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MSE News: Bank charges update: the phoenix from the flames + full Q&A
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unauthorised overdrafts? am low paid like most of the country i am forced to use a bank to get my wages now look at what we are talking about... unauthorised o/d's. When banks allow o/d's the term unauthorised should be nullified because the banks have authorised without consultation with the customer therefore should not charge customers a thing! Banks impose unauthorised overdrafts then fine people excessive ammounts after they have authorised the o/d's so what is going on !!!!!! why are banks allowing what they call unauthorised o/d's surely when they allow this then they are actually authorising the o/d's... am confused i want my money back and the supreme court 5 should be hung out to dry for this unjust decision agains the uk people. God help our justice system that has already lost its way0
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neilwjsimpson wrote: »How can you prove the selling price is unfair? I think the key will be in this:
“A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer.”
But, what is good faith? What imbalance of rights or obligations are we complaining about? I'll assume the answers will be to our detriment.
Not necessarily. There are two prongs to my suggestion...
Firstly, and separate to the UTCCR regulations the OFT has focused on there exists the Competition Act 1998.
Under Chapter 2 of this act, you can challenge prices on fairness grounds if one or more parties enjoy a dominant market position. They're called 'the big 4' because of their overwhelming market share, so they'd almost certainly qualify.
'Unfair' can mean many things, but one tried and tested legal concept in this regard is proportionality.
If these charges are adjudged to be disproportional to the prevalence, cost and benefit of the services provided, they may be deemed unfair.
The overall package price may be unfair in the way it is levied disproportionately on those that use the fewest, least costly services. I.e. those enjoying free banking use far more services than the unfortunates who subsidise their costs.
The Supreme Court ruling was that prices could not be assessed for fairness under the UTCCR, not any other legislation. The above is still a possible avenue for challenging the pricing of the banks 'packages' on the basis of fairness - banks do not operate under the normal competitive conditions that the UTCCR legislates for.
The second prong is the UTCCR Regulation 5(1) stipulation you quoted. This is the most likely avenue to be taken, yet less likely to result in refunds.
The most likely result of a successful Regulation 5 challenge is a change to the way future charges are affirmed by the customer. If the banks can show they are acting in good faith (by promoting good money management for example), the detriment suffered by the consumer isn't necessarily unfair.
I hope that either way the challenge is successful - it appears to be common sense that free banking subsidised by others' misfortune cannot be a fair status quo.0 -
:T Well said BFB; I couldn't agree with you more! Its great to read a viewpoint that doesn't gloat, nor judge on the misfortunes of others. I believe many people on these forums are mistakenly interpreting outrage at unfair bank charges, as an unwillingness to 'take responsibility' for 'personal debt'. I'm sure that the vast majority of 'right thinking' people, understand that for any business to function, there will be costs. That is not the issue; we object not to banks charging per se, but to the inappropriate and disproportionate charges incurred as and when they see fit. Often people get into a downward spiral through no fault of their own. Sometimes it is the very banks themselves that err, thus causing further hardship to the individual. As I said on one of my other posts, it isn't for anyone to sit smugly, being sanctimonious and judgmental when their own personal circumstances are good... if that is the case for anyone whose financial situ is as they wish, I say brilliant; that's great, hallelujah... its what we all aspire to... however, don't be so quick to condemn those who are in a bad situ; you don't know their situ or how they got there... besides which, when did 'God' die and put you in charge? Always remember, here for the grace of god go I as the saying goes. You never know what's around that corner. So, thank you to the author of the above posting for an intelligent and diplomatic truth. Best Wishes, Cat X:jThere is a whole range of ways that people can get into a cycle of these charges starting and mounting up with interest to unmanageable levels, this particularly following long term illness, loss of work and so on.
It is not a definite sign of !!!!lessness to be in that position- it may be it may not.
Everyone who uses bank accounts receives a service and it is not unreasonable to pay proportionately for that.
However it is not reasonable for these rotten disproportionate charges which are indiscriminate in their application often adding penury to misfortune to pay for those in credit to receive the service they use for nothing.
It ill behoves those who benefit from the misfortunes of those whom the banks have been hammering with these charge by getting a free servcie to pontificate to those who have suffered from them.
No-one knows about the resaons why another may have got into the cycle of these charges. Accordingly it is foolish to make sweeping generalised statements coindemning those who have incurred charges
The judge today certainly hinted to the OFT to go ahead other ways indicating that the pursuit of these charges should go on. The reference to narrowness of the case also indicated this.
