A&L Bank Extortionate Bank Charges

Nathan_Spleen

The lawfulness of all insufficient funds terms & charges are under question.

The problem with A&L's is that in many cases the charge itself (and frequency of the charge) will necessarily trigger other charges that won't be as obvious.

esmerellda

MarkyMarkD wrote: »

There is nothing unlawful about an account having a £5 a month under-funding charge.

And that is where this all began.

My point is, why do people sign up to a current account - maybe because of a 0% overdraft rate, maybe because of a 6% in credit rate - but ignore the equally prominent £500 a month minimum funding condition?

It should be £5, not £5 plus as many charges as we can get out of you.

Even you must agree that a £500 debt off one £5 charge is ridiculous.

natweststaffmember

esmerellda wrote: »

It should be £5, not £5 plus as many charges as we can get out of you.

Even you must agree that a £500 debt off one £5 charge is ridiculous.

Minor point but I doubt it was one month underfunding charge that went out. Can the OP clarify how many under funding charges went out of the account/

MarkyMarkD

No, I don't agree that a £500 charge off a £5 charge is ridiculous.

Not checking your statements - ever - when A&L email you each month reminding you to look at them is ridiculous.

Not closing an account which you don't use and which has a clearly detailed under-funding charge is ridiculous.

natweststaffmember

MarkyMarkD wrote: »

No, I don't agree that a £500 charge off a £5 charge is ridiculous.

Not checking your statements - ever - when A&L email you each month reminding you to look at them is ridiculous.
Not complying with the Unfair Terms in Consumer Contract Regulations 1999 is ridiculous but many financial institiutions ride roughshod over it all.
Not closing an account which you don't use and which has a clearly detailed under-funding charge is ridiculous.

To a point I agree on the fact that the OP made a MISTAKE. Unfortunately, one MISTAKE is £500.00 so Mark, next time I see an error here, I want a cheque for £500.00 please or £5 a day until you rectify it plus interest.

MarkyMarkD

The UTCCR is a poor bit of legislation.

There is no general legal concept of "mistake". (Well, there is, but it doesn't mean what most people would interpret by the word).

The simple fact is that if you agree to the terms of a contract, you should bother to understand them, and then comply with them.

This is not a bit of "small print". This is about the third line down on the page about this account (or was last time I checked). It's a simple enough deal - get a cheap introductory overdraft rate, get a good in credit interest rate, pay no charges for routine transactions and fund the account with at least £500 a month.

A&L notify customers that they are going to levy under-funding charges, too, before doing so. Presumably the OP didn't bother reading those e-mails either?

They also pre-notify ALL charges, at least 10 days before they are debited to the account. Anyone who actually logs on when A&L email them would be aware of the charge and wouldn't incur the knock-on charges.

natweststaffmember

MarkyMarkD wrote: »

The UTCCR is a poor bit of legislation.

There is no general legal concept of "mistake". (Well, there is, but it doesn't mean what most people would interpret by the word).

The simple fact is that if you agree to the terms of a contract, you should bother to understand them, and then comply with them.

This is not a bit of "small print". This is about the third line down on the page about this account (or was last time I checked). It's a simple enough deal - get a cheap introductory overdraft rate, get a good in credit interest rate, pay no charges for routine transactions and fund the account with at least £500 a month.

A&L notify customers that they are going to levy under-funding charges, too, before doing so. Presumably the OP didn't bother reading those e-mails either?

They also pre-notify ALL charges, at least 10 days before they are debited to the account. Anyone who actually logs on when A&L email them would be aware of the charge and wouldn't incur the knock-on charges.

If you take the £5.00 charges as fair then what about the charges because of the charges? The interplay of them would be seen as unfair.
UTCCR 1999 is an EU directive from the early 1990's which is about protecting the consumer(you and I) from unfair terms.

MarkyMarkD

No, UTCCR is the UK implementation of an EU directive.

There is nothing inherently unfair about charges which are a result of charges.

I would argue quite the opposite - if the initial charge was pre-notified (which in this case it was) there was ample opportunity to ensure funds were available before it was due, and no further charges would have resulted.

