Barclays imposes strict spending limits on prospects in ‘patronising’ transfer

Barclays prospects have been voicing their frustrations concerning the strict overdraft limits the financial institution has been implementing not too long ago, which has left many with a considerably decreased security internet – or with out one in any respect.

The financial institution has stated it has been reviewing overdraft limits since 2021 and solely contacts prospects if it deems their overdraft to be unaffordable.

In a variety of Twitter responses, the financial institution stated it “often” has to make the “difficult decision” to amend overdrafts to make sure “responsible” lending choices.

However, a lot of these dealing with new restrictions declare to have barely touched their overdrafts or have important quantities of cash held with the financial institution, leaving many questioning its motivations.

One buyer wrote to the Telegraph explaining that he had an above-average revenue with a “significant” sum of cash within the account, but his overdraft was nonetheless decreased from £3,200 to £490.

According to Christopher O’Hearn from Bishop Auckland in County Durham, the letter from Barclays learn: “We regularly review overdraft limits to make sure customers don’t borrow more than is manageable. Based on the income information we have, it looks like your limit might be higher than we’d offer if you applied for an overdraft today.”

Mr O’Hearn advised the Telegraph: “We have had the account for practically 30 years, and for the previous yr or so, there was a big steadiness within the account. The financial institution advised us they have been lowering the restrict so prospects don’t borrow greater than they’ll afford. And that if we don’t prefer it, we have to ship them statements from different accounts and proof of revenue.”

Twitter user @‌mrs_kwb wrote: “My bank wrote to me and said they were reducing my overdraft limit because they think I can’t afford the interest. Then they wrote to me and offered me a loan with a rate much higher. Good to see they are looking out for me. Bless Barclays Bank.”

@‌bruce1402 tweeted that his overdraft was removed because he hadn’t used it in the last 12 months.

He wrote: “The bank that likes to say NO. Been with them over 40 yrs and hardly ever needed my overdraft facility. Just when I’m about to need it they have decided to remove it. How is that helping consumers at this difficult time. [sic]

“Surprised that Barclays views those who regularly use an overdraft as a better risk than those who rarely use an overdraft!”

Meanwhile, user @‌sarahjpill said: “My father has banked with you for over 40 years ..as have I! He’s been told you are taking his overdraft away due to cost of living and amount of his income! I shall be helping him change banks … For me too! Letter is patronising.” [sic]

Express.co.uk has contacted Barclays for comment.

As defined by Barclays, an overdraft limit is a borrowing facility which allows people to borrow money through their current account. There are two types of overdrafts, arranged and unarranged.

It states: “An arranged overdraft is a pre-agreed limit, which lets you spend more money than you have in your current account. It can be a safety net to cover short-term outgoings, like an unexpected bill.”

People fall into an unarranged overdraft when they spend more money in their current account and have not agreed to an arranged limit in advance. In these instances, people are often charged interest depending on the amount of time they remain in it.

Barclays has also been criticised for its large spate of bank closures set to take place over the course of 2023 and 2024.

Up to 156 closures have been announced so far, which comes in response to more customers taking business online. See the full list of closures here.