MSE News: Bank charges: banks win test case appeal

Chrysalis

C_Mababejive wrote: »

Whats the problem?? ive hardly ever paid bank charges. If the banks had lost, they were threatening to charge everyone to recoup some costs of operating accounts.

Can someone tell me why i should pay charges when i run my accounts in such a way as to not endure charges..just so that others can run their accounts less efficiently AND get compensation payments for so called unfair charges??

to sum you up, you just thinking of yourself looking after #1 right?

Chrysalis

davemoon wrote: »

I know this isnt going to go down with a lot of people but I have never been charged a penny by a bank because I manage my finances well. I imagine Martin Lewis too has never been charged a penny. If the banks were told that they had to refund ALL charges then people like me that always manage their account well will probably have suffered through the end of free banking in this country. How fare would that have been. I used to work in a bank and to be fare when an account is opened ALL people sign to say they agree to the charges. How can they then complain ?????? Sorry & i assure you I am not merely writing this to cause arguments but merely to give the other side of the argument.....

I understand you right? its fair someone else pays for you to have an account?

you in dreamland if you think you not currently been subsidised. Fair is EVERYONE paying for banking. Some people on here are like spoilt kids they think it is unfair if they have to pay.

natweststaffmember

pmcg01 wrote: »

I have only ever had around three in total, over 15 years, the last one was three months ago - it was my fault, as was the other two, and I have no intention of claiming them back, especially when I was in hardship (through my own fault) they were so accomodating.

The last bank one, I waas polite, and it was the first and only instance with that bank, so they agreed to waive, but pointed out it was out of goodwill and they did not need to.

I do not believe I was entilted to have it waived or redcued, but it was, and most banks will for a one off incident, for serial offenders they will not and should not.

Well they are reclaimable and it is irrelevant to the cause of it. If the charges complied with UTCCR on credit card charges(please remember what kind of charges I am currently commenting on) then I would agree with your thoughts on the last point.

natweststaffmember

Chrysalis wrote: »

I think there is a very big problem here.

I dont know if martin is part of the blame or just the other media.

But EVERYTIME I read about these charges in the media they are reffered to as UNAUTHORISED OVERDRAFT charges.

The problem is these charges are applied to BOUNCED payments meaning as a result they are been charged to accounts that are NOT OVERDRAWN. The media seems to have completely missed this simple fact, there is also no mention of it in that judgement.
The charges then cause the overdraft which leads to further charges for that extended overdraft. The amount of the charge being lower would not cause further charges nor would that person be subsidising other people's accounts.
As a side note this result was of no surprise to me for the following reasons.

1 - The regulators suspended all claims when they started the test case, at this point I knew the test case would go in favour of the banks, obviously a deal was made and the suspensions were a preliminary action.
The suspension of cases is based on the fact that the OFT was litigating in court and so for the banks to have to defend cases on law that was already being looked at was quite frankly absurd.
2 - The government proven they consider bank's profitability and well been above the general population when they spent 100s of billions bailing out the banks earlier this year and last year. Having now owning shares in multiple banks and seeing banks well been as essential they were hardly going to allow them to lose this case.
The OFT test case, certainly the part that was in court started in January 2008 prior to any money being pumped into banks and so I don't agree with your reasoning on that basis.
3 - There is no such thing as free banking, currently these charges amongst others cover the costs of 'everyones' accounts, if these charges were ruled out then ultimately they would have been replaced with something else, since governments and banks favour disproportionally charging the poor this would not have been a popular move.

On point 3 I think you and a lot of people are missing the point. No one I know with the charges campaign is saying that NO CHARGES can be levied for default charges or overdraft services(if we want to call it that) but that it must be a fair charge. UK banks make more profit from the High Street retail arm than any other banks within the EU which charge for having an account so I can't really see the issue of a reduction in revenue since some banks have reduced their charges in the last few years since the OFT test case begun.

Chrysalis

natweststaffmember wrote: »

On point 3 I think you and a lot of people are missing the point. No one I know with the charges campaign is saying that NO CHARGES can be levied for default charges or overdraft services(if we want to call it that) but that it must be a fair charge. UK banks make more profit from the High Street retail arm than any other banks within the EU which charge for having an account so I can't really see the issue of a reduction in revenue since some banks have reduced their charges in the last few years since the OFT test case begun.

I am not missing the point, I am well aware on the fair charge bit. So to rephrase, if the profit element of these charges were wiped (so as to only cover costs) then the banks would have to get profit from a new fee instead. The banks are trying to keep the illusion of free banking so would not want to charge a flat fee for banking.

