'Radical Bank Charges Thoughts: Bigger and longer compensation?' blog discussion

Former_MSE_Lawrence Posts: 975 Forumite
This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.

Please click 'post reply' to discuss below. Thanks :)


  • From a selfish point of view I regret I will loose free banking being a customer always in credit. Please do not tell me I never had free banking. If you can say it is free to take out four credit cards a year for the offers of CDs, DVDs and shopping vouchers never intending to use the cards then I can say I have had free banking. In truth both are subsidised and I welcome the move to fairer charges for all.
  • Hmm. Now this is interesting.

    I extricated myself from a rather disasterous marriage back in 1999, set up new bank accounts, and have been fairly solvent since then, so the whole bank charges reclaiming issue has pretty much passed me by. The one or two times I accidentally incurred charges since then, I haven't thought that the hastle made it worth chasing

    However ... prior to this, and mostly subsequent to 1995, back when I had somebody else spending my money for me, we had got into the problem of spiraling bank charges. Charges for not paying a direct debt, even when the charge was more than the sum requested, were immediately applied. So then we get charges for going overdrawn anyway, charges for staying overdrawn, charges for letters telling us we were overdrawn .. argh! I think the account went over £2K into the red, almost all down to charges, before the bank closed it and decided to send us CCJs instead.

    So, if what Martin is reporitng is indeed the case, then there's the prospect of my reclaiming a fair bit back from this period .. The probem, of course, is proving it. I don't think I have any of the original paperwork (although I kept it, it mostly got left behind back in 1999 and I dare say she binned it all along with everything else ..) and I doubt the banks will have any records that far back either.

    I'll keep an eye on this now!
  • This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.

    Please click 'post reply' to discuss below. Thanks :)
    p.95-97, day 3House of Lords Appeal(transcripts courtesy of Legal Beagles site):
    20 LORD MANCE: Just in this particular case, the consequences
    21 are -- if you were to succeed in establishing that the
    22 terms were unfair, that, at the very least, the terms
    23 would be invalid, so that all the unpaid charges would
    24 be refundable within the limitation --
    25 MR CROW: That is assuming a lot. No, my Lord, that is
    assuming a great deal. That was one of the points
    2 I made at the very, very outset, that all the directive
    3 says is that the term shall not be binding. European
    4 law leaves to national law -- it may be convenient just
    5 to draw you to the point where we make this point in our
    6 case. It is picked up in --
    7 LORD MANCE: It is a quantum meruit point, is it?
    8 MR CROW: Essentially, yes. It is page 13 of our case, and
    9 it is footnote 19 which is tied to paragraph 21. We
    10 say:
    11 "In this context, the banks are slightly coy about
    12 the potential consequences of any finding that the
    13 relevant charges are unfair. They rightly say in
    14 paragraph 4 of their case that the stated effect of
    15 regulation 8 is that the relevant terms would not be
    16 binding. However, that leaves unanswered the question
    17 whether the banks would be required to reimburse the
    18 full amount of the relevant charges to their customers."
    19 The reason why it leaves it unanswered is explained
    20 in the footnote:
    21 "Because where a provision of community law renders
    22 a contract unenforceable, the consequence is a matter
    23 for the domestic courts."
    24 So the domestic courts are going to have to sort out
    25 the answer to the question as to what the consequences
    of the effect of regulation 8 are.
    2 That question is not before the House on this
    3 appeal. As a result, your Lordships should not proceed
    4 on the assumption that the banks will necessarily have
    5 to reimburse everything that they have charged and, read
    6 carefully, the banks' case does not say that that is
    7 what would happen.

    This is what was discussed in the OFT test case. I will put my own cards on the table. I do not believe in "Restitutionary damages" argument since I think most County courts work on the KISS principle...ie Keep It Simple Stupid.
    I have not worked for NatWest Bank since February 2009

    This username is no longer active.
  • This would be monsterous. It would also be equally right and proper. It actually is simple. People should receive the benefits from what their money have been doing.
  • I believe that banks should not have profited from unfair charges and compensation should be paid to those who were unfairly charged.

    However, as others have noted, this could mean an end to 'free' banking for customers in credit. Perhaps more prominence should be given to likely consequences, i.e. that people who don't make a profit for the bank some other way will have to pay for current account services like using cash machines, using debit cards, writing cheques, paying in cheques, etc.

    If it is unfair for banks to profit excessively from bank charges, it is probably also unfair for those of us in credit to be expect to be subsidised by those who go overdrawn.
  • i have sort of got the jist of this, but would the banks be willing to give you your statements going back that far?
  • *MF*
    *MF* Posts: 3,113 Forumite
    First Post First Anniversary Combo Breaker
    edited 16 September 2009 at 10:48AM
    May I start by reminding everyone that the body responsible for a "stay" in the process of all claims is the Financial Services Authority (FSA).

    Now what do the FSA have to say "officially" about "time limits" and how does the Financial Services Ombudsman (FOS) act and react to the rules imposed on them by the FSA when it deals with consumer complaints?

    These extracts from the FOS website will I hope inform this debate about "time limits":


    why does the 15-year "long-stop" rule not apply, to time-bar complaints to the ombudsman service?

    As with the courts, a consumer generally needs to have complained within certain time limits if the business is to handle the matter formally under the official complaints procedure. These time limits are set out in the complaints-handling rules – in the "DISP" section of the FSA's Handbook.

    In civil actions in the courts, there is usually an overall "long-stop" requirement that the matter complained about should have happened within the last 15-years. This limitation does not apply to complaints to the ombudsman. There is no 15-year "long-stop" rule in the complaints-handling rules made under the Financial Services and Markets Act and the Consumer Credit Act.

    This reflects the fact that financial products are "intangible" and can be of a very long-term nature. Problems – for example, with a mortgage product or a whole-of-life policy – may only emerge or become apparent many years after the contract was taken out.

    In its policy statement published in January 2003 (see paragraph 3.3 of feedback on CP158 [opens in PDF format]), the FSA set out why there is no 15-year limitation period in the complaints-handling rules:

    We do not consider it is in the interests of consumers to rule out the possibility of complaints being dealt with outside the 15-year period that would apply to court cases. Nor do we consider this necessary to prevent hardship to firms.

    Extracts and more info from here:


    If many little people, in many little places, do many little things,
    they can change the face of the world.

    - African proverb -
  • If the banks had admitted their mistake back in 1997 instead of defending it they wouldn't be in this situation. As for it being the end of free banking i dought that would happen. britain has more bank accounts per head of population than any other country, which means there is billions of pounds in benefits,pensions,wages ect going through these accounts every day. this is far to profitable for the banks to lose by being the 1st to charge and potentailly lose to their competition. gaz
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