Unenforceability

rigger_john

simon_templar wrote: »

As stated earlier your question is slanted to fit your line of argument. Please try this question instead -

A customer has £10 in their bank account. They have a direct debit to SKY for £45 due out the next day. They have no agreed overdraft with the bank. The direct debit goes out and they are £35 overdrawn. They did not ask to borrow that £35 they simply STOLE it.

The bank has the option to not honour the DD because of lack of funds. In the case you have just cited the bank has choosen to lend the money.

ILW

petermb wrote: »

I think in this instance, even the bank would treat the money as "Borrowed". That is what banks do, lend money and make a hansome profit on it.

Taking money for a product that does not work or is not fit for the purpose, now that is Stealing.

A balanced view is always best in all things.

I would suggest thet if you "borrow" something without asking then that is theft. If some little git came round in the middle of the night and "borrowed" your car I do not think you would be too happy.

rigger_john

ILW wrote: »

I would suggest thet if you "borrow" something without asking then that is theft. If some little git came round in the middle of the night and "borrowed" your car I do not think you would be too happy.

I would suggest it depends on intention, well as far as the law is concerned, that is why car thieves are rarely charged with theft, as the 'intention to permenantly deprive' an important element of theft is hard to prove.

Now when a bank makes an charge, there is a clear intention on the banks part to deprive the customer of that money, if it can be shown that the charge was unlawful, then the bank has committed theft.

It may well be that the bank has a moral right to charge, but that is not a question of law. As the law stands at the moment (english law), these charges are unlawful.

simon_templar_2

The bank charges are the price for borrowing money within unauthorized overdrafts. It is the price they charge for borrowing without asking, bouncing cheques and DD's etc. I dont think they are a 'fine' but merely the charge for a service. Just like an MOT at the local garage costs £40, borrowing off the bank can cost £35.

rigger_john

I would say that the price for borrowing is the interest, that is how the law seems to view it too. Again you may well be right from a moralistic point of view, but from a legal point of view you are just plain wrong. If you think I'm wrong then please illustrate your argument a little better, a garage does not charge you £40 for an MOT then add interest to that amount!

petermb_2

simon_templar wrote: »

The bank charges are the price for borrowing money within unauthorized overdrafts. It is the price they charge for borrowing without asking, bouncing cheques and DD's etc. I dont think they are a 'fine' but merely the charge for a service. Just like an MOT at the local garage costs £40, borrowing off the bank can cost £35.

But you miss the point entirely and continue to do so. The actual cost of sending out an automatic letter is about £4. The rest of the charge is a punitive one. The entire industry accepts this as a fact.

The OFT has stated that it considers any punitive charge as unreasonable and discussion and a court case go one to discuss what is considered reasonable. This is not opinion, simply fact.

ILW

I guess this is an arguemant based on whether the law is moral or not.
For example, legally speaking, if one overstays on a parking meter for a minute or two a £60.00 fine is OK. If one goes over an overdraft limit by a few pounds a £30 charge is considered illegal. Something doesn't seem right to me, but then again I am not a lawyer.

sdooley

rigger_john wrote: »

Agreed as I said Nulla poena sine lege, however that doesn't detract from other posters rights to view the charges as 'fair' from a moral point of view, I just wish they wouldn't try to argue they are lawful because they think they are fair.

Just because a maxim is written in Latin doesn't make it an unqualified principle in common law. Penalties such as libary fines are lawful, even without statutory backing. Late fees for video rentals in the pre-LOVEFILM days were also legal - though the rental store might not call it a penalty. And so the bank charges in dispute could be interpreted three ways, each of which leads to further questions - were they a penalty, were they liquidated damages or were they a contractual payment for a service - if they were a penalty was that penalty lawful - if liquidated damages did they comply with caselaw around those - if they were a contractual payment were they fair under consumer protection legislation.

It's not as simple as saying the charges were illegal - my money is on the eventual outcome being they were legal but unfair under consumer protection law. Eventual outcome might include lower charges and greater use of technical measures to prevent unauthorised overdrafts - bouncing mortgage payments, consolidating balances from savings accounts to meet direct debits etc - restricted availability of full service banking - possibly even lobbying for a move to the French system where providing a mandate for payments without the clear funds to meet it is a criminal offence.

So there are potential downsides but that doesn't take away from the monstorous unfairness of the way charges were and are racked up week after week on people who just couldn't afford them by uncaring corporations - ultimately as a result of cost-cutting in banks who didn't have the people available to do what they would have done in the past - call you in for a meeting with the manager to sort out your finances. The campaign against bank charges and shoddy lending practices is a good cause - my worry is it will just shift the rottenness in the banking system elsewhere.

(I say that as sommeone who is lucky enough never to have been in a position where I've missed a payment, even when broke as a student).

sdooley

ILW wrote: »

I would suggest thet if you "borrow" something without asking then that is theft. If some little git came round in the middle of the night and "borrowed" your car I do not think you would be too happy.

It's precisely this argument that had the law changes so joyriding, theft of a car etc is not technically theft but 'taking without consent' (TWOCing). Likewise you can't 'steal' electricity, it not being a tangible thing but merely potential difference in voltage, so the offense is 'abstraction of electricity'.

Presented with a valid mandate authorised by a customer for the disbursement of funds (including a direct debit, cheque or standing order), a bank may choose to advance funds and those funds have to be repaid. That shouldn't be in issue - if the direct debit is invalid under the guarantee or the cheque is forged, you can have the bank reinstate your account, otherwise you have to repay the monies. The question is whether the charges the bank makes for that borrowing are (1) legal on general principles and (2) if legal on general principles are they fair within the consumer protection legislation.

petermb_2

The court case going through at the moment is to decide if these payments are in fact illegal.
Until it concludes it is very hard to say if this is the case. However as the OFT is the governing body for these things and they believe these fees should not be punitive there is little to discuss surely?

Morals dont come into the conversation. If they did we could talk about the morals of the lenders all day. Well the lack of them anyway.