There has to be an element of "let the buyer beware". If you buy an online account, you won't get printed statements or printed letters telling you about charges. Nobody forced the OP to buy this account. If the OP is incapable of reading and acting on emails, they should have simply chosen a traditional account.

Nathan_Spleen

MarkyMarkD wrote: »

No, UTCCR is the UK implementation of an EU directive.

There is nothing inherently unfair about charges which are a result of charges.

I would argue quite the opposite - if the initial charge was pre-notified (which in this case it was) there was ample opportunity to ensure funds were available before it was due, and no further charges would have resulted.

There has to be an element of "let the buyer beware". If you buy an online account, you won't get printed statements or printed letters telling you about charges. Nobody forced the OP to buy this account. If the OP is incapable of reading and acting on emails, they should have simply chosen a traditional account.

You are over-simplifying it.

The OFT - the authority on the matter - pleads otherwise:


''Looking at the OFT's various concerns about those terms, it is important to note that the OFT's thinking has developed. One wouldn't want your Lordships to have the view that the August 2008 letter you saw is somehow carved in stone for all time as a permanent expression and a definitive encapsulation of the OFT's concerns, but be that as it may, the concerns relate substantially to the interplay between the amount -- we have never shied away from that; it is central to our concerns -- but, secondly, to the fact that the customer doesn't truly consent to the payment obligation for reasons we have been looking at in paragraph 81 of our case.

Those two concerns, the amount and the absence of true consent, are closely interrelated and the OFT would not be concerned if the relevant charges were a penny. So amount matters, we are not shy of that. Equally, the OFT would not be concerned under theregulations about a consumer paying his bank £70 for a one penny overdraft for 10 days if he had truly consented to the charges, in the way that a consumer usually consents to a price when he buys goods, well understanding the implications of what he is doing, but that is not this case, and although I wouldn't want to stress that one is giving here an inexhaustive statement of the matters of concern and the process is not being completed, but it is the interaction between the amount of the charges and the impairment of the consumer's consent that forms the substantial foundation of the OFT's concerns, and what we mean by "the impairment of consent" is the absence of true, genuine consent in the way that I have been attempting to describe in relation to the relevant charges.

That impairment arises at two stages, both when the consumer enters into the contract and also when he performs the conduct that results in the obligation being triggered, the obligation to pay the relevant charge being triggered.

My Lord, the impairment arises on entering into the contract essentially for the reasons that we have been looking at in paragraph 81; the charges don't apply in the normal performance of the contract, so the consumer's attention doesn't focus on them; there is no opting out of the terms if the consumer wants the full range of current account banking services.

Even if the consumer were to study the terms, he wouldn't be able to ascertain with any precision how they would be applied by the bank, for the various reasons we have been looking at.

The impairment of the consumer's consent also occurs when he actually performs the conduct which incurs the charge, because the charges are triggered by what the law and the terms treat as an implied request, not by something which is in fact a true and express request. The evidence of the market study is that they are often incurred by mistake, and we have given the references to the evidence in paragraph 81(n) of our case. I haven't wearied you by going through all of those references.

Quite apart from the evidence that the charges are often incurred in error, it is not difficult to infer that that must be so, because they don't represent a sensible form of borrowing, and anyone acting responsibly would want to avoid them. So the OFT is concerned that the charges unfairly capitalise on mistake.''

MarkyMarkD

The OFT's argument is almost entirely based on the fact that consumers don't bother reading contracts.

That is a pathetic argument. It is not one which is applied in any other normal situation. The parties to a contract are responsible for understanding them, before they sign up. Saying "they don't look at the overdraft terms because they don't expect them to apply" is madness. It's like saying that early cancellation terms in a mobile phone contract - for example - aren't read by consumers, because they generally keep to the deal for its term. If that is true of any significant proportion of customers, I'll eat my hat - most people understand perfectly well that they are committed for 12 or 18 months, and can't generally avoid paying the rental for that period.

Ditto with bank charges. Most people DO know that they will get charged for going overdrawn without permission. Most people DO know that if they buy an A&L account, there are underfunding charges.