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

ILW

Rikochet wrote: »

Rich people don't pay bank charges because they are rich. Therefore their bills get paid and they don't get unauthorised overdraft fees.

Poor people however get S*&^ upon from a great height because the banks couldn't care less.

This country is run by idiots and we allow them to run it the way they do because we'd rather spend time moaning on forums and writing letters of complaint than actually doing something about it.

Everyone is entitled to an opinion but just because you haven't had a bad experience with a bank doesn't mean that you should support them 100%

Osama Bin Laden didn't do me any harm but I wouldn't get on a plane with him.

Many poor people do not pay bank charges either, because they live within their income.

aardware

I have to say this decision disappointed me.

I am actually on a debt management plan as a DIRECT RESULT of the snowballing charges that happened after one late paycheck. I have all of my direct debits come out on the same day, and got hit by HSBC (despite the fact that when i found out my paycheck would be late I immediately warned them) for over £500 of charges in 3 months. HSBC had been more than happy to throw credit at me, but when this happened it suddenly dried up, despite the fact it was only needed for a couple of days. The second and third months were caused by my not having enough money to cover the payments after paying the first months charges.

I have now changed banks and Abbey/Santander have a customer who is always in credit and am quietly getting on with paying off my debts, which is what I had hoped to do with the £3500 (i wasn't always good with my money...) of charges I would have recovered. I hope the amendment template comes soon so I can send it off!

Rikochet

ILW wrote: »

Many poor people do not pay bank charges either, because they live within their income.

Very true, some poor people also do their best to live within their incomes but have unexpected things happen to them in their lives and are left with no choice but to go into unauthorised overdrafts etc.

A lot of charges could be avoided if banks worked with their customers who weren't so good at managing their money instead of just causing them greater worry by taking even more money from them.

This is how banks work. They take your money. They invest it. They make money from said investments, they give you a little bit of it back. They profit from the rest. Simples?

Unfortunately not because they are also out to squeeze every single penny they can out of us to spend on more advertising to create more customers who they can rip off.

In my opinion there should be banks which are set up not for profit but for the interests of the people who use them

MSE bank Martin? :money:

Centium5000

This is a good one, a law that supports common sense:

http://www.opsi.gov.uk/acts/acts1998/ukpga_19980041_en_2#pt1-ch2-pb2-l1g18

The big 4 banks have a 'dominant market position' and use this to impose these charges in an unfair manner, i.e. not in proportion to the use of their services.

Taken with Regulation 5(1) of the UTCCR we should be in good shape.

Centium5000

Rikochet wrote: »

In my opinion there should be banks which are set up not for profit but for the interests of the people who use them

MSE bank Martin? :money:

Nice one Rikochet!

Better still, how about Northern Rock offering opt-out overdraft protection and much lower charges for these 'services'?

That would be a nice gesture given that their very survival was at public expense.

acslater

When everyone opens a bank account we all sign a declaration that we have read the terms. This is usually in the presence of a member of staff.
The staff know full well that the terms would not have been read. How can it be binding?

mangle101

When everyone opens a bank account we all sign a declaration that we have read the terms. This is usually in the presence of a member of staff.
The staff know full well that the terms would not have been read. How can it be binding?

Would these be the same honest & upstanding members of the banking fraternity that mis-sold me loan protection?

'Yes sir, you must take out the protection on the loan, otherwise you wont be able to have the loan with us'!

[Deleted User]

Centium5000 wrote: »

This is a good one, a law that supports common sense:


The big 4 banks have a 'dominant market position' and use this to impose these charges in an unfair manner, i.e. not in proportion to the use of their services.

Taken with Regulation 5(1) of the UTCCR we should be in good shape.

How can you prove the selling price is unfair? I think the key will be in this:

“A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer.”

But, what is good faith? What imbalance of rights or obligations are we complaining about? I'll assume the answers will be to our detriment.

ILW

mangle101 wrote: »

When everyone opens a bank account we all sign a declaration that we have read the terms. This is usually in the presence of a member of staff.
The staff know full well that the terms would not have been read. How can it be binding?

Would these be the same honest & upstanding members of the banking fraternity that mis-sold me loan protection?

'Yes sir, you must take out the protection on the loan, otherwise you wont be able to have the loan with us'!

Why not read the terms? Its only a couple of minutes out of ones life.

JohnDinton

I am shocked at the number of "Let them eat cake" responses. I can afford to pay for my bank accounts. I am not a socialist, but I do not want those who cannot afford it to subsidise free banking for me. The Supreme Court called it the reverse Robin Hood principle.

To those who do say, "Let them eat cake and manage their bank accounts responsibly", the whole basis of the banks' case is that it is not a breach of contract to make a payment which would give rise to an unauthorised overdraft. It is a request, under the terms of the exsiting mandate, for the service of considering whether the payment should be honoured. The consideration must not be on a whim, so it is difficult to understand how a bank can be justified in bouncing a direct debit for £38-72 which would have put me £9 (less than 0.1%) over my overdraft limit, and charging me £38 for refusing to pay, which still put £9 over my overdraft limit. I was lucky. I happened to pay in £600 in cash the following day, and so I did not incur any further charges for bouncing other direct debits made in the following days, or the re-presentation of the bounced direct debit. If the bank had telephoned me to tell me there was a problem I could have paid it in a day earlier.

To me the most regrettable aspect of this case is that there was no appeal against the finding of Andrew Smith J as to whether the charges were penalties at common law, and so unenforceable. He analysed the case law carefully, but with respect it seemed to me his reasoning as to whether the banks' terms made an unauthorised overdraft a breach of contract was rather woolly. He also ought to have made more of the fact the banks had only just changed their terms to include this latest fiction. It seemed to me it was imperative that the Court of Appeal and the Supreme Court should have had the opportunity to review his findings. It was a huge missed opportunity.

Anyone who has negotiated a liquidated damages clause in a commercial contract will know it is very difficult to get right. It must be a genuine pre-estimate of loss. The courts are astute to attempts to disguise penalties. Next time I draft a contract for development of software I'll include a clause that if the software is one day late a request will be triggered, for which a fee of £10,000,000 will be payable, for the customer to provide the service of considering whether to accept the software late, and that this will be repeated every day until the software is delivered. Does anyone think the courts will uphold such a clause?

There also seems to be a need to educate policitians and other commentators as to what is at stake as a result of the way fees on fees build up. Nick Clegg is quoted in The Times as saying that is isn't right for someone on a low income to pay £25 or more to their bank for overdrawing by a pound or two. One of the posts here talks of having been charged a total of nearly £20,000.

It is particularly objectionable that the fees have increased with such speed. At one time the charge for unauthorised overdrafts was a higher rate of interest. Then there was a charge of £9 or £10 for bounced items. Then it was £20, then £25, then £38. A few weeks ago certain airlines got into trouble with competition authorities for colluding over fuel surcharges. Ought there to be an investigation into to whether the similarity of charges from the banks is anti-competitive?