Posted May 6, 2011 by Simon in News

HSBC to Introduce Overdraft Text Alerts

HSBC are planning on providing a new text message alert service next month for all of it’s customers who currently have some form of overdraft facility.  When released in June 2011, this service will act as a warning system for customers who are nearing their overdraft limit.

The service is free to setup on your account, and provides an additional layer on top of the HSBC’s unique fee waiver policy.

This is part of a drive by HSBC to provide their customers with initiatives that can help them from straying outside of their overdraft limits, and ultimately paying less or no fees. They are also contacting customers who pay overdraft charges in excess of £180, as a Pay Monthly current account that was introduced last year, has the additional benefit of not allowing customers to exceed a pre-agreed overdraft rate.

Mike Oliver, HSBC’s head of Current Accounts, commented:

“Introducing mobile phone text alerts will help the small proportion of our customers who sometimes exceed their borrowing limits, and offer peace of mind to those who don’t. However last year, as a result of successful initiatives such as ATM alerts, Pay Monthly Account’s introduction and our fee waivers policy, we saw a fifteen percent fall in occasions where customers broke their borrowing limit, and incurred a fee. We hope by adding text alerts even less customers will exceed their limits.”

As the name suggests though,  the Pay Monthly account will come at a cost of £15 per month, but the result is that you will never pay more than £180 each year in fees.

“HSBC’s Pay Monthly bank account will be an appropriate solution to many customers who regularly exceed their overdraft, but it’s essential we fully review each customer’s banking relationship with us. Without a change of behaviour, not allowing any accidental or unrequested overdraft breaches is likely to divert customers’ problems to utility suppliers and other bill payments.”

HSBC’s ATM’s are also the the only ones at the moment that warn customers before they withdraw cash, that doing so will exceed their overdraft, and thus incurs charges.