Should Pots balances be counted for overdraft fee calculations?


(Dan) #400

I absolutely agree it is. My comments contain assumptions and shouldn’t be taken as more. My defense really is out of people muddying facts and opinion. Without knowing absolutely that a requirement for an account is an account number, I think people should be making it clearer they do not know.

Agreed, I look forward to the clarification from Monzo too.


#401

This is also true for savings accounts totally separate to my current account. Eg bank of Cyprus saver. Paragon saver etc. All must deal with a nominated account


#402

I think that account numbers are a red herring.

My view is that the status of pots could be clearer and that their treatment in terms of overdraft could be more explicit (in particular the Account tab where the total balance is given as including money in pots).

That said, despite thinking that there could be more clarity, I can’t say that Monzo’s intended outcome is unclear - to me at least.

And - and I hope I’m not a victim of too much kool aid - I really can’t say that I see it as a way for Monzo to exploit their customers or to profiteer. Monzo is still young - to do that consciously would be short-termist and harmful for the bank. (For balance, though, if this were to be what Monzo was doing, I’d be thoroughly disappointed. But, as I say, I just don’t see it).

My simple suggestion is just to tighten up the terms and conditions and some of the language in the app. Then we can disagree about approach rather than technicalities!


#403

Am I seeing the CEO typing a response to this thread


#404

Now thats on the ball detective work haha.


(tom) #405

Let’s start with a couple of points.

Pots are an opt-in feature. Overdrafts are also an opt-in feature. If you choose to enable the overdraft, it costs 50p a when you’re more than £20 below zero on your main account. We explain this to everyone up front. We also warn customers before they go into their overdraft. If you don’t like this behaviour, you’re free to leave the overdraft switched off, which costs you nothing.

Other banks charge £10/month just to switch off unarranged overdrafts.

If the worst happens, and for whatever reason you miss the repeated warnings or misunderstand them, you may incur a charge of 50 pence. Let’s please try to keep this in perspective.

Debating the technicalities of whether or not pots are a separate account seems to be missing the point. This is a product design decision about how we believe Monzo should work.

First, it’s because we want to keep the mental accounting as straightforward as possible. You see the balance on your homepage and that’s the money that’s available for you to spend. It’s useful for many people to keep money in pots as separate as possible - it’s intentionally out of sight, and you shouldn’t be able to accidentally spend it without taking proactive action to move it into you main account. You shouldn’t need to do maths to figure out how the account is going to work.

I’ve got money sitting in a pot that I need for a tax bill. I do not want to accidentally spend it - I want to keep it ringfenced so that I know for sure that I will be able to pay my tax. Same goes for Direct Debits - in the near future we’d like to introduce a pot for “committed” spend, so as soon as you’re paid, we can automatically set aside money you will need for your bills.

Finally, in future, you will be able to convert pots of money to interest-bearing savings accounts at other banks. It will become very confusing if some pots count towards your overdraft, but other pots don’t.

So we took the decision to keep it straightforward. If you go more than £20 below zero on your main account balance, it costs 50p a day. You may disagree with this design decision. That’s ok - just don’t enable the overdraft.


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#406

Hopefully this can put the topic to rest, makes complete sense, and seems like a logical approach.


#407

Im more than happy with this information and will continue to use Monzo as it is intended to be.


#408

That was a bit of a Starlingy response for me…

But hey, it’s answered now with a thumb on nose so I don’t plan to ask any further on it

Still think the T&C isn’t clear but that wasn’t addressed.

Thanks for reply. :+1:


(Jamie 🏳️‍🌈) #409

Tom, thank you for taking the time to write that.

For me, the big fly in the ointment is the line on the Account Tab which clearly shows the word ‘Balance’ and then a figure which is the sum of your Current Account and all your pots. It is the inclusion of this erroneous figure, which is never referred to specifically in any terms and conditions, and which Tom states is not in fact relevant in calculating whether or not one is to be charged for an overdraft, which is causing confusion and to which I object.