The point I was making out is that millions of people as well as the media seem to think these charges are only been applied when the account goes into unauthorised overdraft. This is untrue. The charges will not always cause the overdraft either. eg. an account may have £80 available to spend, a £100 direct debit bounces, then a £35 fee levied meaning the account is still in credit.

What is wrong with something like the following?

£2.50 flat fee month, everyone pays even the wealthy, no waiving for the rich.
Flat fee covers costs of account maintenance, online banking services etc.
'All' payments that would make an account overdrawn are blocked meaning there is no longer such a thing as an unauthorised overdraft.
Bounced direct debits and bounced standing orders have no fee, after all if I try to buy something on my visa and dont have the funds I dont get a charge for it, it simply gets declined.

natweststaffmember

Chrysalis wrote: »

I am not missing the point, I am well aware on the fair charge bit. So to rephrase, if the profit element of these charges were wiped (so as to only cover costs) then the banks would have to get profit from a new fee instead. The banks are trying to keep the illusion of free banking so would not want to charge a flat fee for banking.
Higher overdraft rates, fees for overdrafts perhaps(which do exist for some customers on overdrafts over a certain amount), fees for paper statements or even fees for debit cards that have not been stolen.
The point I was making out is that millions of people as well as the media seem to think these charges are only been applied when the account goes into unauthorised overdraft. This is untrue. The charges will not always cause the overdraft either. eg. an account may have £80 available to spend, a £100 direct debit bounces, then a £35 fee levied meaning the account is still in credit.

I don't actually agree with you. The term "unauthorised overdraft charges" was the collective name that the OFT used in their court claim for unpaid items, referral charges, unauthorised borrowing, guaranteed card payment fees, or all the kinds of default fees that are made. The term itself is reported as such in the media but its definition is as wide as your are saying.

Chrysalis

never-in-doubt wrote: »

Hardly! I think between the 3 threads on this topic we've proven beyond all reasonable doubt that innocent mistakes (or job losses) can have a devastating effect and it is not all to do with people mis-managing finances.

Oh how great it'd be to be perfect like you eh? God forbid you lose your job or have a life changing accident..... you may get a charge for something that was out of your control, whilst you were on life support or whatever! Oh, funnily enough there's another example for you :rotfl: :rotfl:

Its very easy to be prudent when income easily exceeds outgoings. Some people are lucky enough in that they dont need to budget.

Chrysalis

natweststaffmember wrote: »

I don't actually agree with you. The term "unauthorised overdraft charges" was the collective name that the OFT used in their court claim for unpaid items, referral charges, unauthorised borrowing, guaranteed card payment fees, or all the kinds of default fees that are made. The term itself is reported as such in the media but its definition is as wide as your are saying.

Yet the media never reffer to charged for bounced payments they simply reffer to it as a fee for overdrawing, the same with the judgement, please read it. It only reffers to specific overdrawing of account. I am talking about much more than the name. Yes if OFT chose the name then they are simply incompetant as it is quite misleading.

natweststaffmember

Chrysalis wrote: »

What is wrong with something like the following?

£2.50 flat fee month, everyone pays even the wealthy, no waiving for the rich.
Flat fee covers costs of account maintenance, online banking services etc.
'All' payments that would make an account overdrawn are blocked meaning there is no longer such a thing as an unauthorised overdraft.
Bounced direct debits and bounced standing orders have no fee, after all if I try to buy something on my visa and dont have the funds I dont get a charge for it, it simply gets declined.

I think the structure is too simplistic. Personally I cannot see any reason why there is a completely free account offered with no Direct Debits/standing orders or cheque books and no card or overdraft. I think a sliding scale of transactions could be the way ie high/medium and low useage accounts, if that makes sense?
I think that perhaps the US "Opt in" to overdraft services or all payments declined is a good idea.

Chrysalis

natweststaffmember wrote: »

I think the structure is too simplistic. Personally I cannot see any reason why there is a completely free account offered with no Direct Debits/standing orders or cheque books and no card or overdraft. I think a sliding scale of transactions could be the way ie high/medium and low useage accounts, if that makes sense?
I think that perhaps the US "Opt in" to overdraft services or all payments declined is a good idea.

yes the fee could rise on extra features, similiar to what some banks have now.

I pay lloyds tsb £7.50 a month currently for my overdraft facility, part of select account. Of course this fee is higher then what it would be if every one of their customers paid a fee.

So business accounts which can expect many more transactions would have higher fees. But I hope you get the point of my idea, it would be a fee every account holder knows they have to pay, no unexpected charges, and no spending money they dont have. Very simple and very fair. Of course the people who currently are been subsidised probably hate my idea.