Nick Clegg & David Cameron reply to Bank Charges open letter

Former_MSE_Wendy

The following is a discussion of two news stories.

1. 12. August 2009 Nick Clegg.

"Lib Dem leader Nick Clegg has pledged legislation on bank charges to back the MSE campaign to ensure everyone who's had an unfair charge will get their money back without having to ask.

Full Story:
Lib Dems pledge Parliamentary motion for automatic bank charges payback

2. 26 August 2009 David Cameron

"Tory leader David Cameron says victims of "unfair" bank charges must be compensated "quickly and fairly". He'll also consider automatic payback of all charges, which could total over £10 billion."

Full Story:
David Cameron commits to payback of bank charges

DO NOTE IN THE DISCUSSION BELOW THE EARLIER PHASE WAS BEFORE DAVID CAMERON HAD REPLIED....

FULL TEXT OF THE THREE LETTERS

Original letter sent to David Cameron

"Dear Mr. Cameron,

I was delighted your party's banking white paper published this week, said bank charges were unfair, to quote: "There've been numerous examples of unfair treatment of consumers – the misselling of payment protection insurance and unfair bank charges."

It's the first time I've seen any major party say this. The only shame is it's too late by three years; 593,156 PPI reclaiming & 6,126,175 bank charges reclaiming template letters; and up to £2 billion of payouts.

It was back in the early days when people really needed your help, then bank accounts were being forced shut, and customers who attempted to reclaim were mistreated.

Forgive my slight scepticism that it's not a surprise to see the political elite calling these charges unfair now banks have become bogeymen, and we're near victorious at the final test case stage at the House of Lords.

So I want to ask you to support an act of real political bravery... these unlawful bank charges were taken from people's accounts without asking. No other companies have the power to take our cash in this way; if your energy supplier has a dispute with you, it needs to go to court to get the money.

So surely once it's finally legally decide they’re unfair the only right decision is for everyone who’s had bank charges to automatically be paid back the money without needing to ask for it?

Yes, it will cost. Perhaps £3 billion to £5 billion, but this is about justice, and with the nation’s finances in such a dire state, what better way to immediately stimulate the economy than putting this money back into real people’s hands.

Yours sincerely,

Martin Lewis, www.moneysavingexpert.com"

Full letter from Nick Clegg MP to MSE

Three weeks ago, I wrote an open letter to David Cameron; the Tories had publically said bank charges were unfair, so I asked them if bank charges should be repaid without people needing to ask (scroll down to see full letter, or read original discussion).

We sent it to his office & parliament, but haven't heard a dicky bird. Yet the leader of the Lib Dems, Nick Clegg MP spotted it...

"Dear Martin, as a subscriber to your weekly email, I saw your recent comments on unfair banking charges. I couldn't agree more with you about the scandalous nature of these charges.

The Liberal Democrats have taken a strong stance on this for a long time - in particular, in our manifesto for complete reform of Britain's banking and financial institutions "A New Deal for the City", launched in May 2008 where we stated:

"The treatment of charges by the banks borders on the scandalous. It is a continuation of the practice described above: a protected industry seeking to maximise profits by exploiting the weakness of individual consumers who lack information and sophisticated knowledge of products or legal advice. The principle should be established that bank charges must be transparent and cost based."

In your email, you made a further suggestion that banks should have to pay back all unfair charges automatically if the courts do rule against them. This struck me as an extremely good idea that we should do all we can to put in place. Vince Cable, my shadow Chancellor, and I would be delighted to support your campaign.

We will put a motion before Parliament setting out our support for your idea as soon as the recess is over, which will hopefully put pressure on the government and the banks to act to return the money they so unfairly took from customers.

Finally, I'm really looking forward to receiving the manifesto you've been compiling on your site regarding other consumer issues. And I'm pleased to be able to let you know we will be having a debate on consumer protection at our conference in the autumn, where we hope to adopt some strong new policies for our manifesto.

All the best,

Full letter from David Cameron MP

"Dear Martin,

Thank you for your letter about unfair bank charges. I am sorry it's taken me a little while to reply while I have been away from London.

I'm glad you liked our White Paper. Voters now know that if they want to change the way their banks are regulated they need to change their Government.

I've never shied away from taking the right decision when it's in the interest of consumers. But equally, I don't think it is right to make policy decisions without a detailed analysis of the issues. After everything that's gone wrong over the last decade, people don't want to see politicians making policy on the hoof.

When it comes to the question of bank charges I know there are a number of unresolved legal questions, and that the original judgement on the charges is now being appealed. Obviously, we shouldn’t second-guess any possible court decision, but once the legal issues have been resolved I agree with you that bank customers must be compensated quickly and fairly for any unfair charges that they have had to pay.

So I've asked my Shadow Treasury Team to look at your suggestion that banks should pay money back automatically if the courts do rule that the charges are unfair. They will be in touch with you to take this forward and go through the details, and I hope you will feel able to stay in contact with them to discuss this further.

Many thanks, once again, for writing to me. I think it's fantastic that websites like Money Saving Expert are empowering people to take more control over their own finances - so please do stay in touch.

Yours sincerely,

David Cameron"

Still want to reclaim bank charges

See the full guides with template letters Bank Charges Reclaiming

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JDPower

Maybe I'm just a complete cynic but that stinks of political opportunism to me (especially the "as a subscriber to your weekly email", anyone really believe that for a second) - a nice big user base of MSE users to appeal to by claiming/spinning to be onside.

