Overdraft charge text alerts save bank customers £85m

Picture: PA
Picture: PA
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FIRST DIRECT and HSBC customers have saved £85m in overdraft charges after the banks started sending out text messages before customers went into the red.

Leeds-based First Direct said over 72 per cent of its customers who received overdraft text alerts avoided fees in September by crediting their account the same day.

Over 50 per cent of HSBC customers took advantage of the alerts.

The two banks now send over 1.5m overdraft text alerts a month.

​The text alert system is designed to give customers a chance to avoid paying charges if they go over their pre-agreed overdraft limit.

​“​If we have a customer’s mobile number they will automatically receive the service​,” said a spokeswoman​.

​“​They can also sign up for it by providing us with their mobile number​.​

“A customer will not be charged if their balance is back within their limit before 11.45pm on the same day​.”​

If a customer goes over their authorised overdraft they incur a £5 daily fee payable for each day they are over their agreed limit. ​

The daily usage fee is capped at £80 in one monthly charging period.

​The figures were revealed as ​HSBC​​ said profits jumped by a third in the​ three months to September​ as a ​sharp drop in fines for past misconduct more than offset a slowdown in Asia and increased spending on regulatory compliance.

Costs related to fines and compensation for customers fell by ​£900m​ as ​Europe’s biggest bank makes progress on conduct issues that have ​hit recent quarterly results.

​T​he bank spent ​£1.4bn on regulation and compliance in the first nine months of 2015, up 33 per​ ​cent year on year, even ​though the government ​is taking a more accommodative stance towards the industry.

C​​hief ​e​xecutive Stuart Gulliver said his plan to squeeze costs ​i​s “gaining traction” and further improvement w​ill​ be seen, including from job cuts.

Earlier this month HSBC imposed a 10​ per cent​ pay cut on its contractors and asked them to take two weeks’ unpaid holiday, as part of its cost-cutting measures. The move will affect hundreds of workers, from IT staff to analysts and others on fixed-term contracts.

It has also revealed plans to cut 50,000 jobs globally over the next two years.