Remember banks are like people far from infallible. For example I have been offered a refund on a ppi including return of the interest paid on an "apr/Aer" basis i.e. a return of compound interest- the bank cannot calculate it doing their calculations on a simple basis, this inability to do the sums is nonsensical
This is not the end or ultimate victory for the the banks or the bile-mongers - the oft and fsa must go on to ensure that the law is applied. as intended
bfb0 -
The case centered around whether the OFT could deem the charges unfair under existing consumer-protection rules. The court wasn't deciding on fairness, but on whether the rules could be applied to these particular types of charges.
Actually when we say it could imply end of free banking, inadvertently we admit we've been coolly living off poor people paying off the charges. So all these advise on asking them to be responsible is not exactly on top of our agenda, is it? I don't mind paying for banking services, if it would help them from their state of perpetual debt. But apparently U.K. Banks Get Double Boost.The U.K. Supreme Court's ruling in favor of some of Britain's biggest banks in a long-running dispute over overdraft charges was certainly an unexpected victory for the sector. But it may turn out to be an even bigger bonus than it first appears, particularly if the ruling makes it even harder for new entrants to the U.K. banking sector to compete.
At stake were the punitive charges banks make for unauthorized overdrafts - charges the Office for Fair Trading, the U.K. consumer watchdog, argued are unfair. Two lower courts had already ruled against the banks, which included Royal Bank of Scotland, Lloyds Banking Group and Barclays. If they had lost again, the banks would lose around GBP2.6 billion in annual revenues. In response, they were expected to start charging for current accounts, ending the U.K.'s practice of "free if in credit" banking.
The court's unanimous ruling - on the narrow grounds the charges are part of an explicit contract with customers, rather than because the judges believed the charges fair - means free banking will continue. That's great news for the banks bringing the case which between them provide 90% of U.K. current accounts, since it makes their dominant positions in the U.K.'s heavily concentrated market even more impregnable.
Free banking was introduced to the U.K. when interest rates were over 10% and banks were happy to sacrifice some of their fat margins on interest charges. But as interest rates fell, this perk has taken its toll on U.K. bank margins, which are now among the skinniest in the world. With interest rates at 0.5%, it will be virtually impossible for new entrants to compete on price. They will have to compete on service, despite years of evidence that U.K. customers are extraordinarily reluctant to switch banks despite appalling service.
That's a blow for the U.K. government, given its recent much-trumpeted - and wildly overblown - plans to boost competition by forcing RBS and Lloyds to sell branches. It was already hard to see who might be the buyers, given the pitifully small market shares on offer. Of course, it is still open to parliament to outlaw overdraft charges, but, as one judge pointed out, that would penalize the many customers who don't go into debt.
If the government seriously believed in competition, it should have demanded a far more radical shake-up of the U.K. banking sector when it had the chance.0 -
neilwjsimpson wrote: »No smart alec comments please. If you manage your finances well and have no problem with bank charges, why are you reading this. Find a hobby, or a job.
Would not advice from people who do manage their finances well be more useful than a load of wailing about how unfair it all is?
Just an observation.0 -
The case centered around whether the OFT could deem the charges unfair under existing consumer-protection rules. The court wasn't deciding on fairness, but on whether the rules could be applied to these particular types of charges.
Actually when we say it could imply end of free banking, inadvertently we admit we've been coolly living off poor people paying off the charges. So all these advise on asking them to be responsible is not exactly on top of our agenda, is it? I don't mind paying for banking services, if it would help them from their state of perpetual debt. But apparently U.K. Banks Get Double Boost.
Your link to the press version of the judgement is very important.
Many many people think the banks have won full stop and that is clearly not the case. One thing i can not see is what people think of returned item fees where a DD is not paid due to enough money and was that looked at under the overdraft charges?
Banks in this country have lost complete and utter trust but they know there is nothing we can do about it as we have no where else to go.
I think we can trust that there are people looking through the judgement and there will be another way to get this charges back.
As for free banking, well my Business account is not free and it works just as a normal current account. The charges per month for using it are very very small and i think we should all pay our fair share for a service.0 -
Centium5000 wrote: »Not necessarily. There are two prongs to my suggestion...
Firstly, and separate to the UTCCR regulations the OFT has focused on there exists the Competition Act 1998.
Under Chapter 2 of this act, you can challenge prices on fairness grounds if one or more parties enjoy a dominant market position. They're called 'the big 4' because of their overwhelming market share, so they'd almost certainly qualify.