MSE_Martin

JDPower wrote: »

Maybe I'm just a complete cynic but that stinks of political opportunism to me (especially the "as a subscriber to your weekly email", anyone really believe that for a second) - a nice big user base of MSE users to appeal to by claiming/spinning to be onside.

Actually I think you are being a little too cynical, you'll see from this blog that my first contact with Nick Clegg was when he called up for info about mental health and debt and then followed it up. Since he's been in regular contact with the site (over the 50 words campaing, more on mental health etc) and is more than aware of it. It wouldn't be any surprise if he got the email - i know a number of MPs who do and who read it

Of course politicial cynicism is important, but so is listening and reacting to what's being said - we have a go when they do - we have a go when they don't. Here is a politician listening and promising action that is unprecedented, cynicism or not - at least he's putting his money where his mouth is.

Martin

Nathan_Spleen

JDPower wrote: »

Maybe I'm just a complete cynic but that stinks of political opportunism to me (especially the "as a subscriber to your weekly email", anyone really believe that for a second) - a nice big user base of MSE users to appeal to by claiming/spinning to be onside.

The Liberal Democrats have clearly been 'onside' from the outset and haven't just woken up to the issue. They have been more outspoken about bank charges than any other party. If 'political oportunism' is responding positively to Martin's letter then that's a good thing isn't it?

Martin should be congratulated. However cynical one might be of politicians, if we don't attempt to engage with them we are abdicating our collective responsibility as consumers.

Tiber

I don't really care if Nick Clegg is indulging in a bit of political opportunism or not if it encourages the banks to act fairly.

Vince Cable would make an excellent Chancellor, (although it seems somewhat unlikely that he will ever get the job) and the banks would do well to take notice of his views.

That any politicians pledge support for the reclaim campaign is a good thing and Nick Clegg's message to Martin should be applauded.

I would like to get my local MPs support - as he is one of Nick Clegg's own that shouldn't be too difficult - but he doesn't appear to reply to letters or emails anymore so there's not much point although, I dare say, if there's a TV appearance to be had he'll show up!

richwoo

Some bank charges may have resulted from an odd accidental overdraft system, but in fact most banks would wave such charges against a customer who regulated their account properly as a rule. The people who have had charges adding up to considerable sums have regularly deliberatly overdrawn. Mr Clegg- "money they so unfairly took from customers."!!!!! What about the money the customers took from the banks without permission - that's theft. I think its quite right that they should pay a penalty and think themselves lucky that they were not prosecuted.

Nathan_Spleen

richwoo wrote: »

What about the money the customers took from the banks without permission - that's theft. I think its quite right that they should pay a penalty and think themselves lucky that they were not prosecuted.

You can't take money from the bank ''without permission''. It is entirely a matter for the bank as to whether you go overdrawn. To describe this as 'theft' is not understanding the issue.

MSE_Martin

richwoo wrote: »

What about the money the customers took from the banks without permission - that's theft. I think its quite right that they should pay a penalty and think themselves lucky that they were not prosecuted.

This is a common misunderstanding - you cannot take money from a bank without its permission.

In the old days your payment bounced. Then some bright spark in the banking profit stream units worked out that by inventing an extra limit they could make a lot more money with these charges.

A typical account has three overdraft limits


1. Authorised overdraft e.g. up to £500
2. Unauthorised paid limit e.g. up to £1,000 your money will still be paid but you'll be given a bank charge
3. Unauthorised unpaid limit e.g. beyond £1,000 here no payment will be made.

By introducing the second category the banks added over £3bn a year to their profits yet the key is these charges broke the law - specifically unfair contractual terms.

No customer steals from the bank (apart from the vault and a gun type) the system was designed to penalise anyone going beyond their limit for whatever reason - then to snowball (charges on charges) if they do.

Martin

petab

richwoo wrote: »

Some bank charges may have resulted from an odd accidental overdraft system, but in fact most banks would wave such charges against a customer who regulated their account properly as a rule. The people who have had charges adding up to considerable sums have regularly deliberatly overdrawn. Mr Clegg- "money they so unfairly took from customers."!!!!! What about the money the customers took from the banks without permission - that's theft. I think its quite right that they should pay a penalty and think themselves lucky that they were not prosecuted.

You can't truly believe this can you??...Theft?? What planet do you hail from? Somewhere with not much sunlight perhaps??

You don't have to be effected by Bank charges directly to know that they are sneaky, awful, unjust things designed to make Banks money for nothing.

The Banks do not deserve your loyalty - they certainly won't be helping you out in your time of need!...Maybe then you will see the light.

richwoo

Nevertheless, you know the terms and conditions of your bank account - my bank sends them to me regularly so you know perfectly well that an unauthorised overdraft will result in a charge and what that charge is. This is a contract, why should people think they can break it?

MSE_Martin

richwoo wrote: »

Nevertheless, you know the terms and conditions of your bank account - my bank sends them to me regularly so you know perfectly well that an unauthorised overdraft will result in a charge and what that charge is. This is a contract, why should people think they can break it?

Again the entire point of the campaign for bank charges is that the contracts are not legal. They break the law - both the high court and court of appeal have ruled the law does apply and the OFT has said it thinks the fees break it.

To argue "you were told" when the contracts illegal doesn't work. If I said to you in the street "im going to punch you" and then punched you. The fact I've told you doesn't make it lawful.

Banks sending out these terms doesn't make them lawful, they have been breaking the law by levying charges at this rate.