Bank Charges - illegal?

dchurch24

Sadly, I think that you are probably right.

Couple that with the fact that the Govt. has actively been encouraging benefits claimants to have their benefits paid into a bank directly which was predicated on the so-called 'free banking'. Take away the charges, and almost certainly the 'free banking' goes with them.

It does seem somewhat 'cartel' like when I have no choice how I am paid money that I haved earned. That invariably means it will be paid directly to a private bank. I have no choice but to lend them my money, for very little return.

All of the banks have these illegal charges written into their T&C's - it seems a very odd way for a 'civilised' society to go.

syfodyas

I also need some advice.

I bank with the natwest and have done so since 2001.
I have an overdratft on my current account, agreed limit is £600 - I have had difficulty and things have gone over by £689 in total. Mainly its been unpaid DD charges of £38 and then charges for going over my OD for £38 and then admin fees of £38 - its a snowball effect that has made things worse.
they even charged me £38 for a cheque for £2.50 which seemed to take two weeks to clear and I forgot about it.

I called the bank several times and they wont budge, they wont offer any reduction in these fees and refuse to refund me on these charges. They also refuse to increase my OD by an extra £200 so that I am within an official limit and can start paying the OD off .

How can I get some of my lost money back, because if in another 28 days time its still ove my agreed limit, I will be charged another £38 and an additional £40 if they send a letter.

I tried going into a branch, best they could offer me was a loan to pay that OD and charges off only. I dont want to get a loan.

sportbeth

May wrote:

Hi everyone, I recently posted a thread about my bank charges for unpaid direct debits. I was kindly advised that these were penalty charges that could not be added to my account and that I should write to the bank advising them that it was illegal. The Courts would not enforce Penalty charges. (https://www.bankchargeshell.co.uk)

I have written a letter to the bank concerned advising that they cannot enforce a penalty charge. However, the bank doesn't seem fazed.

Can anyone advise what I should do now? I don't really want to risk it with the Courts.

When I was in correspondance with the Woolwich, the first letter I wrote to them stated that I was aware of the illegalities of penalty charges (I had £800 in charges with them). They wrote back saying they were well within their rights, I then wrote back stating that they had broken the banking code by not helping me when my account fell in trouble and stating that I would be informing the Ombudsman and taking them to court to recover the charges. They then wrote back to me, not rolling over completely of course but telling me that "Under these circumstances" and "As a gesture of goodwill" they would refund the charges.

It might be worth sending a very critical letter highlighting the points of law you will be using in court to them to see if they will roll over. It would save you the court fee outlay initially, however from the bankchargeshell forum, it looks like anyone is yet to lose against a bank so you can only gain!

MarkyMarkD

dchurch24 wrote:

It does seem somewhat 'cartel' like when I have no choice how I am paid money that I haved earned. That invariably means it will be paid directly to a private bank. I have no choice but to lend them my money, for very little return.

You do write some rubbish.

It's your employer's choice to pay you by BACS - there's no law requiring them to do so, and to suggest there's any sort of "cartel" involved just suggests you don't understand the meaning of the word.

And if you want to be a neanderthal, you can withdraw your pay, on pay day, in cash and never lend the banks money for "very little" return.

In any case, it's only "very little" if you choose to bank with a duff bank. In any case, it's a higher rate of return than tucking those used £5 notes under your mattress.

dchurch24

Correct, it is my employers choice - not mine! After 1984 an employees right to choose how he/she received wages earned was lost.

there's no law requiring them to do so

...and at no point did I suggest that there was.

From the Oxford Dictionary:

Cartel:

1. A combination of independent business organizations formed to regulate production, pricing, and marketing of goods by the members.
2. A group of companies or countries acting together to control the supply and price of certain goods or services. Cartels are formed to produce higher profits than would ordinarily be earned.

...and this is exactly what I mean. The independent business organizations have officially, or unofficially agreed to charge people illegal charges by way of penalty for not having funds to pay DD's etc... and thus increasing ALL of their profits.

I respectfully suggest that perhaps it is you that doesn't understand the word.

And if you want to be a neanderthal, you can withdraw your pay, on pay day, in cash and never lend the banks money for "very little" return.

No, you're quite right. I'd rather get between 0.1% and 5% APR (that's APR!!) in return for being ripped off, not being able to get to my money when I want, and for the priviledge of paying to get my money from the majority of cashpoints.

Oh, and for 'security reasons' I am not allowed to access any more than £300 of MY OWN MONEY in any one day.

You carry on. After reading some of your other posts, can I assume you work for a bank?

Syfodyas: Read my other posts on how to recover your charges.

May

Thanks for the input everyone. I've had a reply from my bank
The gentelman that written back has advised the following........

'..... My understanding of your complaint is that the chrages applied to your account are not enforceable by law. If this is not the case, please let me know'

' To be excessive or unfair, bank charges must be punitive in terms of the law. Having sought clarification from our legal and banking products department, I can confirm we base our charges on a genuine pre-estimate of our our loss and as such are legally enforceable. Therefore I am unable to agree to your request for a refund of all charges applied to your account.'

So, the kind gentleman has advised that he can provide details of the Financial Ombudsman if I am not happy.

And what does pre-estimate of loss mean?

Any thoughts or advice from anyone? I might just write back and inform them I going to the courts and add in my own 'pre-estimate' of costs!

sportbeth

psymonj wrote:

While I cannot claim to be the best at managing my money, I have been trying like crazy to catch up with finances, I got married a few months ago and want to apply for a mortgage.

I currently use the services of the Woolwich, until I started earning a proper, full-time, wage, there was no problem.

