Changes to our personal overdraft terms and conditions, interest and fees

We’re making some changes to our personal overdraft terms and conditions. This is largely to make them more modern and update them for new laws and practice. We’ve also made some changes to some of your and our rights and obligations. We’ve refreshed our overdraft terms and conditions to make them much easier to read and understand, and we’re pleased to have achieved the WriteMark Plain Language Standard.

We’re also removing all fees on our overdrafts - this is just another way we're committed to putting our customers first.  

We’ve rewritten our interest and default interest clauses. We set out when we’ll charge default interest and which of our default interest rates applies to the situation. We’ll also deduct interest and default interest on the last working day of the month, rather than the last calendar day. 

These changes to our overdraft terms and conditions and fees will apply to your personal overdraft from 30 November 2021. 

These changes do not affect any business overdrafts or any temporary overdrafts (i.e., overdrafts with a set expiry date) you may also have with us. Those overdrafts will continue on their existing terms.

What does this mean for you    

These changes don’t affect your existing standard interest rate on your overdraft, or your overdraft limit (credit limit).

There’s a couple of things we think you should know:

• We have included more key information about your rights and obligations in the overdraft terms and conditions, e.g., you can now find information about your hardship rights and the frequency we provide statements in our overdraft terms and conditions.
• Some terms in the new document may not be relevant for your overdraft.  For example, in the future, temporary overdrafts will also use these overdraft terms and conditions. 
• If you have a personal loan, the Loan Contract Terms – Retail will continue to apply to your personal loan and are not changing.  

Some of the changes do affect your rights. We’ve also added in a new term to say that where we do anything in relation to your overdraft terms and conditions, we will act fairly and reasonably. We will consider the circumstances, as well as our obligations as a responsible lender. 

What’s changing

Here’s an overview of the changes we think are important. 

Modernising our documents

• We’re updating the ways we can contact you and provide you information, and the ways you can contact us, about your overdraft. We’re allowing more modern forms of communication (like email or text message) to be used, and we’re removing fax as an option. If you don’t have an email address, don’t worry – we’ll still send you communications by post.
• We’ve made some changes to how we deal with independent trustees. This is relevant only if a borrower is a trust with an independent trustee (also known as a professional trustee). We still agree to limit the potential liability of independent trustees, but following the recent law change from the Trustee Act 1956 to the Trusts Act 2019, we’ve made some changes to reflect the new law. 

Changes to the fees and costs we charge

• We’ll no longer charge a monthly service fee or other fees on our personal overdrafts.  However, we may introduce fees on your overdraft in the future.  
• We’ve also set out the situations when we can recover costs.

How we charge default interest and the rates that apply

• We’ve detailed the situations when default interest applies and which of our default interest rates applies to that situation.
• We’ll charge default interest if you:
  • Exceed your overdraft limit; or
  • Your overdraft is cancelled and you have not repaid us.
• If you exceed your overdraft limit, our default interest rate on the amount over your limit will be 5% above your overdraft interest rate at the time.
• If your overdraft is cancelled and you have not repaid us, our default interest rate on the overdue amount will be 22% per annum.  This rate is not on top of your standard overdraft interest rate.
• We’ll charge default interest on the last working day of the month.

How we charge interest

• We’ll charge interest on the last working day of the month.

Other key changes

• One of the important changes in our terms and conditions is that where more than one person is a borrower in relation to your overdraft, each borrower authorises any borrower to agree changes to your overdraft contract on their behalf. It’s important everyone understands how decisions can be made in relation to your overdraft, and we think this will make it easier to manage your overdraft. You should always make sure you get the agreement of all borrowers before making any changes to your overdraft contract. 
• We’ve updated the description of the circumstances where we have the right to reduce your overdraft limit (credit limit) or cancel any unused overdraft limit without your agreement – see section 7 ‘We can reduce your overdraft limit or cancel any unused overdraft limit for certain reasons’. Please make sure you look over this as these terms are very important.
• We’ve clarified when we can ask you to repay your overdraft in full and/or cancel it – see section 8 ‘Payments you must make’.  These terms are also very important so please make sure you look over them.
• We’ve extended the period of notice we need to give you of fee changes to 14 days.  In addition, we’ve provided that if a change to your overdraft contract is in your favour or so we can comply with law, we may give you less notice.

Security and guarantees

• If you have granted us security, or someone else has guaranteed your obligations under your retail overdraft contract, we will treat that security and guarantee as if it does not apply to your obligations under your personal overdraft contract.
• This waiver will take effect from 30 November 2021.