Reclaim Bank charges is this fair for others

Junovo

natweststaffmember wrote: »

You cannot exceed an overdraft without permission because by going into excess funds the bank has authorised it.

So why do they mention the following on the Barclays web page:
Barclays is currently participating in a test case on unauthorised overdraft charges along with six other banks and a building society (the Banks) and the Office of Fair Trading (OFT).

This is the whole point of my question. Customers create the unauthorised overdraft , no one forces them to do this , we should all know the limit of our spending. Why should I share the cost of the penalty.

[QUOTE=_Nathan Spleen ]It only places the balance over the agreed overdraft if the bank decides to pay the cheque. Think about it.[/QUOTE]

Ok so the bank returns the cheque. Who pays for the admin on that, the bank or the customer who made the mistake in the first place. This bank is a business and should charge for admin like any other business ( although I disagree with the proportion they charge)

Nathan_Spleen

Junovo wrote: »

Ok so the bank returns the cheque. [/QUOTE

And in doing so prevents you from taking money without permission.

Junovo

Nathan_Spleen wrote: »

And in doing so prevents you from taking money without permission.

ok so please explain what is meant by unauthorised overdraft in the context that Barclays gives. When does this occur ?

natweststaffmember

Junovo wrote: »

So why do they mention the following on the Barclays web page:
Barclays is currently participating in a test case on unauthorised overdraft charges along with six other banks and a building society (the Banks) and the Office of Fair Trading (OFT).
The banks used to words the excess overdraft fees as UNAUTHORISED. If the bank allows for the creation of an overdraft in excess of their limit they are therefore giving permission to do so. You cannot spend more than you have without the bank being a cohort in the process.
This is the whole point of my question. Customers create the unauthorised overdraft , no one forces them to do this , we should all know the limit of our spending. Why should I share the cost of the penalty.
If the bank is not in collusion with others then how do you not authorise an overdraft? If you do not have floor limits which are authorised/allowed by the bank then those charges for card misuse(to give it a historical name) would not exist.


Ok so the bank returns the cheque. Who pays for the admin on that, the bank or the customer who made the mistake in the first place.
Now you are confusing the authorisation with the right to charge. I do not accept the argument that the bank has no right to charge but for example, exceeding an agreed overdraft can be charged at a higher interest. A cheque being returned(which 99% of the time is computer generated decision making requiring little manual interevention) should incur a charge but the price of that should be proportionate to the cost involved. In that respect we are both in agreement I suspect, ie the basic principle of Cheque/standing order/direct debit returning be charged for the it not being authorised.
This bank is a business and should charge for admin like any other business ( although I disagree with the proportion they charge)

We aren't disagreeing on the right of the bank to charge but whether you can ever be unauthorised or not given permission. We differ on the cost but not the principal that an item can be returned with a charge attached to it not being authorised.

natweststaffmember

Junovo wrote: »

ok so please explain what is meant by unauthorised overdraftin the context that Barclays gives. When does this occur ?

They use two systems:
1) Reserve Useage fee: it is a shadow limit which the bank charge £22.00 for and if they return items it's £8. The reserve is interest fee.
2) without the Reserve then the charge is £8.00 returned item charge and any excess is charged interest. Hope that explains what that is.
Barclays is not a good example to use because of their Reserve Useage Fees and system of charging which they introduced in August 2008.

Junovo

natweststaffmember wrote: »

We aren't disagreeing on the right of the bank to charge but whether you can ever be unauthorised or not given permission.

We go to the bank to ask for an overdraft limit and its agreed by both parties ie authorised. Then we go out and spend more than that agreed limit, isnt that above our agreemment ie unauthorised. If not then why do we have to arrange an overdraft limit with a bank.

Also in the main website Martin Lewis mentions the word "unauthorised"
Q. Why did the OFT bring the test case?
A. The Office of Fair Trading announced it was bringing the case to decide the principles of reclaiming bank charges in the High Court using its special powers to have a case heard on legal principle.
Its aim was to gain clarity on whether bank charges for unauthorised overdrafts (which includes bounced cheques or direct debits) are lawful or not.

Also had a look on the wiki for overdrafts and found this
When a customer exceeds their authorized overdraft limit, they become overdrawn without authorization.

Nathan_Spleen

Junovo wrote: »

ok so please explain what is meant by unauthorised overdraftin the context that Barclays gives. When does this occur ?