'Unfair' can mean many things, but one tried and tested legal concept in this regard is proportionality.
If these charges are adjudged to be disproportional to the prevalence, cost and benefit of the services provided, they may be deemed unfair.
The overall package price may be unfair in the way it is levied disproportionately on those that use the fewest, least costly services. I.e. those enjoying free banking use far more services than the unfortunates who subsidise their costs.
The Supreme Court ruling was that prices could not be assessed for fairness under the UTCCR, not any other legislation. The above is still a possible avenue for challenging the pricing of the banks 'packages' on the basis of fairness - banks do not operate under the normal competitive conditions that the UTCCR legislates for.
The second prong is the UTCCR Regulation 5(1) stipulation you quoted. This is the most likely avenue to be taken, yet less likely to result in refunds.
The most likely result of a successful Regulation 5 challenge is a change to the way future charges are affirmed by the customer. If the banks can show they are acting in good faith (by promoting good money management for example), the detriment suffered by the consumer isn't necessarily unfair.
I hope that either way the challenge is successful - it appears to be common sense that free banking subsidised by others' misfortune cannot be a fair status quo.
Fantastic post. Very well put and i think many will agree with your thoughts on this. The only ones who will not agree are the ones who enjoy free banking at the cost of others.
Returned item fees...............are they different or looked at the same?0 -
Thanks Mr. Bournemouth
I think Returned Item fees could likewise be considered under the Competition Act as unfair (disproportional), but there would also be some mileage in the UTCCR Reg. 5(1).
In the Supreme Court ruling, these are explained as a charge for service on the basis that assessment has to be made regardless of whether a debit request is paid or not.
However, the bank has complete authority in deciding to pay or not pay, hence whether this charge is incurred,whereas the customer has no equivalent choice.
This would appear to be an unfair term according to Schedule 2, para 1(c) of the UTCCR which reads:
There are so many ways to skin this cat as it is so clearly unfair - the OFT just chose the least likely means unfortunately, and the cat is still free to chase mice.(c) making an agreement binding on the consumer whereas provision of services by the seller or supplier is subject to a condition whose realisation depends on his own will alone;0 -
The beginning of the end for these claims I'm afraid...
http://news.bbc.co.uk/1/hi/business/8382289.stm
Lloyds Banking Group has said it will ask local courts to dismiss thousands of overdraft cases lodged against it for the return of overdraft fees. The claims have been on hold since July 2007 when a group of banks and the Office of Fair Trading started a test case over the fairness of bank charges.
However, the Supreme Court ruled this week that the OFT does not have the power to decide if they are fair.
Lloyds Banking Group includes both Lloyds TSB and HBOS banks
"As the judgement concludes the test case, the FSA [Financial Services Authority] has agreed that these complaints should no longer remain on hold," said a statement on the websites of both Lloyds TSB and HBOS.
"This means that for those customers who currently have an outstanding complaint about unarranged overdrafts, we'll be writing to them shortly to let them know what today's judgment means for them.
"We be asking the County and Sheriff Courts to apply the Supreme Court judgement to dismiss any claims they currently have on hold," it added.0 -
The beginning of the end for these claims I'm afraid...
http://news.bbc.co.uk/1/hi/business/8382289.stm
Lloyds Banking Group has said it will ask local courts to dismiss thousands of overdraft cases lodged against it for the return of overdraft fees. The claims have been on hold since July 2007 when a group of banks and the Office of Fair Trading started a test case over the fairness of bank charges.
However, the Supreme Court ruled this week that the OFT does not have the power to decide if they are fair.
Lloyds Banking Group includes both Lloyds TSB and HBOS banks
"As the judgement concludes the test case, the FSA [Financial Services Authority] has agreed that these complaints should no longer remain on hold," said a statement on the websites of both Lloyds TSB and HBOS.
"This means that for those customers who currently have an outstanding complaint about unarranged overdrafts, we'll be writing to them shortly to let them know what today's judgment means for them.
"We be asking the County and Sheriff Courts to apply the Supreme Court judgement to dismiss any claims they currently have on hold," it added.
Maybe the end for claims under the current particulars, but certainly not the end of claims.
I feel really sorry for those who dismiss threads and posts on the subject of complaining under different terms, under advice given from the Supreme Court. They don't know how silly they look spouting the same drivel without reading other posts. Free banking is still under threat :rolleyes:0
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