MSE News: Bank charges fighting on: a new legal argument

Centium5000

mramra wrote: »

It is fair that they are penalised, due to the terms and conditions of their account.

The fact that they do or do not pay for my bank account is irrelevant.

They're not penalty charges - if they were, they'd have all been claimed back by now.

There are limits to what contractual terms and conditions can hold you to - to 'penalise' someone would be a breach of the 'good faith' required to make the contract binding.

Think yourself lucky that's the case; have you checked that Martin hasn't slipped a clause in the website T&Cs that you owe £10 to his campaign every time you post in favour of bank charges?

You did accept the terms when you joined the forum didn't you?

pingchris

Centium5000 wrote: »

They're not penalty charges - if they were, they'd have all been claimed back by now.

There are limits to what contractual terms and conditions can hold you to - to 'penalise' someone would be a breach of the 'good faith' required to make the contract binding.

Think yourself lucky that's the case; have you checked that Martin hasn't slipped a clause in the website T&Cs that you owe £10 to his campaign every time you post in favour of bank charges?

You did accept the terms when you joined the forum didn't you?

they are not penalty charges you say ? so what are they

pingchris

Centium5000 wrote: »

They're not penalty charges - if they were, they'd have all been claimed back by now.

There are limits to what contractual terms and conditions can hold you to - to 'penalise' someone would be a breach of the 'good faith' required to make the contract binding.

Think yourself lucky that's the case; have you checked that Martin hasn't slipped a clause in the website T&Cs that you owe £10 to his campaign every time you post in favour of bank charges?

You did accept the terms when you joined the forum didn't you?

Centium5000 wrote: »

They're not penalty charges - if they were, they'd have all been claimed back by now.

There are limits to what contractual terms and conditions can hold you to - to 'penalise' someone would be a breach of the 'good faith' required to make the contract binding.

Think yourself lucky that's the case; have you checked that Martin hasn't slipped a clause in the website T&Cs that you owe £10 to his campaign every time you post in favour of bank charges?

You did accept the terms when you joined the forum didn't you?

they are not penalty charges you say, so what are they ?,these charges are levied and wrapped up in a fluffy bundle of words designed solely to trap and take,and thats all there is to it,its not rocket science to understand that words and terms can be put forward to decieve and cloud what is actually the case,and im afraid the banks are using this method.especially when they leave out the charges bit when you open your account,no mention of that is there from your friendly halifax bank rep,no mention of advice to admin your account,and then the signing for your account comes,"sign here please",(they know your desperate to get an account as thats the system all people are using so it makes sense to be part of it,or does it ?

anyway, remember banks want money flowing through them,by this action they make profits,if they open an account for you,the risk to them is minimal so personal accounts are a good bet.they know that if your not that good at administering your account but have an income then they will certainly make money from you as they will pick up and pocket charges,if your a terrible customer with no cash coming through then its no loss to them,if your a great customer then they score,you see its a no lose situation,abviously they price every eventuallity that may come along like a bad debt on a credit card,or a customer who goes overdrawn,they cover almost everything except a bust situation that has just evolved all over the world,they will probably never be able to do anything about that but they know the government has funds to bail them out with, should anything go drastically wrong,the tax payer is the source of the these funds,to sum this up,the banks made a lot of money charging people £39.00 a time because a direct debit failed to go through,the banking system controls the way people use money,without a bank account your financial life becomes a bit of a pain in the !!!!,so again banks are in a no lose,they offer you the product of a bank account knowing full well that its a must have if you are to prosper financialy and be able to manage your financial affairs in a good fashion,bank charges are like you having a car thrust upon you by someone, and they tell you that you have to take it, and you think hey a free car why not everyobodys got one its the way forward right. (they make it sound like its the best idea for you to have a car,( but really they have an agenda,) the car has an empty petrol tank !,that someone then offers you fuel and being the only provider you have to buy it from them,knowing you need fuel for the car you buy it,you need to sign for the car to make it legal that you own it of course,well thats what you got to do to be able to drive it legally right.
once youve signed and your off driving you may run into trouble along the way,maybe you will have a bump or two,the trouble is that the contract you just signed stated that the car was still legally owned by the bank if you dented it then the bank would charge you a fee i.e £39.00.
the car is only worth £180.00 but over the years the charges you pay should more than make them a nice healthy profit,for that car they gave you,in some cases may pocket them approximately £7000 or more in charges.so you see ladies and gentlemen,no matter how you look at it,the contracts we signed are not wholy contracts at all,they are also a licence for the banks to be able if required to dip into your account and take your money,therefore this supposed contract we all sign when we open a bank account cannot be trusted as a benchmark for banking agreements between provider and customer because it is not just a contract it is also a licence,if it cannot be a benchmark then it should never have been allowed to be used as such,therfore to me all supposed contracts should be imediately struck out,all charges returned, and a new contract written for every customer.

