MSE News: Bank charges: banks win test case appeal

never-in-doubt

Thumper7 wrote: »

Can I ask, was there any reason why the test case didn't include reg 5 and 8 to begin with alongside reg 6.

Surely it would have been common sense, to have included these regs in the first place if they really wanted a chance of winning.

T

It was the lesser of two evils and a different approach altogether. Even if reg 5 & 8 lose there is another 2 rules we can fall back on, thus I keep saying this case is anything but won (by the banks)..... its round 3 of what i'd assume to be at least 5 or 6 before we have a definitive outcome/clarity.

All we want is fair charges for the right reasons, not this gung-ho attitude currently taken by the banks/lenders. A fine of £12 for messing up is fine, a fine of £39 is away OTT.

gordothegopher

euronorris wrote: »

I can't believe how late people were still posting last night! I guess there are a lot more 'night owls' out there than I realised.

Anyway, a fresh day and a fresh approach. Instead of focusing on the win or loss (depending on how you feel), perhaps we should concentrate on ensuring that people are:

a) educated enough to understand and control their finances well, and
b) given help and support in order to guide them through a mistake or a tough financial time in their life (ie, redundancy, family death, etc)

If we all insisted that bank's acted quicker to ensure that debt's did not escalate beyond control, by offering financial guidance (you know, like they used to), then perhaps we would never have needed to bail them out in the first place.

The onus for responsible lending should be on them, and yet, even now I hear of people 20k in debt on a 14k salary. WHY did the banks ever lend them that much? It is crystal clear to everyone that they cannot afford to pay that back.

Similarly, if someone is receiving charge after charge, no matter who's at fault, this is the point when the bank should be calling them in for a meeting to discuss and resolve the situation. If caught early and treated with some common sense, then everyone would benefit. The banks wouldn't continue charging people who have no hope of paying back. And those folk are given the guidance and support they need to get back in the black.

I also think that financial planning should be compulsory in schools. Not everyone is good at understanding financial products and some have real trouble with figures, but a little guidance and explanation could make a huge difference. I understand that parents should be passing this onto their children also, but the reality is that not all parents understand it well enough themselves in order to teach their children. They need help.

If we could all work together towards this solution then the number of charges applied would be minimal, and in theory, applied only to those with the 'don't care' attitude.

I welcome your thoughts and input.

Yes, absolutely agree. The argument about whether this ruling was good or not is pretty academic.

The unfortunate thing is a few people on this forum seem to have been relying on their charges being refunded to them automatically after the case was finished (whether that is due to the evangelising type of spin Martin was putting on this whole thing or not ... I'll let you decide).

Euronorris is completely right. It's far more worthwhile for people to look at how to avoid charges in the future, how to manage income/outgoings better (e.g. cancelling direct debits and switching to other payment methods) and consulting the many free debt advice agencies out there.

If charges get refunded, it's a bonus. But I fear anyone who is living with the notion that back-dated charges are guaranteed may be setting themselves up for disappointment.

chuckl1es

glasgow11 wrote: »

life is diffrent for everyone.....in the last 4 years Iv had 4 funerals to pay for including my mum at 53....my husband was out of work for 3 months at the end of last year oh yes and I have 3 kids under the age of 6.....and prior to last year we always have savings and a very confortable life....its not a sob story because I dont want pitty just want to state the facts and say please dont JUDGE you never know where you'll in the find yourself in the future...but I wish you the best

Here here to the Judge comment. People should only judge on things they have experience of. Its wrong to judge things that you have no experience of and to make assumptions about people.

jonpnash

Exactly! I lived in belgium for 4 years and never once did I get any of these fees. It is simple. When your account is empty it is empty. You simply pay for the services you use, and overall the banking system is fair and much cheaper. The Belgium banking system was also very transparent. I.e. you knew exactly what you were going to pay for your bankings.

In contrast when I was working in Belgium, my UK account went 38 pence over limit due to a tiny change in a direct debit payment (mortgage). And the bank then happily racked up charges over just 20 days over over 400 pounds. This when my other current linked account in the same bank was over 2800 in the black (linked online), so would have been easy to transfer the small amount to put me under my limit.. Over the period when I got daily charges (justified by the bank by the huge volume of administration) there was not one email, phone-call or secure message to indicate that my account was racking up these ridiculous charges.

Not only that... this small 38 pence overdraft knocked onto bumping all my direct debits and next month, creating huge problems with money transfers from Belgium... adding yet more cost.

If you have complex finances... i.e. a family and mortgage etc... even with the best will in the world this system will catch you out.. The only way to prevent this, is to have a buffer of credit at all times in the bank....
And yes... the banks also love this. Why? because they make the other half of their profits out of current accounts by not paying market rates of interest on current account balances...
So all these people who carefully manage there banking for free banking.... They are not winners....
So the banks are in a win win situation....
It is a bit like the Ryanair philosophy of free flights... not quite so free as you thought...
and at the end of the day, not really a step forward...

Personally I would prefer a banking system that encourages good management, is honest, fair and transparent.

blind-as-a-bat wrote: »

Bank transactions have been 'live' for years, they just dont want you to realise that, and that fact means it is possible to stop you going overdrawn via debit card.

With a live system you take the money from the available ballence at the same time as the purchase is finalised, so no not exactly the same as a ballence check, but the transaction is instantly availabe to your bank to reduce your available ballence, not found a shop with a PDQ that does not for years, but im sure there are some 'odd' ones, but the sytem has been in place for years, so why has it not been perfected yet?

