Bank Charges - illegal?

dchurch24

exil wrote:

So who do you want to pay for the work the bank does on your account? The people who are in credit? Or for the bank to do it for nothing?

Of course charges are rather more than the actual costs incurred by the bank, so could be seen as "penalties" rather than "charges". However they are in the contract you have with the bank. You might win your case about Unfair Terms - but don't count on it!

The bank will find it extremely easy to fulfil your DPA request - and are ENTITLED TO CHARGE YOU FOR THIS!!!!!

They are entitled to charge a maximum of £10 as per the information commissioners rules.

>> So who do you want to pay for the work the bank does on your account?

Do you think that banks would go out of business if they DIDN'T make these charges?

If any other business cannot make a profit AND stay operating within the law, then they would go bust. Why should this be different for banks?

Personally I don't see that happening. Every bank user lends the bank money, which in turn, it lends to others at a much higher interest rate than it is paying for it. You might hazard a guess that they make profits that way. Profits are what pays for their services. No-one is suggesting that they provide these 'services' for free. In A&L's cheque clearing account, there is at any one time £2 billion pounds - I think that would mean that they have a rolling 2 billion pounds to invest in ways that increase their profits. This is what pays for the 'services', and so it should. that 2 billion pounds is not theirs, it is ours. If they make money out of our money, then of course the automated 'services' should be free to us.

They call it 'free banking' when it is no such thing. Do I get 'free' insurance handling from my insurers, do I just pay the premium for the cover, or am I also paying for someone to administer my insurance/handle claims/send renewal invites etc...?

I would guess that there is a lot more work involved in insurance than personal banking - yet we get that work for 'free'. Money goes into a bank account and money comes out. The whole process is automated, wheras the insurance industry sends adjudicators etc... to handle claims etc...
Don't get me wrong, I am no fan of the insurance industry - I'm not a fan of 'pin-striped-gambling' - but they don't penalise people least able to afford it to provide over-blown, year-on-year profit increases for their shareholders.

>> You might win your case about Unfair Terms - but don't count on it!

I would say - DO count on it. The banks DO NOT want this to get to a court room. There are so many laws which make this practice illegal there is very, very little hope of them winning a case; and they know it. This is the reason they pay up. If there was a win in a county court, it would pave the way for someone to take this to a higher court and thus create a legal precedent - which would in-turn stop them making punitive charges once and for all. It's a nice little earner for them, so long as the law doesn't get tested. They will ensure at all costs that it doesn't.

dchurch24

carled wrote:

I can see how some people reading this forum may think that the case is that the supporters are knowingly and wantonly running up charges by poor cash management then asking for refunds or something... it's not really the case.

...but the point is that (as you already mentioned), it wouldn't matter if they were wantonly and knowingly running up charges. The fact that they are applied at all and are punitive in nature, makes them unenforcable in English (and many other countries) law.

mountainofdebt

Can anyone tell me where I should send my letter asking for the charges to be refunded - should it be to the branch or should it be to the bank's registered address - talking about natwest here

uberzoldat

Hello all.

I have been reading this thread with increasing interest (no pun intended) for some time now. My partner has had many troubles with his bank for the past few years now, and has been corresponding with the financial ombudsman service recently, although unfortunately there doesn't seem to be much progress being made.

I happened upon this site searching for like-minded people who have also had trouble with their banks and what to do about charges, and unfair treatment etc.

He calculates the amount now owed to him by the bank being in the region of £18,000.

I have read over half of this thread and am currently plodding through the rest, though it seems to be increasing by the day :-)

I wonder if anybody could offer some advice for our situation? From what I have read so far, I am unsure whether recovery of such an amount could be as simple as recovering smaller amounts.

Any advice on this would be very gratefully received.

Thanks in advance.

westernpromise

exil wrote:

Of course charges are rather more than the actual costs incurred by the bank, so could be seen as "penalties" rather than "charges". However they are in the contract you have with the bank.

If the contract said you had to cut off a finger every time you exceeded your overdraft limit, and you signed this because all banks impose the same contract so you had no choice, would you do it?

regularsaver1

some times its the direct debit companies faults - they are aware of the situation, but they still reapply - making the bank apply a fee

like a circle

dchurch24

uberzoldat: You are right to assume that 18k is a different story.

If the amount claimed is under 5k, then the likelyhood of them being awarded costs should you lose is very slim.
However, I believe that you wouldn't lose. That said, the banks, when faced with a demand for a claim over 5k would very likely throw every legal resource they have at it, for to lose a claim of that type and not in the small claim court would be disasterous for them.

My advice (and it is only my opinion) is to sue for smaller lots of 5k at a time.

Over how many years have these charges been accumalating - if it's more than 6, then you probably wouldn't be able to claim them back legally anyway, sadly.

Check out the https://www.bankactiongroup.com site, there are people in there who are better advised to offer advice on this matter.


mountainofdebt: It doesn't matter where you send it - all branches are registered offices, so you can send them there - I generally send it to the branch, as they probably don't know what to do with it.

fagun

westernpromise wrote:

If the contract said you had to cut off a finger every time you exceeded your overdraft limit, and you signed this because all banks impose the same contract so you had no choice, would you do it?

There is a piece of legislation called the Unfair Contract Terms Act. Obviously parliament recognised that consumers did not have control over all contract terms, and that companies could draft "unfair" terms.

Of course you have to argue your case if the firm disagrees. Two choices - either the Financial Ombudsman Scheme or the Courts.

carlih1

Hi

is this the clause from the unfair contract act that relates to the bank?

Unreasonable indemnity clauses

1. A person dealing as consumer cannot by reference to any contract term be made to indemnify another person (whether a party to the contract or not) in respect of liability that may be incurred by the other for negligence or breach of contract, except in so far as the contract term satisfies the requirement of reasonableness.
2. This section applies whether the liability in question—
a. is directly that of the person to be indemnified or is incurred by him vicariously;
b. is to the person dealing as consumer or to someone else.

Carli

fagun

No, a charge is not an indemnity. FSA Consumer website has some information on UCTA - but its a bit hidden, so its easiest to do a search. Otherwise, the Govanlawcentre (the link is is a post a few pages back) letter has the relevant case law.

You don't need to quote the exact bit of UCTA. Just state that you think the charge is unfair under UCTA.