence for every £7 borrowed.
Which is 1766% increase on the current charges.
To put this more simply, on the aforementioned overdraft usage of £2650, currently, it would be £6 +Interest per month.
As of 2nd February 2018, it will be £106 + Interest.
Lloyds is trying to claim that this is Legal to do for existing borrowing.
There is only one outcome from this:
Mass defaults on overdraft payments.
So I wonder who has been taking my previous advice and shorting Overdraft lending?
Time to invest in the likes of Bitcoin, as due to the lending rules (10 times what they hold) this crash is going to be 10^3 greater than the last.