I do think that the term 'unauthorised overdraft' is misleading and reflects the change in the bank's presentation of the nature of the charges before and since the test case.

I think the bank's coined the term 'unauthorised overdraft' to give you the impression you've done something without their permission in an attempt to justify the penal nature of the charges. But during and since the test case they successfully argued that no breach of contract occurrs and that the charges are actually for the consideration of a payment instruction.

The Wiki article is technically incorrect. 'Insufficient funds charges' would be a better term to use.

natweststaffmember

Junovo wrote: »

We go to the bank to ask for an overdraft limit and its agreed by both parties ie authorised. Then we go out and spend more than that agreed limit, isnt that above our agreemment ie unauthorised. If not then why do we have to arrange an overdraft limit with a bank.
We spend more than is on the account then who authorises the purchases allowing the bank account to exceed the agreed limit? The customer doesn't allow this to happen. For example, if I give you £10.00 in cash and you find something to buy for £10.01 then you cannot buy it. However if I give you a card with my permission and you spend that money that by definition you have been given permission.
Also in the main website Martin Lewis mentions the word "unauthorised"
Q. Why did the OFT bring the test case?
A. The Office of Fair Trading announced it was bringing the case to decide the principles of reclaiming bank charges in the High Court using its special powers to have a case heard on legal principle.
Its aim was to gain clarity on whether bank charges for unauthorised overdrafts (which includes bounced cheques or direct debits) are lawful or not.
Martin Lewis is using the terminology of the OFT test case which have themselves used the language of the bank, ie unauthorised overdraft charges.
Also had a look on the wiki for overdrafts and found this
When a customer exceeds their authorized overdraft limit, they become overdrawn without authorization.

They cannot become overdrawn without the authorisation of someone/something/some organisation. Tell me how can I with a card be allowed to exceed an overdraft without the bank allowing me to do so?

Junovo

natweststaffmember wrote: »

They cannot become overdrawn without the authorisation of someone/something/some organisation. Tell me how can I with a card be allowed to exceed an overdraft without the bank allowing me to do so?

I see what you mean, the system should not allow the customer to ever go over the agreed spending limt especially in this day and age of technology and control.

But I still go back to the arranging of an overdraft, surely when a customer agrees a certain limit then they should stay within that limit. this agreement is a way of saying yes you can borrow this amount and some responsibility has to be with the customer. We are all capable of seeing how much we have and how much we spend. Perhaps we should all go back to using cash then this problem would not occur. :-)

The charges that the banks give are to me excessive and when i started this thread my concern was that I may have to now pay to support those who cannot control there own finances. Everyone seems concerned for those people that incurred charges (people who knew what the penalty was yet still went ahead) and have no concern for those who keep within their limit and have tried hard to do so.

natweststaffmember

Junovo wrote: »

I see what you mean, the system should not allow the customer to ever go over the agreed spending limt especially in this day and age of technology and control.

But I still go back to the arranging of an overdraft, surely when a customer agrees a certain limit then they should stay within that limit. this agreement is a way of saying yes you can borrow this amount and some responsibility has to be with the customer.
In this we both agree and I think the issue is that sometimes on the forums, posters will say, I checked my balance at the ATM and used my card but the still went over my overdraft. This is one issue ie that someone's intention is not to exceed their overdraft limit but sometimes it happens because they are allowed to do so.
We are all capable of seeing how much we have and how much we spend. Perhaps we should all go back to using cash then this problem would not occur. :-)
Now we are talking.
The charges that the banks give are to me excessive and when i started this thread my concern was that I may have to now pay to support those who cannot control there own finances.
That fear is bank propaganda since at the moment whilst interest rates are low they will not make as much interest on current accounts as they would when they were at 4 or even 5%. In the OFT test case it was suggested that fees at the level that they are at cover 30% cost of the current account costs. A reduction in this may mean higher overdraft percentage rates which would be fine.
Everyone seems concerned for those people that incurred charges (people who knew what the penalty was yet still went ahead) and have no concern for those who keep within their limit and have tried hard to do so.

I think determining the mindset of an individual is a dangerous thing. Many people do not intend to get bank charges and there are reasons why people exceed the overdraft such as loss of a job. I think better management of those in financial hardship is required by the banks.