Making payments
You need enough money in your account to make payments. But some transactions that would take your balance below zero may still go through. If that happens, we’ll let you know the amount you’ll need to repay before the end of the day.
If your balance is below zero, we won’t charge anything up to -£20. But after that, we charge 50p a day at the end of each day. We calculate overdraft fees at the end of the day and take them from your account on the first day of the month.
This is then still the murky bit and quite key. What is an ‘account’?
If an account is defined and the main balance plus pots then clearly you shouldn’t be charged an overdraft fee if the whole account is in credit.
If an account is defined as just the main balance and pots are separate accounts then clearly you should be charged an overdraft fee as the main balance is not in credit.
It’s a very interesting discussion about how Monzo / Starling handle overdrafts and fees. I don’t have a problem with Monzo taking a different approach to Starling or a different approach to Barclays on how they handle overdrafts.
I also think it’s good that we have a way to lobby Monzo to make changes but we have to acknowledge that we’re not the decision makers.
If you think that Monzo’s approach is the wrong one, you’ve lobbied them and they’re not changing, your decision comes down to stay or go.
If you stay, maybe you don’t have an overdraft facility with Monzo. We have the tool with the app to know when we’re in danger of going into overdraft. And, hopefully, can manage our spending or transfer money to avoid it.
I too do not have an issue with their charging for an overdraft or the fee they charge for it. I do however find no sense in it not being based on the positive balance of the account which include anything in a pot which isn’t a separate account in any way, shape or form. If it was fair play.
I just see that this is a case where the development of the app has outpaced the terms what were written up for the overdraft. It shouldn’t take a court case to try. A simple email to COps quoting the terms and conditions should remove any fees incurred if you had a positive total balance including pots at a time you were charged an overdraft fee. If COps initially refuse then escalate it to @simonb or a formal complaint and it should be refunded.
I’m sure @tom has expensive lawyers always looking at terms and conditions, but to me they are clear and banks need to keep these types of things clear for the customer. If you have a positive balance in your account then you shouldn’t get charged and to our knowledge an account is the whole of your main balance and pots as @nanos posted his statement showing a ‘Total balance’ of them combined. Things need to be clarified .
I think it’s more likely that the terms are deliberately dumbed down simplified, but here to a point were they are actually inaccurate. Sadly, Monzo don’t show their terms much love…
I really hope Monzo see sense on this one and change the behaviour. I asked it waaaaay back in the overdrafts thread whether it would be treated as a kind-of offset account (like some mortgages).
It seems obvious, particularly with joint accounts coming in. If they have more than £0 of my families money then I don’t see how Monzo can charge me interest just because some of it’s on the wrong column of their database!
The fee and separation of accounts are the same for both Monzo and Nationwide when it comes to overdrafts. But I think most people on here aren’t complaining about the fee, but rather that pots aren’t taken into account, even though they are clearly included in the total balance figure. In contrast, this makes sense for Nationwide since their eSavsrs, regular savers, etc are separate accounts, unlike Monzo’s pots.
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Anarchist
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73
I don’t think so. You can have savings accounts with Nationwide without having to open a current account. You can’t have a Monzo pot without having a current account.
Pots are part of the account with Monzo, savings accounts are separate financial products with Nationwide.
I’d you don’t want to spend it, it means you want to save it. Therefore, you should have a saving account, instead of a standard current account where you can save your money.
But Monzo don’t want to be like the legacy banks, they want to be different and that’s their USP. If Monzo was just like nationwide, then why should I open a Monzo account? We’re not comparing Monzo with other legacy banks here, were comparing Monzo to another challenger bank (Starling).
I’ve seen Monzo say that on average they’re seeing users open the banking app twice per day - this is way above most other banks.
Given this, is it really beyond the wit of Monzo to clearly articulate, in plain English, the position each customer is in with regards to fees at any point in time?
We’re beyond waiting for a monthly statement with no idea how much fees may or may not be which is where people often get in to trouble, so charging customers more in the name of simplicity does not hold water, and is the opposite of transparency which is a value that Monzo claim to hold dear.
In my view pots are not separate accounts, and therefore to charge fees to a customer when they actually hold a positive balance is wrong - this is compounded by the fact that Starling do not do this.
I always get very suspicious when a company choses a policy that results in charging the customer more in the name of simplicity - more often than not it is just a cynical grab for more revenue and sadly I haven’t seen anything to convince me that this isn’t the case here.
If this truly isn’t the case and there really is no way to articulate this better, perhaps Monzo would be willing to commit to donating any revenue gained from charging fees to customers with a positive balance to charity?
Joint accounts are a different thing though, as they are separate accounts (I’d hope). But telling me “your total balance is positive”, while also charging an overdraft fee is something that is just plain wrong.
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Anarchist
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78
It’s a bit like your bank saying that they know you have £40 in your account that you don’t want to spend, so in order to stop you spending it, we’ll charge you £0.50 per day until you put some more money in.
If I have an overdraft on the joint account and that goes to -£30 but mine and my wife’s main accounts each have £50 in I’d also not expect to be charged interest.
I kind of visualise it like a cutlery draw. I can just chuck everything in there, or I can buy one of those dividers (pots) to keep everything neat. There’s still the same amount of cutlery (money) in there, it’s just arranged differently.
In this world we’re penalised for keeping things organised.
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