Dramatic court action against 8 UK banks

Tim_L

He may well win - we know the case is pretty sound - but the problem is a high profile test case simply allows the banks to delay any repayments at all until the final resolution, and it will take a great deal of time to work through.

The banks simply cannot afford not to fight this, and so they will fight it very hard indeed, using every tactic available including racking up massive costs. At some point it may simply be impossible to sustain the cost of the action and Stephen may be forced to pull out, which would be disasterous.

I really hope that someone points the problems out to Stephen before he does anything irrevocable, and that he decides not to follow this through. There is really no logic in taking on the banks head on when everyone so far is having their claims paid in full: doing so just turns a minor annoyance into a serious threat and will attract a much more concerted and dangerous response.

davilown

exil wrote:

He might have borrowed money from a bank to fund the court case....

LOL!!!

Beer monster

trickytrolleys

Is there an update on this yet please ?

innovate

Even if the banks lose (which they should if it was up to me), don't expect that they will simply give up on a revenue stream they, and their shareholders, have got used to.

They may well reduce or eliminate the excessive overdraft charges, but they will then simply look for substitute income. This could be in the form of a charges for bank accounts, transactions (cheques, payments, SOs, DDs etc) and cards.

Such charges are quite common elsewhere in the world. The free personal banking facilities we enjoy in the UK are an exception compared with the global banking market. Overall, charging for banking based on usage is probably a much fairer system. It is really quite surprising that UK banks aren't already doing this because they could most likely make significantly more money from this than from the overdraft charges. Watch this space.....

Mark7799

innovate wrote:

Even if the banks lose (which they should if it was up to me), don't expect that they will simply give up on a revenue stream they, and their shareholders, have got used to.

They may well reduce or eliminate the excessive overdraft charges, but they will then simply look for substitute income. This could be in the form of a charges for bank accounts, transactions (cheques, payments, SOs, DDs etc) and cards.

Such charges are quite common elsewhere in the world. The free personal banking facilities we enjoy in the UK are an exception compared with the global banking market. Overall, charging for banking based on usage is probably a much fairer system. It is really quite surprising that UK banks aren't already doing this because they could most likely make significantly more money from this than from the overdraft charges. Watch this space.....

This was the way most bank accounts were charged until the mid-1980's. Not popular with customers, hence the move to 'free if in credit' banking - firstly offered by the Co-op then Midland (as it was then) joined in and all the other banks followed suit shortly after. As regards charging for each transaction - this is still the case for business accounts on many packages with all banks - look at the small business and charity boards and see how many there are complaining about it.

chugalug

I find it hard to feel sorry for the banks. I know they are gracious enough to give us ordinary customers 'free' banking but don't be too grateful. Barclays has just posted a profit of billions. They all know that customers expect 'free' banking facilities so not one of them will withdraw this facility on their own. They would have to get together and withdraw 'en masse' and I'm sure the monopolies commission would have something to say about that. The trick is to draw customers in with free banking knowing that they don't have a choice now and then slam them for charges when they make a mistake. Most of us have learnt this the hard way!! Customers can get a lot out of the system as it is but make a mistake and you'll pay (and pay and pay!!)

innovate

I am not here to defend banks, I am just being realistic. There is no such thing as a free lunch in life, that's just a fact. Like it or not, the customer pays one way or the other - whether it's for a service from a bank or any other business. I am of the opinion that nobody has an issue with fair prices - it's the unfair overdraft charges that cause the outrage.

chugalug wrote:

Customers can get a lot out of the system as it is but make a mistake and you'll pay (and pay and pay!!)

LOL, this reminds me of my recent experience with A&L: one of their CS people told me twice that "if the bank makes a mistake, we can correct it. If the customer makes a mistakes, it cannot be corrected". That was the reason that I immediately proceeded to get all my A&L accounts closed. They then made a mistake and sent me a £50 cheque, which I instantly cashed

chugalug wrote:

They all know that customers expect 'free' banking facilities so not one of them will withdraw this facility on their own. They would have to get together and withdraw 'en masse' and I'm sure the monopolies commission would have something to say about that.

Just look at the T&Cs - didn't they effectively (but very cleverly) all get together on the overdraft charges, and has the MMC blinked an eyelid? I agree that none of them wants to be the first to withdraw free banking facilities across the board, but I think one of them will sooner or later be the first.

Just a small note on Barclays (I am not a friend of theirs, check the £100 loophole thread!): if I understand correctly, their profits stem mainly from their business services, not the retail ones. I believe their retail business actually declined (not surprisingly).

The_Boss

Fair enough - reduce the costs or return the money, but why should it 'restore the credit reputation' of loads of people?

These people didnt pay on time, and they should have it shown on their credit report that they are not particularly good at organising their finance.

Hopefully they will also refund me multiple amounts of £25 for always paying my accounts on time and never going over overdraft/credit limits etc.

Tim_L

They won't impose charges on transactions or a fee - they want to, and hence the move towards 'prestige' or premium accounts - but the UK banking market is far too competitive to allow this, which was well demonstrated by the furore over 'disloyalty' charging for ATM use. Current accounts are a loss leader allowing cross selling of more profitable products to the financially naive too.

In fact a perfectly fair way of charging people for unauthorised overdrafts is tiered interest rates with a steep increase at the problem level. Fix the problem quickly or go 20p overdrawn and it doesn't cost much. Do it habitually and it costs you enough to act as a discouragement.