MSE News: Hope for bank charges reclaimers in hardship 26 November 2009 at 7:44PM in Reclaim Bank & Credit Card Charges 10 replies 2.4K views

Former_MSE_Guy

This is the discussion thread for the following MSE News Story:

"Consumers in financial hardship hit with overdraft fees have received a glimmer of reclaiming hope from the Financial Ombudsman Service ..."

Read the full story:
Hope for bank charges reclaimers in hardship

feduplass

my claim was on hold with the bank, TSB...how do I get the ombudsman to look at it.I informed my bank that I wanted it to look at my claim due to hardship and was told it was on hold untill after the court case. While trying to deal with my problem the bank worked out my incoming and outgoing moeney and said I had more going out than was coming in..and proceeded to make an arrangement of 3 pounds a week to pay off my overdraft which consisted of charges and nothing else but had snowballed to approx 300pound . They said this was minimum they could take and would review in 6 month...no help to remove any of their charges.What will happen over next 8 weeks when all claims are supposed to be dealt with.if they close my claim by telling me I can not have refund,how will I be able to take it further?
feduplass

davetmorgan

so the house of lords ruled against us but arn't the heads of banks lords and sirs so it was never going to be a fair result

natweststaffmember

davetmorgan wrote: »

so the house of lords ruled against us but arn't the heads of banks lords and sirs so it was never going to be a fair result

Law Lords are not political bodies. I suggest that you read the OFT test case judgement since I think it will enlighten you on what they said which is not that the banks can walk all over you. In fact, I think the judgement has some positives within in it.

As an aside this thread is about financial hardship and so the point is not relevant since banks have always been able to look at cases of financial hardship before and will do after this. Let's not not go down this route, mate, cos you do not want to.

esmerellda

Hope this helps a little, I know some has been covered in the article however I think it does need making clear that its not about the legality of charges, its about the fair treatment of customers. I posted this earlier elsewhere.


The waiver has been lifted and along with it the detailed guidance on handling customers in financial difficulty.

Now whilst the waiver has been in place there has been a change in the way the banking industry is regulated - we used to have section 14 of the banking code, which was only voluntary guidance.....now we have BCOBS - regulated by the FSA, but the only part about Financial difficulty is not regulated but GUIDANCE and states this

Quote:
Dealings with customers in financial difficulty

BCOBS 5.1.4 01/11/2009 Principle 6 requires a firm to pay due regard to the interests of its customers and to treat them fairly. In particular, a firm should deal fairly with a banking customer whom it has reason to believe is in financial difficulty.


NOW, the part that many people havent understood in the past is that claiming financial hardship really had nothing to do with the test case.

It simply meant that you, as a customer, were complaining to the bank that they hadn't treated you fairly or sympathetically in times of hardship - in many cases by continuing to stack charges on even though you were shouting ''I can't Manage if you keep doing this'' and they ignored you.

Because of the test case, and the waiver, banks were putting ALL complaints on hold if they mentioned charges, and the FSA had to amend the waiver to allow complaints about charges during hardship to continue whilst everything else was on hold. That was because you werent complaining about them as unfair terms, simply because you were complaining the bank wasnt treating you fairly under first, the banking code, and later BCOBS.


I'm currently amending the full hardship guide, the position will change again with regards to the legal issue of charges, but the position on hardship remains the same - if you are struggling, contact the bank and complain - complain of the effect the charges are having on you, how they have pushed you deeper into hardship and how they arent treating you sympathetically and fairly and ask them to consider refunding you those incurred since the hardship began.

You should also speak with them about repayment plans on overdrafts, stopping future charges, moving you to basic accounts and helping you get things sorted.

We also have strengthened grounds for reclaiming charges for everyone else, and older charges outside of hardship periods, and at the moment are asking people just to hang fire on that until the OFT make an announcement next week. BUT if you are in hardship and struggling, there is no reason not to complain to your bank about excessive charges, and no reason not to take your complaint to the ombudsman if the bank refuse to help you.

I really hope that makes sense.

Ame
xx

catinahat_2

Hi all,
check out the message on MSE it offers a bit of hope I thinK ? I know I fall into ALL these categories. Was in eleventh hour of reclaim under 'hardship' for 5,000 charges (all accrued from charges escalating on top of previous charges...) ie £5 debit card mobile phone top up (three times over christmas) my bank asserted there was 'insufficient funds' but allowed the payment thru, charging me £25 unauth od fee per transaction, £4 daily unauth charge, £35 commision charge and interest on top. Despite fact I checked my statement for days I topped up and my balance was in redit . The bank left it 4 weeks to inform me of this, thus giving them time to extort exorbitant charges over the christmas period when mail/communications get delayed. Anyway, below is message from MSE posted today.

The Ombudsman has told MoneySavingExpert.com it may still consider some new and old cases. However, the majority of claims where consumers have simply argued charges are unfair, who are not in hardship, are likely to fail.

The Ombudsman stresses that it has yet to finalise its policy but has now confirmed the direction of its thinking (see the Bank Charges Result Q&A).

It currently has 15,000 claims on hold from those who made complaints between July 2007 and yesterday. During that time the Financial Services Authority allowed current account providers and the Ombudsman to sit on complaints (see the FSA ends hold MSE News story).

Even if your case is heard, it does not mean you will necessarily succeed in getting fees back as the Ombudsman still needs to make a judgment.

The Ombudsman is likely to consider claims under the following circumstances, with no time limit on how far back you can claim:

If you're in financial hardship.
Where you've unintentionally slipped over your limit and the charge is disproportionate to the 'offence'. Eg, you go £5 over but are charged £35.
Where you're incurring a consistent cycle of charges you cannot break out of.

