Bank Charges - illegal?

Victors_Bruvver

inmypocketnottheirs wrote:

Thought the same :rotfl:

I am sorry if I upset both you & dchurch24 but I thought Martin's tip at the top of these forums states the following; "Remember there's no such thing as a stupid question, pls be nice to all MoneySavers"

Some of us cannot all be as sharp or as well informed (or even sarcastic) as the regular contributors - or do you both think that that should be prerequisite for posting to the forums?

Tim_L

dchurch24 wrote:

It won't stop current claims 'at risk' - you can ask him yourself if you like - he's a moderator in the BAG forum.

Yes it will I'm afraid. Banks are currently settling out of court because they don't want a precedent to be set if they pursue a case - although the County Court can't set precedents directly if they lost a case there, a loss would cause very widespread publicity and they would need to appeal to higher courts. At present there are very small numbers of people claiming these charges back and so there's a simple cost/benefit equation.

If a major court case is used to try to set a precedent, banks will be faced with massive repayment liabilities and they will fight the case very hard indeed. While this is going on, if anyone takes county court action against them they will have a simple task to have the cases adjourned pending resolution of the test case.

This is a very misguided action indeed and has more I think to do with testosterone than logic, i.e. an attempt to rub the banks' noses in it to demonstrate that the BAG have the upper hand over the 'evil' banks. There is absolutely no need for it either, since refunds are currently being paid.

It's not clear to me that being a moderator in the BAG forum provides anyone with infallible judgement. I think on balance such a case could eventually be winnable, but there are plenty of ways of delaying the outcome for years, racking up costs massively, and ultimately making it very tricky to follow through. A loss would be absolutely disasterous.

It is quite simply tactically and strategically absolutely the wrong thing to do. I wish that those involved would see some sort of sense, but I feel that they are now so carried away with a vision of dealing a body blow to the banking industry that no amount of logic or common sense will stop them. Very sad.

dchurch24

Victors_Bruvver wrote:

I am sorry if I upset both you & dchurch24 but I thought Martin's tip at the top of these forums states the following; "Remember there's no such thing as a stupid question, pls be nice to all MoneySavers"

Some of us cannot all be as sharp or as well informed (or even sarcastic) as the regular contributors - or do you both think that that should be prerequisite for posting to the forums?

It was meant in jest - I didn't mean to offend you, sorry.

kaznelson

Tim_L wrote:

Yes it will I'm afraid. Banks are currently settling out of court because they don't want a precedent to be set if they pursue a case - although the County Court can't set precedents directly if they lost a case there, a loss would cause very widespread publicity and they would need to appeal to higher courts. At present there are very small numbers of people claiming these charges back and so there's a simple cost/benefit equation.

If a major court case is used to try to set a precedent, banks will be faced with massive repayment liabilities and they will fight the case very hard indeed. While this is going on, if anyone takes county court action against them they will have a simple task to have the cases adjourned pending resolution of the test case.

This is a very misguided action indeed and has more I think to do with testosterone than logic, i.e. an attempt to rub the banks' noses in it to demonstrate that the BAG have the upper hand over the 'evil' banks. There is absolutely no need for it either, since refunds are currently being paid.

It's not clear to me that being a moderator in the BAG forum provides anyone with infallible judgement. I think on balance such a case could eventually be winnable, but there are plenty of ways of delaying the outcome for years, racking up costs massively, and ultimately making it very tricky to follow through. A loss would be absolutely disasterous.

It is quite simply tactically and strategically absolutely the wrong thing to do. I wish that those involved would see some sort of sense, but I feel that they are now so carried away with a vision of dealing a body blow to the banking industry that no amount of logic or common sense will stop them. Very sad.

I think the only "VERY SAD " thing about this is that the Banks feel that they can charge honest, hard-working people who are in difficult circumstances £25-£30 for sending out a computer generated letter.

Tim_L

Listen, I'm been one of the strongest advocates for the idea that people get these charges refunded, and I am on record as saying the charges are regressive and despicable because they affect those in marginal difficulty the most.

The fact of the matter is though that the attempt to force the issue via a high profile test case is simply the wrong thing to do, and as I say is more based on testosterone than sense.

With any risky enterprise you have to look at the possible downsides and measure them against the benefits to see if it's worthwhile.

The potential benefit is that the charges are declared illegal and everyone can claim them back. However the current situation is that the charges are not being defended in court, so there is little practical difference. Basically there is no significant upside to the action being taken.

The downside risks are (1) the courts find in the banks' favour, either completely or partially. Probably unlikely, but possible in a long and complex case (2) payments out of court are suspended until the case is resolved (3) the case becomes so long and costly that it is impossible to sustain and so falls, in which case the banks have a good reply to anyone else asking for a refund, which is to allow the case to continue and fight it all the way, knowing that someone will have very visibly lost a lot of money fighting it the last time.

As I say, faced with refunds of billions of pounds, fighting this case for a few hundred thousand is an absolute no-brainer for the banks. Thus the downside scenario is extremely likely.

No significant upside, big and probable potential downside = no bet, at least in my book.

