MSE News: Bank charges update: the phoenix from the flames + full Q&A

Centium5000

pie81 wrote: »

If you read the judgment you will see that 30% of the banks revenue comes from bank charges but 50% comes from lending out money that in-credit customers keep in their amount. So they make more money from in-credit customers than overdrawn customers.

Ah, but that 30% of revenue comes from 20% of their customers; the 50% revenue from interest differences across all accounts that have been in credit at some point.

That would include many of the accounts held by the 20% that pay charges - unless of course these 20% were permanently in arrears!

Many of these charges are for just automatically saying 'no' to a transaction using computer logic - that's a lot cheaper to provide than having to actually clear and pay funds.

These charges are money for old rope, but that's okay for the majority as long as it's not their neck it's around.

smartbambi

magiciansgirl wrote: »

Duh, so that's the attitude of my bank, is it? The 'C' clearly doesn't stand for 'Charming' either.

My partner is also with HSBC who have been taking amounts of up to £150 from his account each month for the last few years, putting him into even more debt than he started with. We are still trying to find out the full extent of all the charges they have levied, having only provided 2 years' worth so far, amounting to over £2,000 - but we will be claiming this or a proportion of it back under the hardship rules. Thanks Martin for standing up for the little people - but let's not forget which government gave birth to this new "Supreme Court" - is it the same one that spent all our hard earned taxes on their fited kitchens, capital gains tax and duck houses, then gave all our money to the poor bankers who were down to their last millions, and who are now seemingly allowed to keep all the money they have already taken from us in the past!! This government's arrofance is beyond belief.

CrystalGecko76

Well, as someone who had a claim in I am gutted...but there are some issues I don't understand why people are arguing about.

The case was to say that charges for going overdrawn were over the top...£35 is extortionate. It supposidly only costs a maximum of £5 for the banks to send out a letter or information to say you have gone overdrawn so why the £30 hike? It is like going to a shop and buying groceries for £5 but being charged £30 for the bags & handling, would you pay that?

Secondly, when I was working I was on low income. I did try to live within my means but life often throws a curve ball & can leave you high & dry. It would have been better for the bank to have denied my transactions when I was about to go overdrawn but they decided to allow the transaction to go through (without my prior knowledge) forcing me to lend that money when I wasn't aware there was a problem, this was before internet banking! In other words I didn't know I was about to go overdrawn yet my bank lent me the money & then also charged me for it at £35 a time. My bank is nowhere near were I live, it is a bus journey into town for me to find out what is going on. Luckily I now have internet banking so it is a little easier for me to manage my finances...but still things can happen which can mean I go overdrawn & those costs cripple me as I now am unable to work due to several conditions (I am also waiting for another operation). I am only on benefits now so that money from the court case would have come in handy.

I did try to reclaim under hardship but they rejected it cause I had Sky TV...we don't get standard TV in our area at all well, it is due to be cut off in March & the government wants us all to go digital, I did & got penalised for it when I wanted to put my claim through in hardship...go figure!

The ammount I was claiming for was high so I am guessing I will never get it. It has left me feeling really depressed...which doesn't help with my health issues. I guess I am really lucky I moved back in with my parents, yet I still have to give them rent too...see what I mean about curve balls!

Anyway rant over, I hope this can get sorted out....I just want to pay a fair ammount for being overdrawn in future, I don't want banks to pay out for me when they know it will put me in the red & I would like a good portion of my previous charges back...well pigs may fly but you can always hope.

Crystal

CrystalGecko76

PS...just wanted to add to some of the newbies posting here, what makes you think you are paying for the people who are claiming their overdraft charges back? We are not literally taking it from your account are we? That is down to the banks and if you think about it, if the court had ruled in our favour & free banking was stopped another campaign would start up about that. It just goes to show you that the banks really are greedy & need to have that money coming in from somewhere. When the government said we were going into recession I though that this would be a blight on this campaign, especially when they started to bail out the banks left, right & centre.

[Deleted User]

ILW wrote: »

I agree, I went to buy a Bentley the other day and the advertised price was £150,000. That is more than I can afford so I think their should be a campaign and court case to reduce the price to a level which I find acceptable. I cannot see how they jusify this amount. I doubt it costs them anything like that to make one. Its just a way of keeping the poor poor. Can Martin start a new campaign "fairness to Bentley purchasers".

Oh and also about your Bentley, I assumed you haggled on the price. I mean it wasn't written in the terms beforehand was it? When I bought my car I was able to knock the price down a bit.

So unfortunately, as the "price" term in your contract was able to be "negotiated" and wasn't a "standard term" then there is no protection for you under the UTCCR 1999. It only covers terms that aren't negotiated. Sorry.

2 Points of Note for everyone appearing to be on the side of the banks, or those that harp on about free banking.

1) Why do you think there are regulations to protect consumers from Unfair Terms in the first place if basically your argument is: "You knew about it, you signed for it, it's in the terms, stop complaining." If everything we signed for was automatically fair because we agreed to it by signing, then why the massive regulations (UTCA and UTCCR) and why a 2 year court case?????? I wish the banks had you as their counsel... "You honour, the customer signed the terms, therefore it's fair and their own fault if they didn't read it."

2) This is a forum for people who would like to continue to challenge the established (for the moment anyway) view about the fairness of these charges and continue to try and put things right (in our view - again probably not right in your view, please do not bang on about this)

If you're not here to do that, respectfully, do one.