you may start shooting me down in flames if this argument is way off the mark.

edwace

pingchris wrote: »

they are not penalty charges you say ? so what are they

According to the Banks who are not allowed to impose penalty charges ,(unless they have taken over the legal system and are imposing fines in place of traffic wardens and the courts while we were not looking ) they are fair charges that reflect the cost to the bank of administering the account which has entered into a default status. (Although in reality you don`t really need anyone at the computer to do that kind of work).
So the 1 bank worker spending 1 hour at a computer administrating 100 default accounts will be earning around £3800 for that hours work that`s around £152000 a week or £6992000 a year with 6 weeks unpaid holiday (Unpaid holiday because they don`t want to be greedy).
This wage scale is why a large number of 1st division footballers are quitting football to work in their local bank.
It`s a ludicrous supposition I know but not as ludicrous as the banks explanation for the level of charges levied on peoples accounts.
[FONT=&quot]
“The process by which banks create money is so simple that the mind is repelled.”[/FONT]

pingchris

it reminds me a little bit of the pea and the three cups,you can never win in this game,as the guy who moves the cups around always has full control of where the pea will end up.

pingchris

the banks are unreliable with what they are doing which spells much doubt over there contracts with customers,some refunds have been made prior to the test cases,others rejected,partial payments offered,minimal payments offered,bankers on television fielding questions about charges for which they have no solid answers,two courts prior to the supreme court ruling dismiss ther argument,banks saying they are "mindfull of people in financial difficulty"(and that means what exactly ?)

there are many doubts for me over this case,doubts that millions of people also realise,"it smells like a fish stuck in an air vent".

Sparhawke

Thank you for starting this MSE, and for paying for a top QC to fight for us, that really goes above and beyond the call of duty.

Is this not the best website in the world??!

marcharrison1979

Centium5000 wrote: »

They're not penalty charges - if they were, they'd have all been claimed back by now.

There are limits to what contractual terms and conditions can hold you to - to 'penalise' someone would be a breach of the 'good faith' required to make the contract binding.

Think yourself lucky that's the case; have you checked that Martin hasn't slipped a clause in the website T&Cs that you owe £10 to his campaign every time you post in favour of bank charges?

You did accept the terms when you joined the forum didn't you?

LOL! Brilliant idea! i hope he has, i'd be more than happy to pay that to see these tight fisted scum bags squirm. How you can support the banks in this argument is beyond me, either they are dumb enough to believe the banks when they say it's the end of free banking or they work for the banks and in fear of loosing their jobs. Why are banking employees so faithful to their employers? the banks certainly don't care about them, they just get dropped like yesterdays bad news when things get tough.

Centium5000

pingchris wrote: »

they are not penalty charges you say ? so what are they

edwace wrote: »

According to the Banks who are not allowed to impose penalty charges ,(unless they have taken over the legal system and are imposing fines in place of traffic wardens and the courts while we were not looking ) they are fair charges that reflect the cost to the bank of administering the account which has entered into a default status. (Although in reality you don`t really need anyone at the computer to do that kind of work).

I'm on your side guys, but I'm afraid I can see why the Supreme Court decided as they did. Bear with me...