It's an unfortunate tendancy with activists to try to push things a little further than they ought to be pushed. Anyone with any influence on the person trying to press this case should really try to point all of this out as forcibly as possible in my view and attempt to stop the proceedings.

dchurch24

Tim_L wrote:

Yes it will I'm afraid. Banks are currently settling out of court because they don't want a precedent to be set if they pursue a case - although the County Court can't set precedents directly if they lost a case there, a loss would cause very widespread publicity and they would need to appeal to higher courts. At present there are very small numbers of people claiming these charges back and so there's a simple cost/benefit equation.

If a major court case is used to try to set a precedent, banks will be faced with massive repayment liabilities and they will fight the case very hard indeed. While this is going on, if anyone takes county court action against them they will have a simple task to have the cases adjourned pending resolution of the test case.

This is a very misguided action indeed and has more I think to do with testosterone than logic, i.e. an attempt to rub the banks' noses in it to demonstrate that the BAG have the upper hand over the 'evil' banks. There is absolutely no need for it either, since refunds are currently being paid.

It's not clear to me that being a moderator in the BAG forum provides anyone with infallible judgement. I think on balance such a case could eventually be winnable, but there are plenty of ways of delaying the outcome for years, racking up costs massively, and ultimately making it very tricky to follow through. A loss would be absolutely disasterous.

It is quite simply tactically and strategically absolutely the wrong thing to do. I wish that those involved would see some sort of sense, but I feel that they are now so carried away with a vision of dealing a body blow to the banking industry that no amount of logic or common sense will stop them. Very sad.

May I just point out here, that Stephen is taking this action off of his own back - he has nothing to do with The Bank Action Group other than the fact that he is a moderator in the forum. His actions are his own, and while the BAG wish him luck, this should not be seen as an endorsement of his actions.
Indeed, The Bank Action Group share some of your concerns.

However, by your reckoning, does this case suddenly negate the other test cases regarding punitive charging, dating back to 1896 - the first I can find?

Why would judgement be set aside on a simple legal issue where precedents have already been set, just because another case is going on somewhere else?

When Gary Clay took Nationwide to court, the courts did not wait to see the outcome of my case against Abbey, I do not see the difference between that and what Stephen is doing.

There is absolutely no need for it either, since refunds are currently being paid.

I would have to disagree - there is a need for it - as you say, currently there are very few cases against the banks - this is because the vast majority of people who are being charged think that this is legal - they think because 'The Bank' is doing it, then it must be legally entitled to do so.

To get a ruling once and for all and hopefully putting a stop to these types of charges can only be a good thing for those people.

Frugal_Fox

gothicf0rm wrote:

i have an overdraft with the halifax, the overdraft still exists despite having successfully sued them. i think this is because overdrafts are a good way of making money.

This is good news. Actually my situation is far worse than I thought, over the last 12 months Halifax has taken over 1500 from us, and whilst I certainly put my hand up and say yes I was overdrawn, and yes I did breach my terms and conditions - but how can they justify charging me £39 for paying an item via debit card - which they authorised, which took me over my limit, when the debit was for £4.50? If we hadn't of paid these bank charges at this level, and they had levied a lower - more releastic charge, we would not even have an overdraft now. Though we would not be as profitable for them - and I suspect that is the real crux of the matter.

I am on my way to 'phone them now :eek:

Frugal_Fox

dchurch24 wrote:

Sort of:

http://idigital.vm.bytemark.co.uk/bag/survey.php

This is a work in progress, so be kind :-)

dchurch24 - many thanks for this. I've had a look, and its making me a little more positive, even after reading Tims post! Anyway - enough procrastinating. I'm off to 'phone the Halifax :eek:

Tim_L

It's not a question of whether this case is winnable under English law - probably all things being equal it is, but this is not guaranteed.

It is a question of whether it is the right thing to do from a tactical and strategic viewpoint, and what the likely outcomes will be. The problem here is that Stephen is radically upping the stakes for the banks, and they will not just roll over, say "ok guv, it's a fair cop" and pay billions of pounds back. They can defend this action for years for a few hundred thousand, and their pockets are very deep.

Because this case specifically addresses the issue of bank charges - not contract law in general - it would be completely reasonable to adjourn any similar case in progress until it has been resolved so as to clarify the legal position. This is surely obvious? There is no reason why any case currently in progress should be settled in less time than the high profile test case, since at the limit it might have to follow the same route.

If you have a problem with wasps flying into your house, you can deal with them individually quite easily. However if you wade into their nest waving a stick, they will deal with you. This is essentially the situation this completely misguided court case is putting us into.

dchurch24

Fair point.

I have to say, that this would not have been the course I would have taken, or one that I am that happy about either.

It was our intention to keep pressure on the OFT - not to go gung-ho into the wasps nest as your excellent analogy put it.

Hopefully you realise that this was not a BAG inititive.

Although we do agree that it needs to be brought to a head - the banks will continue to rip people off, all the time they are 'allowed' to continue to break the law. We belive it is the remit of the OFT and not private individuals to do this.

EDIT: The more I think about it, the more I think you are right about a bank being able to ask for a cased to be 'stayed' while awaiting the outcome of this....although I doubt it would have any effect on a 'small claim'.