Civigirl

I wonder if there is any point trying to reclaim. My son, 24, unemployed and sleeping rough was hit with overdraft charges for months and he had not even been approved for an overdraft in the first place. Every time his benefit got paid in they charged him between £35 and £70 a month. every month he would go in and dispute it and every month they told him to go away. He was a student and they refused him a student bank account and then when he had a bill go through that put him £15 overdrawn unknowingly they started the bank charges. I worked out that they had charged him over £500 worth of charges for that original £15.00 and wrote them a long letter explaining his situation. I eventually paid in enough money to clear his charges and since then I have monitored his account for him. He has been unable to find employment since leaving university and has been on Job Seekers allowance. He does not get Housing Benefit so his only income amounts to just over £200 a month and NATWEST wrote back stating that he had no claim for hardship. This was just after I had paid in enough to clear his debt and I advised Natwest of this. I have since moved ALL my accounts from Natwest but my son is stuck with them as being unemployed he is unable to get another bank account. Due to the overdraft charges he suffered many days with no food and barely had enough money to catch a bus from where he used to live to come and stay with me. These banks need to get with it, credit crunch means nothing to them. If I could I would not use a bank at all. I am disgusted.

esmerellda

Whats your sons situation now ? Is he still incurring charges ? Is the overdraft paid off now ?

Have a look into the Post Office Card Account for receipt of his benefits - you have to get a letter from the job centre to open one, and means living solely on cash, (paypoint for bills / prepay debit cards for internet shopping etc) but with the situation he is in I think leaving banking is a good idea until he gains employment. this will stop charges building up and eating away his money and he could keep it in place for when he starts work if its in credit and not attracting interest/charges now....otherwise work out a repayment arrangement with the bank for anything left.

Remember the hardship claims under the waiver were based on current circumstances and priority debts and living expenses. Hardship complaints will be based on the same, the current situation..... once the arguments are in place for moving forwards with the full historical claims he should be able to get back the money they took from him when he could least afford to lose it, but as you can see that may be some time away.

smk77

Civigirl wrote: »

I wonder if there is any point trying to reclaim. My son, 24, unemployed and sleeping rough was hit with overdraft charges for months and he had not even been approved for an overdraft in the first place. Every time his benefit got paid in they charged him between £35 and £70 a month. every month he would go in and dispute it and every month they told him to go away. He was a student and they refused him a student bank account and then when he had a bill go through that put him £15 overdrawn unknowingly they started the bank charges. I worked out that they had charged him over £500 worth of charges for that original £15.00 and wrote them a long letter explaining his situation. I eventually paid in enough money to clear his charges and since then I have monitored his account for him. He has been unable to find employment since leaving university and has been on Job Seekers allowance. He does not get Housing Benefit so his only income amounts to just over £200 a month and NATWEST wrote back stating that he had no claim for hardship. This was just after I had paid in enough to clear his debt and I advised Natwest of this. I have since moved ALL my accounts from Natwest but my son is stuck with them as being unemployed he is unable to get another bank account. Due to the overdraft charges he suffered many days with no food and barely had enough money to catch a bus from where he used to live to come and stay with me. These banks need to get with it, credit crunch means nothing to them. If I could I would not use a bank at all. I am disgusted.

Natwest interpretation of "financial hardship" is just that - Their interpretation.

This situation is exactly the type stated in the article.

Where you've unintentionally slipped over your limit and the charge is disproportionate to the 'offence'. Eg, you go £5 over but are charged £35.

Where you're incurring a consistent cycle of charges you cannot break out of.

What has annoyed me about the claims is knowing that some of those claiming do have an income that allows them to stay out of their overdraft yet aren't able to manage their accounts. I know someone who spent all her money during the month but still had to go out the last weekend before pay day ending up overdrawn...but wasn't bothered because that night out was so important. She actually managed to claim approx £1000 before the claims were suspended. Being irresponsible without suffering the consequences is in my opinion more unfair than the bank charges!

esmerellda

smk77 wrote: »

What has annoyed me about the claims is knowing that some of those claiming do have an income that allows them to stay out of their overdraft yet aren't able to manage their accounts. I know someone who spent all her money during the month but still had to go out the last weekend before pay day ending up overdrawn...but wasn't bothered because that night out was so important. She actually managed to claim approx £1000 before the claims were suspended. Being irresponsible without suffering the consequences is in my opinion more unfair than the bank charges!

I agree with this too.

natweststaffmember

smk77 wrote: »

Natwest interpretation of "financial hardship" is just that - Their interpretation.

This situation is exactly the type stated in the article.

Where you've unintentionally slipped over your limit and the charge is disproportionate to the 'offence'. Eg, you go £5 over but are charged £35.

Where you're incurring a consistent cycle of charges you cannot break out of.

What has annoyed me about the claims is knowing that some of those claiming do have an income that allows them to stay out of their overdraft yet aren't able to manage their accounts. I know someone who spent all her money during the month but still had to go out the last weekend before pay day ending up overdrawn...but wasn't bothered because that night out was so important. She actually managed to claim approx £1000 before the claims were suspended. Being irresponsible without suffering the consequences is in my opinion more unfair than the bank charges!

To be honest with you, the interpretation of financial hardship was down to reading huge amounts of information, asking banks how they deal with Financial hardship, reading the financial hardship cases here, speaking to a financial ombudsman and talking to many people within the Bank charges campaign who do believe in financial education as well.

Most of what you have said I would agree with because there is a difference between over spending, reckless spending, financial difficulties and financial hardship. The line between genuine financial hardship and I'm a bit skint were blurred by the FSA Waiver which muddied the water a little bit.