Without boring you all with the full-history; At a point, I was overdrawn and as such had to pay a fee. The first thing that irritated me was the fact that the Woolich will not allow me to have an overdraft of any limit, nor can I access funds (I cannot withdraw £10 if I have £9.89 in my account).
Recently, I have had a lot of expenses to cover - motor repairs, crimbo presents and moving house - all while paying off a loan, rent, credit card - the usual.

It is irritating enough to have no money available, it is insulting that the Woolwich should charge me £30 for being £1 overdrawn.
Today has taken the biscuit! Already £120 overdrawn (4 bounces), they allowed a DD to go through for £2.81 (delayed Paypal payment), and there is an £85 unauthorised overdraft fee bolted on. Last month, due to illness, I was short on my wages and as such had 10 payments bounce (crimbo shopping - Ebay), while i recognise I need to pay more attention to finances, I find £300 to say 'no' extortionate.

Why, when I have NO overdraft facility, do/can my account do this?
I am not up on this sort of thing, I am just tired of constantly doing everything on a shoestring just to make my account float.

If anyone can shed some light - I would be most grateful. I doubt very much that I could reclaim any of these fee's as primarily it is my poor management that leads to them, but I am being punished harder these days and it is making it harder to get on top. All the while, I am paying for the girl behind the counter to sit there and chat!

Thanks in advance!

I got my cash back from the woolwich. I didn't get paid and my employer went bust overnight. I then had £300 slapped on my account within about a month for unauthorised overdraft, daily interest and bounced direct debits. After 6 months of argueing that figure was at £821. Got the lot back after digging my heels in and still have my account with them

sportbeth

syfodyas wrote:

I also need some advice.

I bank with the natwest and have done so since 2001.
I have an overdratft on my current account, agreed limit is £600 - I have had difficulty and things have gone over by £689 in total. Mainly its been unpaid DD charges of £38 and then charges for going over my OD for £38 and then admin fees of £38 - its a snowball effect that has made things worse.
they even charged me £38 for a cheque for £2.50 which seemed to take two weeks to clear and I forgot about it.

I called the bank several times and they wont budge, they wont offer any reduction in these fees and refuse to refund me on these charges. They also refuse to increase my OD by an extra £200 so that I am within an official limit and can start paying the OD off .

How can I get some of my lost money back, because if in another 28 days time its still ove my agreed limit, I will be charged another £38 and an additional £40 if they send a letter.

I tried going into a branch, best they could offer me was a loan to pay that OD and charges off only. I dont want to get a loan.

IF your bank subscribes to the banking code, you can nail them on the part of the banking code that states that they will endeavour to do whatever they can to help you out if you suffer financial difficulty. (You will have to check for the exact paragraph reference) Offering you a loan is irresponsible and profiting further from your situation. If a bank breaks the banking code when you have approached them in financial difficulty and doesn't agree to stop adding charges, tell them it is a breach of the banking code and if you don't get a satisfactory response from them that you will be approaching the Financial ombudsman and the FSA who regulates them.

sportbeth

May wrote:

Thanks for the input everyone. I've had a reply from my bank
The gentelman that written back has advised the following........

'..... My understanding of your complaint is that the chrages applied to your account are not enforceable by law. If this is not the case, please let me know'

' To be excessive or unfair, bank charges must be punitive in terms of the law. Having sought clarification from our legal and banking products department, I can confirm we base our charges on a genuine pre-estimate of our our loss and as such are legally enforceable. Therefore I am unable to agree to your request for a refund of all charges applied to your account.'

So, the kind gentleman has advised that he can provide details of the Financial Ombudsman if I am not happy.

And what does pre-estimate of loss mean?

Any thoughts or advice from anyone? I might just write back and inform them I going to the courts and add in my own 'pre-estimate' of costs!

Pre-estimate of loss is what they lose if your direct debit bounces for example. E.g. you bounce a payment for £4, they charge you £30 for sending out a letter that is computer generated and a stamp for 27p. Genuine? I think not! This is why the charges are unenforceable. There is no human interaction at this stage for a letter and so the bank cannot argue the time taken by their staff etc.

I'd go back saying you are adamant that you want the charges refunded because of X, Y and Z and say that they have 14 days to respond prior to taking them to court. They will either roll over and pay, or start on a battle of wills saying to take them to court.

Once the court papers are in, they will ask for 28 days to make you sweat then they will pay up before judgement.

westernpromise

May,

All this amounts to is a restatement of their claim that these charges are legal, so it doesn't move things any further forward.

I'd write something like this back:-

Thank you for your reply.

I can see you are trying to help, for which I thank you, and I am anxious to resolve this matter amicably and rapidly too. With that in mind, I would be grateful if you could provide me with the details of the analysis you alluded to, wherein the bank worked out in advance its loss on sending out computer-generated standard letters. If this included an indication of when the analysis was done, by whom, and for what purpose, that would be helpful too.

The reason I ask for this is that I feel strongly that I have been unfairly treated. I have had substantial sums of money removed from my account and these sums have created a pretext for the removal of further sums. So I am giving serious thought to recovery of these deductions through the small claims court.

If the bank has a detailed analysis of where these charges come from, it will have to produce that analysis in court in due course anyway, in defence of my contemplated claim. You may as well produce it now, so I can take an informed view of whether there is any merit in your claim that these are not illegal penalties, but properly-costed incremental expenses incurred by the bank. If so, I expect to find that these costs have been accurately calculated by a bank economist, rather than guessed at by an inhouse lawyer.

One way or another, this would clearly assist me to decide whether to proceed with a claim, which neither of us wants. I am reluctant to proceed with your suggested route via the Financial Ombudsman, since it is my intention that the manner in which this matter is resolved should set a precedent which can be invoked in the event of further such charges in the future. I understand that the Ombudsman's decisions are not binding in this way and therefore would not address the wider picture.

Love

May