what is a "fair" unpaid Direct Debit charge?

Smasher

willo65 wrote: »

Why?

It costs Tesco about 7p for a tin of beans but they charge me 21p not 7p.

If you don't have 21p, you don't get any beans. Tesco won't force you to take the beans, then put their hand in your pocket and take £35 for them next time you have some money..

proeleche

Sol00 wrote: »

Again, you are ignoring the point I and others have made.

If we use your 'argument', and Tesco charge 3 times the price for beans, then yes they are doing what any business does and is making a profit.

If however, I went into Tesco and accidentally or otherwise broke a display shelf, Tesco would charge me the cost to repair or replace the shelf and would not make a profit from this.

The banks make their profit from deposits, higher end current accounts that charge monthly premiums, people using their overdrafts, loans, credit cards etc. and no one is arguing this as these are their products to make their profit. The charges for going over your limit or bouncing a chq is the only point being argued due to the amounts of the charges. The analogy I used above can be applied here as the customer has 'damaged' their account.

I don't see what's hard to understand about this, it's been plastered all over this site for years, and the is on the news regularly.

I totally agree and I think the point that the customer has 'damaged' is an excellent way to illustrate the whole point.

proeleche

Nathan_Spleen wrote: »

It's worth pointing out that Justice Smith ruled Natwest's T&C's were not incapable of being penal. He did indeed point out that the banks didn't advertise their default fees and this went some way to influence his judgment that unauthorised overdraft charges did not form the core part of the contract and therefore should be assessed for fairness under UTCCR.

But he didn't turn around and say they were - which I really believe he should have done.

natweststaffmember

proeleche wrote: »

But he didn't turn around and say they were - which I really believe he should have done.

I don't think the OFT were asking for a declaration that they were penalties. The Banks were asking for a declaration that they weren't,

http://www.oft.gov.uk/advice_and_resources/resource_base/market-studies/current/personal/personal-test-case/personal-documents
The above link is to the documents of the OFT test case. I think the one you need is January

posted_2

proeleche wrote: »

it is the consumer's choice to pay that 21p or not.

It is the consumers choice to open a bank account knowing the terms of the bank account, and not run it in credit. If you don't want to pay 21p for your beans, don't write cheques for money you don't have.

If your bank charges reduce and get written off, which charge or tax would you like them to replace it with?

Nathan_Spleen

proeleche wrote: »

But he didn't turn around and say they were - which I really believe he should have done.

He didn't ''turn round'' and say they were because he wasn't in a position to, it was not in his remit. The banks asked him to make a declaration on whether the terms were capable of being penal and that is what he did.

The fact that the terms can be assessed for fairness renders the penalty argument superfluous.

natweststaffmember

posted wrote: »

It is the consumers choice to open a bank account knowing the terms of the bank account, and not run it in credit. If you don't want to pay 21p for your beans, don't write cheques for money you don't have.

If your bank charges reduce and get written off, which charge or tax would you like them to replace it with?

I would expect certain bank charges to disappear, some charges to be cut, and furthermore, overdraft interest to be upped.

proeleche

natweststaffmember wrote: »

I don't think the OFT were asking for a declaration that they were penalties. The Banks were asking for a declaration that they weren't,

http://www.oft.gov.uk/advice_and_resources/resource_base/market-studies/current/personal/personal-test-case/personal-documents
The above link is to the documents of the OFT test case. I think the one you need is January

Eh? January?,

Not to be rude or anything but it's a Sunday and I'm not in law school anymore so I won't be reading any cases today and reading judgements in huge amounts of detail :-P

From memory, the OFT's initial look/investigation basically implied/stated that bank charges were probably penalties at common law. In addition, the basis for a lot of the original refunds before the freeze and court case was that they were unfair and penalties at common law.

If the first instance judge ruled that they were, I think all of this would be over a lot faster. Instead, it's all happening in a round about way where first, it has to be decided whether they can be governed under the unfair contract terms, then the oft will say they are unfair, and then that will be challenged.

I don't want a big debate with anyone, all I'm basically saying is that it's all happening in a round about way and the banks have been lucky that the courts have not just turned round and said they were penalties at common law - when in my mind they quite clearly are.

Nathan_Spleen

posted wrote: »

It is the consumers choice to open a bank account knowing the terms of the bank account

But it's not a matter of consumer choice as in most cases You HAVE to have a bank account to process you salary or benefits and as such personal banking is a utility and should be regulated as one. This is why the beans analogy doesn't stand up.

proeleche

posted wrote: »

It is the consumers choice to open a bank account knowing the terms of the bank account, and not run it in credit. If you don't want to pay 21p for your beans, don't write cheques for money you don't have.

If your bank charges reduce and get written off, which charge or tax would you like them to replace it with?

Has this person actually read any of this forum. If they had they would realise this point has been answered 10 times over.

The banks don't advertise it and so on. Read the forum.

As i have already staed many times - people should pay what it actually costs and a rate of interest of any unauthorised borrowing and all of this should be made clearer than clear at the outset to the customer so they are in absolutely no doubt.