Sorry if you do not understand the logic here, but i do and there is no reason the bank have not made it imposible to go overdrawn via debit card, well apart from profit that is

smothy

richc1981 wrote: »

It kind of annoys me when people talk of "giving our money to banks" - just a complete over simplificaiton. No one wants to see tax payers money used in this way but what was the alternative? A complete failure of the banking system? To those who would say let it fail.. then think about how you would get paid, pay bills and all the rest.

A collapse of the banking system caused by !!!!less, reckless, risk taking, bonus grabbing, greedy, grasping bankers wasn't it?

newuser78

Whilst I agree that £35 penalty fee is "unfair" for going overdrawn by 1pence or £5 - the issue is the charges are already covered in the T&Cs.

What's unfair?

• A lawyer that charges £370/hour?
• A solicitor that charges £60/page for him/her to read it no matter how many paragraphs there are?
• An accountant that charges £250/month?
• A manufacturer that charges £600 for a bike when it only cost £50 to make?
• HIPs that cost £450?
• An estate agent that takes 2% of sale price when all they did really is place an advert in the local paper?

So I was not surprised by the ruling. Although.... I do think a charge based on percentage (plus small "admin fee" perhaps) would be fairer and not too damaging for anybody involved.

Very very very unlikely but you never know the banks might be shaken by this and start rewriting the system.

chuckl1es

newuser78 wrote: »

Whilst I agree that £35 penalty fee is "unfair" for going overdrawn by 1pence or £5 - the issue is the charges are already covered in the T&Cs.

What's unfair?

• A lawyer that charges £370/hour?
• A solicitor that charges £60/page for him/her to read it no matter how many paragraphs there are?
• An accountant that charges £250/month?
• A manufacturer that charges £600 for a bike when it only cost £50 to make?
• HIPs that cost £450?
• An estate agent that takes 2% of sale price when all they did really is place an advert in the local paper?

So I was not surprised by the ruling. Although.... I do think a charge based on percentage (plus small "admin fee" perhaps) would be fairer and not too damaging for anybody involved.

Very very very unlikely but you never know the banks might be shaken by this and start rewriting the system.

In each of your examples above, you are a) receiving something for your money b) you have the choice of which lawyer/estate agent to use and c) you are able to negotiate a better deal because there are plenty of similar firms you can go to.

In this scenario you do not have any of the above.

a) You receive nothing because your DD/SO is returned so your supplier has not been paid, yet you pay an extortionate fee for receiving nothing (and the supplier propbably charges you as well).

b) You have no choice of competition because there are only a handful of banks and they all charge and operate in the same way.

c) For the same reason as b, you are unlikley to be able to negotiate better terms.

newuser78

chuckl1es wrote: »

In each of your examples above, you are a) receiving something for your money b) you have the choice of which lawyer/estate agent to use and c) you are able to negotiate a better deal because there are plenty of similar firms you can go to.

In this scenario you do not have any of the above.

a) You receive nothing because your DD/SO is returned so your supplier has not been paid, yet you pay an extortionate fee for receiving nothing (and the supplier propbably charges you as well).

b) You have no choice of competition because there are only a handful of banks and they all charge and operate in the same way.

c) For the same reason as b, you are unlikley to be able to negotiate better terms.

I agree 100% although I am not too sure what you say about services you receive - £60 per page even if there is just one small paragraph and like banks, they all charge and operate the same way.

I loathe banks and the way they operate - they have not moved with the times (branch opening times, slow transfer, etc.) but realistically I just cannot see them losing the case.

pie81

chuckl1es wrote: »

In each of your examples above, you are a) receiving something for your money b) you have the choice of which lawyer/estate agent to use and c) you are able to negotiate a better deal because there are plenty of similar firms you can go to.

In this scenario you do not have any of the above.

a) You receive nothing because your DD/SO is returned so your supplier has not been paid, yet you pay an extortionate fee for receiving nothing (and the supplier propbably charges you as well).

b) You have no choice of competition because there are only a handful of banks and they all charge and operate in the same way.

c) For the same reason as b, you are unlikley to be able to negotiate better terms.

Agreed. If you read the judgment you'll see Lady Hale said that the real problem was that all the banks offered the same thing and there was no competition.

However I notice from another thread that Natwest has heavily reduced its bank charges - especially the unpaid item fee - starting from yesterday. Maybe the start of some healthy competition??

euronorris

never-in-doubt wrote: »

Aaaaw mate, come off it - intelligent discussions went out the window on page 2! :rotfl::rotfl::rotfl:

Have yourself a wee smoke and have a laugh at some of the silly comments Its keeping me amused! How is Holland today, reeling from the news or laughing at us daft Brits?

I know they did. lol I was trying to steer the conversation back on course but....I think I have better chance of winning the lottery....never mind.

Ah, Holland is actually sunny right now, which is nice compared to this morning. I was working the drowned rat look by the time I got to the office!:rotfl::rotfl::rotfl:

I have mentioned the court case and the outcome to a few of my colleagues and they are both baffled and stunned. Everyone pays a small fee for their bank account here. They also only pay a small fee should they become overdrawn without authorisation. And, if you start to struggle financially, the bank calls you in for a chat to discuss the options and negotiate realistic repayment terms. They want their money back at the end of the day, but they are more logical and supportive about doing it.

But then, there aren't as many people in debt here (outside of mortgage's) as they have a different view and culture towards money as a country. And they are very good at educating their children and each other about it.