In the judgement, the Law Lords considered whether the charges were of the nature of penalty (or default) charges. To be such, they needed to have a few qualities:

• to be intended by the banks to disuade customers from a course of action - i.e. a penalty.

• to cover actions that are outside the contract - i.e in breach or default of it.

• not to correspond to any particular service.

The reason why they don't have these qualities are because:

• the banks rely on these charges to make tons of profit and wouldn't want to disuade someone from providing this income.

• the charges are specified within the contract itself and the actions are permitted within the contract i.e. they cannot void the contract if you go into 'unauthorised' overdraft, they can only refuse to provide you with more money.

• the banks have to assess each request for payment (however automated it is, and even if declined) and therefore each charge corresponds to this service

Now, you and I know that this is ridiculously unfair, but we have to demonstrate why. Their reasoning above is pretty solid regarding penalty / default / service so it must be unfair for some other reason.

Having thought about this long and hard, here are (just a few) reasons why the charges should not be legally binding:

• the banks can unilaterally decline to provide these services and the customer has no equivalent right - this is an imbalance of rights to the detriment of the customer contrary to good faith (it allows them to decide how much profit they make from a particular request). This is contrary to Reg. 5(1) of the UTCCR.

• the customers have no choice but to pay these charges because the banking industry has come to collective agreement (evidenced by the court case and their statements via the British Banking Association which represents all banks in the UK) . These charges are excessive beyond what they would be in a competitive market in contravention of Chapter 2 of The Competition Act and are therefore unfair and unenforceable. The Supreme Court only ruled that charges cannot be judged excessive under the UTCCR, not competition law.

• either there was a common mistake (both banks and consumers thought they were penalty charges) when really they were contracting services. This is a material difference, there was no meeting of minds required to form the contract and therefore the contract is void. This only applies to contracts formed before they rewrote them to explicitly say they were services!

• or there was a unilateral mistake on the part of most consumers, the banks were aware of this and yet didn't correct the consumers' mistake as it was to their advantage not to. This is unfair advantage, or de facto misrepresentation, and therefore the contract should be voidable.

I think that should be enough legal arguments against these charges to be going on with, and they seem to fit the nature of our complaint rather than being some dirty technical point.

Sorry for all the highlighting guys - I did it to make googleable keywords or key statements clear, or at least so my long post didn't send you to sleep!

Hope this helps

Alpine_Star

Section 5(1) of UTCCR - the part of the regulations that the Supreme Court suggested might work - basically means that as OFT cannot now assess the fairness of the charges in isolation, they may be able to assess the fairness of the balance of the whole contract, due to the charges.

Some commentators believe that the imbalance applies to the overall imbalance of the banking business model where the 20% who pay the charges subsidise the banking services of the 80% that don't. In fact section 5 relates to the imbalance created within the contract between the individual consumer and individual bank.

The issue of what section 5 (1) relates to was addreesed on the final day of the House of Lords appeal hearing, in 2 separate exchanges::

BARONESS HALE: Forgive me, Mr Crow, before you move on, yesterday you were asked: supposing, horror of horrors, that this appeal were to succeed, either in whole or in part, what sort of enquiry might be left to the OFT..............You couldn't take a group of terms and say, "Taken together, do these pass the fairness test?"

MR CROW: One would have to consider each term in the context of the contract as a whole. I guess one could have a several challenge, but I think one wouldn't end up -- it is getting too abstract -- with a collective challenge to the contract as a whole. It would have to be a challenge to the terms severally.

BARONESS HALE: There are several terms that say you pay this for this, and this for this, and this for this, and put together that tots up to something that produces a significant imbalance. That would seem to me to be an extremely sensible sort of enquiry to be made and one which would not lead to some of the deleterious results that others might.

MR CROW: We will certainly give some thought to that. I am grateful.

***********************************

MR SUMPTION:
''As I understand it, this is now substantially common ground, my learned friend having confirmed shortly before the short adjournment that the directive is concerned with imbalance within a contract as between the parties to that contract, and not with, so to speak, the structure of an industry or a bank's clientele en bloc.''