£500 charge for '8p overdraft'

21 July 2008 06:18pm

A student has refused to pay bank account charges in excess of £500 as she claims they were incurred for going just 8p into her overdraft.

Laura Gibson now faces legal action if she does not pay the charges she said she cannot afford.

The 20-year-old said Lloyds TSB charged daily fees of up to £20 and a monthly fee of £15 for having an unplanned overdraft in January. But the bank said Ms Gibson continued to use the overdraft beyond the transaction that took it to 8p, so it continued to charge.

Miss Gibson, who is enrolled on a course at Gloucestershire College to start this September, did not notice the charges at first, and by the time she was aware of the debt it had spiralled beyond her control.

Miss Gibson, who lives in Monkscroft, Cheltenham, Gloucestershire, suffered a nervous breakdown last November and claimed the stress had contributed to her illness.

She said: "On top of this (the debt) they have been harassing me by telephone and by mail, putting pressure on me to pay this money back. I suffered a nervous breakdown in November which was partly due to financial stress and this constant harassment has only made me worse.

"I feel that it is morally irresponsible that the bank can charge people such ridiculous amounts of money especially when some of their charges amount to more than my income each week. There is no possibility of people paying this back but they still accumulate daily charges driving people further and further into debt."

Miss Gibson said the bank initially charged £20 a week for being overdrawn, but when her debts topped £100, the bank started charging £20 a day. Her latest bank statement shows she was £180.97 overdrawn on May 1 but by July 1 it had increased to £515.38.

Miss Gibson said she intends to claim the money back and has had to pay another £10 fee to request a full list of the charges and copies of statements. "What I am planning to do is make a list of all the charges which they have listed for me and request that they pay this back to me as well as writing off my current debt," she said.

A spokeswoman for Lloyds TSB said: "The charges that Ms Gibson has incurred are not for a one-off unplanned overdraft position of 8p, they relate to an unplanned overdraft of varying amounts dating back to September 2007." The spokeswoman said several repayment packages were offered to Ms Gibson, but the 20-year-old turned them down.

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