[Deleted User]

pie81 wrote: »

If you read the judgment you will see that 30% of the banks revenue comes from bank charges but 50% comes from lending out money that in-credit customers keep in their amount. So they make more money from in-credit customers than overdrawn customers.

Banks also make losses from some overdrawn customers who don't pay their overdraft back in full and go onto IVAs or go bankrupt instead.

So while banks do of course make lots of money from people who incur bank charges, I suspect they wouldn't be too upset to only have customers who stay in credit and never incur these charges.

Personally I believe bank charges are at an unfair level, however I don't think boycotting one bank is going to help, for the reasons above.

Oh and I'm a Miss not a Mr

Miss.. the Judgement simply reads:

"If they [the banks] did not receive the Relevant Charges they would not be able profitably to provide current account services to their customers in credit without making a charge to augment the value of the use of their funds."

It's on page 33 of the Judgement, interpret that as you will.

nolongerinthered

theres a hell of a lot of info on here about what happens now regarding the judgement and the outstading claims, and without wanting to sound like a complete dumbo, can anyone simplify for me what is actually going to happen?

I applied for my charges back in 2007 (before the case went on hold) and was told by my bank they wouldnt pay me back. i appealed and again got told the same thing. i was happy to drop it then as i thought i was fighting a loosing battle, however once the case went to court i kept getting letters of my bank advising my claim was on hold due to the case. this confused me as they had already told me they wouldnt reimburse me, but now i was 'on hold'.

So now, i dont really know where i stand!!!

Edinburghlass_2

As you will no doubt understand Martin has been and still is extremely busy however this is a message from him meantime.

"The chances of getting money back now are certainly slim - maybe 10-20%. So no one should plan on it and you should work your finances as if the cash isn't coming - while crossing your fingers that we can pull the cat out of the bag. We are working as quickly as we can on analysing the situation - and will be putting stuff in the weekly email when we do. Im afraid people need be patient as we want to try and get it right, and we will of course be doing updates on the site.

The result is very disappointing, but we're not giving up yet."

jonpnash

Free banking, of course not. British banking has not been either fair or good value. We don't have real choice, and maybe the best thing about this is hopefully the consumer will vote with his or her feet.... and demand better standards of banking..

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.

acslater

I have charges with Woolwich of over £10,500 plus interest of over £5,000. (£600 in one month alone)
I also have charges with Lloyds of over £4,000 plus interest of over £2,000.
My wife has charges with Lloyds of over £5,000 plus interest of over £2,500.

Banks owe me and my wife £19,500 plus £9,500 interest.

Woolwich offered me £1,000 in settlement, which they upped to £2,000 when I questioned them about their insulting offer


I found Supreme Courts conclusion yesterday very disappointing and to put it mildly, disgusting.

Banks argue that it would be an end to ‘free’ banking if these charges were removed, and that they would have to introduce a monthly fee to everyone for the use of a bank account. This is bloody unbelievable – surely they cannot levy charges to a certain type of customer to pay for all other account holders accounts.

Would if be fair if Tesco’s allowed more well off customers to wheel their weekly groceries through the till without paying and insisted that the poorer customers pay for them instead. NO!! That would not be fair. If you have a product or a service from a shop, garage, builder, lawyer, etc., you pay for it yourself – not anybody else!!!
Why doesn’t the same apply for banks? If you use a service, you should be prepared to pay for using it, dont expect other people (in this case, less fortunate) to pay.

If everyone was able to keep their accounts in perfect order, banks would then not be able to make their current £2.6bn pure profit a year from them. Banks would need to find another way to make up that £2.6bn. My guess is that they would then introduce a charge for the privilege of having an account. I find this a perfectly fair way of charging.

Banks must be itching to do this, as it probably a more profitable and fairer method of ripping us off. They wont do it of course because they would be admitting that their current system is totally unfair and prejudiced against lower income people or people with awkward cash flows (like me).

Banks have recently lowered or restructured their fees – isn’t that an acknowledgement that their fees were wrong.

Banks have settled some claims – isn’t that an acknowledgement that their fees were wrong.

Woolwich offered me a settlement – isn’t that an acknowledgement that their fees were wrong.

Why is it that the government have shoved money by the train load in the banks mouths? I am not an economist, but I know that if the general public got their hands on money (not the banks) then that would be far better for the economy. What business wants to borrow from banks at the moment – borrowing is too expensive (compared to the base rate)?


In line with what Martin Lewis (MSE) said yesterday (25.11.09), if the banks rightly returned our money, it would be a great catalyst for the economy. A large chunk of that money is likely to be spent, which will filter through shops and business’s, back to the banks. This would in turn create a positive and more confident public and help us out of the recession we are in (which the banks created).

Money needs to be fed into the economy from the bottom up. But then again hasn't government money been fed up a bottom????

Why are the banks being looked after so well? What have they done to deserve this preferential treatment? What is being done with the money that the government gave them to put into the economy, I think it was called Q.E.?

Why cant we have someone with a voice to represent us? The politicians don’t!!

A short while ago, political leaders were getting involved and ‘expressing their concerns’ about this matter. The cynic in me tells me that those ‘leaders’ were in on the result before us and were just giving us lip service. They knew that banks wouldn’t have to pay us back. Anything to get a vote, aye? Spineless bast***s.

I feel that the banks have yet again been looked after by the establishment. I wonder how many of the panel in the Supreme Court who came to the decision yesterday hold chunks of bank shares?