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

paitonboy

I think that the focus of the claim should have been that the excessive charges levied by the banks were a PENALTY and therefore unenforceable in UK commercial contracts. Only the Government has the authority to impose penalties, or fines, on the population. Banks can only charge damages to remedy the breach committed by the customer. Normally, set amounts are established in advance between contracting parties when making their deal and are known as liquidated damages. This is done to avoid the difficulty of having to make calculations for each and every minor breach that can happen during any contract.

The true measure of damages for a person exceeding their overdraft limit will now have to be decided case by case, because the banks have abused their powers in fixing their level of damages in a liquidated (predetermined) basis, by the practice of imposing these punitive charges. As stated above, the imposition of punitive charges that are out of all proportion to the actual damage sufferred is ILLEGAL in UK law.

This has been established law in the UK since a famous court of Appeals case (Dunlop) in 1915. Why the claiman lawyers never challenged the charges on this simple basis I just do not know.

[Deleted User]

Okay so we want to have the terms deemed unfair. They can be assessed because they're in standard form ie not negotiated. They can't be assessed based on their price. They can't be classed a penalties under common law because the banks have successfully argued the relevant charges are a fee for a service.

The charges have to be shown to be: detrimental to the rights or obligations of the parties.

Could it be said they they are detrimental to the rights of those consumers who incur charges (usually the most vunerable) that they are being charged a fee higher than 'normal' in order to subsidise the running costs of those who are generally not in a financially vunerable position?

Opions, comments, other ideas?

mramra

neilwjsimpson wrote: »

Opions, comments, other ideas?

Act responsibly, keep a close eye on your current account and any upcoming direct debits or standing orders. Actively manage your finances on a daily basis. This way you can hopefully avoid charges for borrowing unauthorised funds.

[Deleted User]

No smart alec comments please. If you manage your finances well and have no problem with bank charges, why are you reading this. Find a hobby, or a job.

WestonDave

neilwjsimpson wrote: »

Okay so we want to have the terms deemed unfair. They can be assessed because they're in standard form ie not negotiated. They can't be assessed based on their price. They can't be classed a penalties under common law because the banks have successfully argued the relevant charges are a fee for a service.

The charges have to be shown to be: detrimental to the rights or obligations of the parties.

Could it be said they they are detrimental to the rights of those consumers who incur charges (usually the most vunerable) that they are being charged a fee higher than 'normal' in order to subsidise the running costs of those who are generally not in a financially vunerable position?

Opions, comments, other ideas?

Unlikely. Judging by the examples given in the legislation, the sorts of things which are considered detrimental to the rights or obligations of the parties would be where the supplier can change the price, specification, delivery date etc with the customer having no rights to disagree, or where the customer still has to do things even though the supplier doesn't. Its not a general position, its about detriment within the actual contract under consideration. To come closer to home, if the bank account contract said that the customer had to stay in credit or be charged, but the bank can decide to charge anyway even if the account is in credit, then that would be detrimental because the customer basically hasn't got any rights - the bank can just walk over them. Where it gets really interesting is that there is a specific financial services opt out that lets financial services providers alter charges or interest rates without it being considered unfair provided they give notice long enough to allow the customer to move away.

[Deleted User]

What about the example in schedule 2 that the consumer wasn't given time to become acquainted with the terms before the conclusion of the contract. Ie signed up in branch?

JohnDinton

What about the example in schedule 2 that the consumer wasn't given time to become acquainted with the terms before the conclusion of the contract. Ie signed up in branch?

It will be interesting to see how the courts deal with para 1(i). Up to now the English courts have been very reluctant to allow people to say they didn't know what they were signing.

mott999

I still fail to understand why a high street bank that WE now own is allowed to effectively charge interest at such userous rates that would make a loan shark blush! To pay charges because you have not paid last month's extortionate charges is maybe not illegal but it is unfair. I thought a major tenet of English law is that it is equitable.

Jimmylands

At the risk of being very controversial on this site. This witch hunt we have for banks seems to be getting way out of hand.
If I am right a bank account is a service, right?
Therefore can I ask apart from optional fee paying accounts nobody in the UK pays for banking facilities?
Do we all have utilities that we pay for? Which is a service???
Would we expect to get broadband for free?
Working for a bank I would have welcomed the big evil banks to have lost. Hopefully this would mean we could adopt the French approach to banking. Three strikes and your out, then black listed and will not be able to get any form of banking facilities.
I consistently have conversation with people that write cheques when they have insufficient funds in there account and wonder why they are charged.
Now I agree if you are pushed over your limit by a charge and then are subsequently charged for this, now that is wrong and unjust. But to the rest who spend money which isn’t there need to stop or be stopped.
If charges where to be removed or reduced then we will have to pay for are banking facilities and services as the French do, and this includes internet banking, every transaction.
So I am interested to hear people’s opinions on this?
The majority of people that respect your limit you affectively have free banking, those who don’t will supplement free banking for everyone else.

stforbes

Does this mean the supreme court is saying that his colleques at the high court and court of appeal are wrong ??