The decision may have been taken to keep things “straightforward” but what has resulted, if one removes opinion about the ethics and the mechanics of overdraft charging, is a huge thread in which the facts about when one is charged for being in overdraft are NOT clear, and are NOT clarified even when referring to the existing Ts&Cs.

Therefore, despite the very welcome explanation by Tom above, I still stand by my assertion that, in it’s current state, Monzo’s overdraft product is flawed, even to the point of a legal challenge.

Either remove the confusing cumulative ‘Balance’ from the app, or re–write the Ts&Cs to be explicitly clear.


(Kevyn) #410

@tom you are dismissing this part of the debate when it is central to the fact that Monzo’s terms and conditions are not in line with your intentions.

I like Monzo’s intentions for pots and how overdrafts are applied to the card balance. I agree that Monzo can design their app however they like and people opt in to pots and overdrafts. I don’t think Monzo are taking advantage of anyone. Your reply is very good except for that line.

Your terms and conditions are not an accurate representation of your app’s layout and could be subject to a challenge if anyone decided too. The reasons why I have posted previously in this thread.


(Sam) #411

I’m sorry. That’s a poor response that doesn’t get to the bottom of the issue and simply waving it away as a “design decision” is a bit legacy bank.

As long as my current account total balance, as shown in the app, is above -£20 I don’t believe it’s fair to charge on an overdraft as I wouldn’t actually be borrowing from you.

Now if pots were separately held you’d have a point. But they’re not and your essentially charging people for nothing and I believe if it was challenged, you’d probably lose as your terms aren’t clear.

It’s pure mental gymnastics to try and defend this.


#412

Debating from here feels a little futile - I can’t imagine any Monzo employee wading in and giving their opinion… Not those who like their jobs anyway :joy:

As for the respone from @tom, it’s always fantastic to get a glimpse into the mind and ideology of one of the key decision makers. Regardless of what you may think of the response…

From my point of view, I feel the response overlooked some key areas, as @Chapuys pointed out - This is arguably the main point that was being debated - Although a simple change in the wording of the T’s and C’s would solve this debate.

For what it’s worth, I don’t like the way Monzo deal with the issue at hand, but I can see why they went down this route.

Clearly there are plans for 3rd party integration with savings accounts etc, hopefully they can make them as seamless as possible (it all sounds a little “messy” when written down at the moment).

But yeah, anything further will just be going around in circles, I see no value in arguing different points of view.


(If there's the wrong end of a stick, you'll find me holding it.) #413

The post by @tom basically confirms this. I think it’s poor, but it’s Monzo’s game, and they set the rules.

I came to Monzo thinking that they would be a bit better than this. Seems I was wrong. :slightly_frowning_face:

[Edit] I think, maybe, a better way of expressing what I feel would be to say that while I used to think that Monzo was a ‘better, more innovative, customer-focussed’ bank, it is now more like another service that I use.


(Michael) #414

That makes no sense whatsoever,charging an extremely high overdraft interest rate (that’s what it is, no matter how you try to hide it) is ok because it’s easy to understand is not acceptable.
Offering no interest but still charging the rip off interest rate on victims that are in credit is not acceptable.
You know were this is going,it’s a desperate effort to make Monzo profitable so the majority shareholders can walk away with millions. I suppose as a minority shareholder I should be pleased,but I’m not.


#416

Wasn’t flawed to me. Move along if you’re so unhappy. It’s becoming repeative and bordering on your final grasp to get last word as it didn’t suit you.


(MikeF) #418

Note to everyone… We all know what your opinions are since they have been stated soooooooo many times. For the love of everything, please stop restating them endlessly. Pretty please? It isn’t going to change anything and the amusement value has decayed an eon ago.

Normal service may now resume.


#419

I wish I could believe it would.


#420

Can those that don’t want to see it untrack those that do … as you were


(Gareth) #421

Mods Coral Crew probably will not, for the sake of keeping peace.

Thoughts and prayers.