I was checking my bank account online the other day I noticed this entry: ACCOUNT OVERDRAWN FEE 20-JULY-2018, with an amount $15 against it. I was not aware that I could, over draw the account involved. On checking my transaction, I noticed I had overdraw the account because I have mistakenly withdraw funds that I had scheduled, to transfer to that account, some months earlier, to cover a payment that are also scheduled some months earlier. That was my mistake. But I was under the impression if I had insufficient funds in the account, that the payment would simply not go through. The payment not going through thing, had happened previous times. I always noticed, this at the bottom of the screen, every time I made a payment: “If sufficient cleared funds aren’t available, the payment may not be processed”. However I never read it close enough, and have not noticed the word “may”.
After speaking to a number of people at the bank including my local bank manager and downloading and reading all the terms and conditions associated with my accounts I discovered that under certain circumstances, the account can be overdrawn and an overdrawn fees, plus interest at about 15% will be charged. However, what no-one at the bank was willing to tell me, was under what circumstances they will or not allow the account to be overdrawn. Apparently in the past, this decision was made by individual Bank managers but now it is completely automated. Somebody has had to put this automation into a computer program and the bank obviously do know the circumstances under which you can overdraw the account, but they are not willing to tell anybody what are circumstances are.
I asked, that it be set so that this account could not be overdraw. They said that was not possible.
So I'm in a situation where I cannot make the account so that it cannot be overdrawn, I do not know under what circumstances, the account will be allowed to be overdrawn or a payment will simply be refused, so if I make any mistakes I could be charged $15 plus interest. I'm sure most people are not aware such a situation can exist.
The bank involved is Westpac.
I have checked another bank, ANZ and they do have the facility to make it so that an account can not be overdrawn, but not is ALL circumstances. I dont no if they reveal under what circumstances a overdraw will be allowed or not.
I have yet to check out other Banks, but did find this web page: https://www.finder.com.au/bank-accounts-no-overdrawn-fees
But it does not indicate if the banks concerned disclose the circumstances under which they will or will not honor a payment.