Heya, things got a bit heated - so we’ve removed some posts.
Re-opening the thread now!
As a reminder, here’s our previous post offering some light on things:
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What I’d like to see is an option to lock/unlock a pot, or something along these lines, giving the account holder control over whether money from a pot can be used if the main balance goes below £0.
For example:
I’d like to be able to lock my “Bills” pot, making sure I’ll always have enough money to pay my bills.
I could then unlock my “Beer Money” pot signalling that this money should be used instead of the account going into it’s overdraft.
Maybe this is a bad example and I should lock my “Beer Money” pot too…
I’m a bit confused. If a user was using their overdraft, and something new came up on their credit report are Monzo saying that they wouldn’t cancel it?
If I had an overdraft I’d want some sort of certainty that it would remain in place. Like many people I would use an overdraft as an emergency fund so that unexpected expenses wouldn’t cause my DDs to bounce, this means that I would rarely if ever be actively using the overdraft, but I couldn’t have a main account with a bank without that facility (or with a bank that might randomly decide to remove it)
I also think Monzo should be far more transparent on the reasons they give for allowing / declining an overdraft. Presumably they have some sort of automated rules and I don’t see why they can’t tell the customer how these rules apply to them.
(Yes, I’m irritated that Monzo won’t give me an overdraft and that the generic reason given makes no sense whatsoever and they can’t tell me any more).
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I too have had my £1000 overdraft removed today. I received the same generic message about something on my credit file changing blah blah but nothing has changed. I wasn’t using the overdraft so I’m not bothered but I was genuinely looking to start using it as my main account in the coming months. That changes things.
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I think the non transparency bit is around the removal right away without much notice.
Other than that, any reasons why provided to us forums users would be a breach of data protection. It’s up to the individual to check their credit file for any potential impacts.
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I think you are right. Blaming a change on a credit file is just a cop out.
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How so?
If there has been new information on a persons credit report that results in them no longer being eligible for credit how is that a cop out?
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Because there isn’t anything new on my credit file.
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I think people are forgetting that one of the previous main reasons for a financial crash is because banks were lending to people that had RISK!!! written all over them.
They were not lending responsibly and the tax payer suffered because some banks had to be bailed out.
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Maybe the wording of the message should be tweaked? And the overdraft could be temporarily removed or blocked, but you could message COps to get it reinstated if you can explain your situation or why you may need it in the future?
I was just thinking about if the credit report change was genuine maybe giving notice would tip the user off to immediately withdraw/ take out as much as they were allowed or something like that? Don’t really know how this works since credit reporting companies love mysteries but I don’t think Monzo is allowed to comment on specific individuals publicly. I don’t really fancy speculating about this when neither side can talk about it/ casts doubts on their personal situation
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I have a £2,000 overdraft with Child’s (RBS) and a £500 one with First Direct. I have never used them ever but they are there in case something happens one month and I don’t get paid (that has happened once, the councils payment system collapsed so payroll was delayed a couple of days but I used my savings that time).
I haven’t switched my overdraft to Monzo yet and would be nervous to switch my overdrafts over to Monzo if they are arbitrarily removed if not used or I got credit elsewhere. I currently snooze credit cards which pushes my credit score down because I max the card through 0% money transfers to put it into savings. If Monzo removed my overdraft because of a change like this, I would be upset. What about a new mortgage? Will that kill the overdraft?
Monzo need to be more transparent with why instead of just blaming ‘credit reference agencies’. Monzo will have an overdraft policy, what in a customers report is telling Monzo to stop the overdraft? That is what Monzo needs to supply to the customer to be more transparent than regular banks as well as being ethical.
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I’ve never used my Monzo overdraft and gotten Paypay credit recently, yet no demand for the overdraft back yet.
Guessing what’s going to happen based on other people isn’t a great move. One guy on Reddit was moaning about his account being frozen - until the story unfolded that he had been doing dodgy money transfers for bitcoin. The user doesn’t always realise the problem.
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Maybe someone could rename this thread to something more appropriate like:
“Why was my overdraft withdrawn without advance warning”
I think the word ‘arbitrarily’ is prejudging things a bit isn’t it?
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Hey, I’ll try to address a few more questions.
The reason we removed the overdraft is due to us learning some new information about our users’ credit files.
That’s not what happened here @anon44204028, and it’s not the intention going forwards. We’ve received new information about these users from our Credit Reference Agency that means we can no longer offer them an overdraft.
Because these users haven’t used the overdraft we made a decision to remove the overdraft now without notice. We felt there was a low chance of causing financial difficulties. However, in our message we encouraged anyone that’s having financial trouble, or is worried that this change might put them into financial trouble, to let us know. We’ll do what we can to help.
Everyone affected by this decision can get in touch with Customer Service. We’re able to say what data we have from the Credit Reference Agency that led to this decision. If you feel that the data is incorrect, and you can’t see it reflected on your Noddle account, we’d really like to know so that we can investigate what’s happened.
We’ll get back to you with an answer to these, and try to make this clearer going forwards.
__
Again, I’m really sorry for the inconvenience. We’re trying to lend responsibly and treat everyone fairly! If this decision has put anyone into financial difficulties please get in touch with our Customer Service team through in-app chat and we’ll try our best to help.
Rich
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Because they can. The terms are “All overdrafts are available until further notice”. There is nothing stating that the withdrawal notice has to give a grace period.
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We know that Gareth but I just felt that more accurately reflected the thread content
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I don’t want to sound like a broken record but nothing has changed in my credit file.
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If the same situation happened to me what has been described, I would think it as arbitrary as I know I budget well and run a surplus every month yet I do things which can affect my credit report because I try to make more money through things like snoozing credit cards.
The point of my final paragraph anyway was that Monzo should explain to the customer, what the issue is with their credit report and discuss it with them. Not just using the credit file as an excuse generically when removing it.
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