Bank Charges - illegal?

ethank

I opened my account at Lloyds TSB in January 2003. After 3 months I was given a £500 overdrafty. By February 2004 I was sick and tired of the fees accruing on this account (£360 in three months). After a row with the Personal Banker in the Branch, I thought I would change banks. I phoned them up telling them what I was going to do, and cancelled all my Direct debits. I opened up an account with HSBC, and contacted all my creditors, and arranged DD's for new account.

I left the account overdrawn but within my limit, and whenever any charges or fees/intrest was added I paid in to the account.

I moved in July 2004 (My partner was made redundant, and we nearly went bankrupt due to the loss of income, landlord evicted us, we had to move back to Mum & Dad's), and wrote to the bank to advise them that I was moving. I contacted the Branch three days later, as I had no response. They did not confirm or deny they had received the letter, but told me that the sent all correspondence to their service centre in Bangalore to be dealt with.

I applied for a loan in Dec 2005, and was declined. I only got my mortgage last year so a bit suprised got my file though checkmyfile.com.
Lloyds TSB had defaulted my account for £1036.00

After some correspondence with the Bank, it appears that two direct debits were set up on the account in December 2004. One for a company I have never heard of, and the other for BT. I did have a BT account once, but this was cancelled in July 2004 when I was evicted. I made sure that the BT bill was repaid in full.

As I was living at Mums at the time, I had no utility bills. Lloyds TSB are insisting that I did set up a Direct Debit on this account, even though I can prove I was paying DD's for all my bills through my account with HSBC. As a result of thes direct debits, I was charged an extra £375.00 in charges as well as debit interest etc etc.I told the bank that these Direct Debits were not mine. They have refused to take them off the account.

I also wrote using the letter in the libary about the penalty charges, and have they have not even responded to the points raised.

They have said the only way that they will take off the default record from Equifax is if I pay £750 settlement figure within 1 month, and that this is a goodwill gesture.

The total fees are now £735.00 plus there is a lot of debit interest on their. My difficulty is I am not sure what is OD interest , and what is the portion relating to the bank charges.

I have read the FAQ on this site, and undertsand the matter. It has become a bit complicated because of the £500 overdraft. Although there are charges that were in fact paid for, their are some charges that are rolled up in teh £500 overdraft which has not been repaid, and I didn't if I could take them to court for the full amount.

I do work with Employment Law and I have reasonable understanding of legislation & caselaw, but would welcome some info from the experts, to help me proceed further.

Thanks

Ethank

carlih1

Hi,

got an email yesterday morning from uswitch asking if you wanted to change bank accounts and offering a switch service.

they also put this!:-

Ever been sent a £30 penalty letter from your bank because you went 5p overdrawn? Then you will be delighted to hear the Office of Fair Trading has ordered banks and credit cards to reduce penalties for late paying or overdrawn customers, to a maximum of £15. Good news for customers, but we still need to shop around for a current account, before signing on the dotted line. Interest rates vary considerably, especially on overdrafts. Choose the wrong account and you could pay significantly more for your overdraft.


Any information from anyone about this??

carli x

seanparkin

I've had a partial result from Natwest.

To cut a long story short, I currently have an overdraft of £85 with natwest which I am closing. Natwest owe me £150 in fees (and £60 in interest they've charged on those fees I've asked for back), total £210.

Natwest have responded to my letter asking for these returned, saying that they have correctly applied the charges and are well within the law, but will write off the £85 overdraft as goodwill. I'm thinking I should push for the rest (£125).

I need to formulate a response I believe. Natwests letter goes along the lines of:

"thanks, apologies, etc.

Charges are fair, reasonable and applied correctly as per published tafiff. charges comply with all applicable laws and regulations.

OFT is in contact with natwest and credit card companies to discuss level of charges, but this is strictly limited to credit cards only.

Bank differs with my views and will not be refunding any of the charges

Gesture of goodwill, waive payment of £85 overdraft and close account with no further action."

Does anybody have any ideas on what I can include on my response?

Thanks again!

seanparkin

Looking into this further, I've spotted that there are a few people with similar results from Natwest, except more interesting,

The letters are practically identical. They obviously have a standard template that they now use in order to tackle this sort of enquiry.

Interesting.

dchurch24

carlih1 wrote:

Hi,

got an email yesterday morning from uswitch asking if you wanted to change bank accounts and offering a switch service.

they also put this!:-

Ever been sent a £30 penalty letter from your bank because you went 5p overdrawn? Then you will be delighted to hear the Office of Fair Trading has ordered banks and credit cards to reduce penalties for late paying or overdrawn customers, to a maximum of £15. Good news for customers, but we still need to shop around for a current account, before signing on the dotted line. Interest rates vary considerably, especially on overdrafts. Choose the wrong account and you could pay significantly more for your overdraft.


Any information from anyone about this??

carli x

It hasn't happened yet - and when it does the BAG will be doubling it's efforts.

IT DOES NOT COST £15 to bounce a cheque/dd etc... so the OFT will be acting illegally by setting a cap way over what the law says is lawfull.

They said at the BAG protest, that they would release a statement in a few weeks (actually 8 weeks) - but true to form, they have already informed the banks and credit card firms about what they are going to say.

Some consumer champion !- watch this space!

seanparkin

Yes,

My response was received on the 18th of March and they referred to this in their response.

Although they suggested that this is limited purely to credit card companies and not to banks/current accounts etc.

dchurch24

I think it might be - they have been deliberatly vague to the public, but extrememly chummy with the banks (and Ian Mullen).

It's a downright discrace if you ask me - the OFT is there to protect us, not side with it's rich mates.

Matlow

Recieved a letter of Smile today saying sorry they haven't been able to respond to my letter of 16th feb.
Says they are reviewing their charging policies and as soon as the executive body makes it's decision they will send me a full response.
They are sorry for the delay and hope to be in touch shortly,and if there is any delay they will be sure to let me know.

To top it all,also recieved a letter of Co-op saying if I didn't pay my outstanding arrears within ten days they will send a formal demand!!!!

What a load of tosh,same bank yet one side doesn't know what the other is doing.

Question is I sent them a letter on the 16th march saying I would be going to court if I didn't recieve payment of my charges within fourteen days,this makes me want to say stuff the fourteen days and do it now!!

Would this be allowable??

seanparkin

I'd leave the co-op for the full fourteen days, but I'd probably give smile a final demand for repayment before court action. Sounds like a fob off to me to delay you while they try and get their heads together.

And I'm sure its unlawful to chase debt that is being contested. Not that Natwest were bothered!

chaos5678

I've just posted about this in another thread, sorry, getting mixed up!
The bank action group is a brilliant site which has all the help and advice you need to reclaim bank charges, I've got a small amount already.
They have lawyers providing letter templates and other documents.