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

CAMEO

liamaxina re DDs
Yes it does apply to bounced direct debits.

And thats the scandal.

Go to the cash point try and take out a tenner and its not there: no transaction?

Bank tries to take a DD out for a tenner (its still not there). is that a no transaction?

No "its a service charge for an individual application for an overdraft (extension)" . your application for an overdraft is declined but your account is debited for the charge and you now have....AN UNAUTHORISED OVERDRAFT resulting in a letter charge to inform you of this.

you now have to find fifty quid or more before the ten pound DD will clear on next application.

So what happens ?

Your DD bounces and you have another "service charge as an individual application for yet another overdraft".

And so on and so on.

Direct Debits (as promoted by a government near you) are the Crack Cocaine of bank charges.

One fix inevitably leads to another and then another before you know it you are borrowing money off friends and family to feed the habit. Your self esteem goes your ability to obtain credit for any reason is lost. Dealers (sorry Bankers) started to inflate the street price of this habit to nearly forty pound a hit which swelled their profits to a point where they were worth more than the county's biggest oil producer.

The "people who hug bankers" out there who are so quick to put down the decent human beings who have been caught up in this scandal need to examine their conscience as there but for the grace of god (and probably by the thin margin of one months salary) go they.

Here endeth the lesson.:A

gobbo

Despite what some people say , you should not spend money you don't have , and should learn to stay in credit whatever your means.

I believe in France that if you overdraw 3 times then your account is closed and all other banks are notified so you can't have one elsewhere. In the Uk you get charged , after the first charge you then should realize its not worth it and stop.

As someone else said why should people who manage their money properly subsidise those who can't be bothered.

I am surprised that monet saving expert is not on the side of free banking and frugal people like he usually is rather than those who don't look after their money

MillaJoJo wrote: »

Yes at the detriment of others.

What do you think would happen if we all managed our banking affairs without problems? Who would pay for your free banking then?

Do you hope people stay in financial difficulties so that you can carry on with your free banking service, because this is in effect what you're saying.

Not one person has answered this, a question I have asked several times.

As stated in another thread here people who pay charges are subsidising 4 other people to have free banking. Do you think this is a fair way for the banks to run their business? Counting on those who find themselves with money problems for one reason or another, to fall under and get charged somewhere around £200 a month?

I'm paying £50 a month for your *free* banking. So in actuality, your banking costs ME £600 a year.

kjetilniki

CCA does cover This is a s2006 amendment to the 1974 act. it applies to credit agreements generally not just those regulated by the CCA known as regulated credit agreements.

The agreements sections140A + 140B apply to is defined in s140C. I am unclear whether it covers bank accounts where there hasn't been an agreed overdraft which is why I put a limitation in my initial reference to these provisions.

F1 140C Interpretation of ss. 140A and 140B
(1) In this section and in sections 140A and 140B ‘credit agreement’ means any agreement between an individual (‘the debtor’) and any other person (the ‘creditor’) by which the creditor provides the debtor with credit of any amount.

It may possibly be of major use in mortgage possession claims [the majority of which are not regulated consumer credit agreements].

One can find an amended version of the CCA at statutelaw. This has the usual UK government website ending with the ordinary worldwide web beginning. [It does not include any 2009 amendments yet]

PlasticMan_2

I completely agree with liamaxina and CAMEO here. Most of my charges were for returned items (SOs and DDs). A bank would never charge 35 pounds for trying to take a tenner out of a cashpoint when you have no funds. How can they justify charging for returned items?!

I agree the items should be returned (and if it's embarrassing in Sainsburys or my mobile is cut off that's my own fault). But the only thing that ever took me over my limit was the charges in the first place.

Honouring transactions for a fee should be optional (and I would opt out). I have no wish to spend other people's money. The only exception is cheques, where banks issue guarantee cards (and perhaps they should think twice about doing so). I never use cheques anyway.

PlasticMan_2

Also, surely if a bank does agree to honour a transaction even though I have no funds, then the resulting overdraft extension is by definition "authorised", and therefore cannot incur a charge (although the argument depends on wording...I would rather they just fail the transaction for free).

oscar52

a query regards the court case etc - the court refused leave to appeal to the oft - presumably to the ECJ - didnt the high court also refuse leave for the banks to appeal to the HOL/Supeme court, thy then applied directly - why cant the oft apply directly to the ECJ?

salar15

Oscar, you can't just appeal to the ECJ. The last court of appeal in whichever European country you happen to be has a duty to make a reference to the ECJ if it feels that the case raises a question over the interpretation of European of law. So the right of appeal to Europe is one that has to be sanctioned by the Supreme Court.

In actual fact, a couple of the judges in the bank charges case essentially admitted that this was a matter which should have been referred, but refused to make a reference on the grounds that this was the sort of issue that needed a speedy resolution, and that the case had dragged on for long enough already.

riciticitavi

I have been reading the posts on this thread with a great deal of interest, there have been excellent debates from people wo don't experience charges and therefore have free banking and from people who, like me, have suffered. My wife and I have a joint account with a certain high street bank that likes black horses. One day, about 2 weeks before payday, my wife called as she did not understand the balance on telephone banking. She was told that there are no uncleared debits and that the available balance was correct. She then went to the cashpoint to take out a tenner. Three days later we received an unauthorised overdraft letter as a card payment we had made had cleared but there weren't sufficient funds to cover it. The letter was dated the day after our call. We called up to make a complaint and was told that this would mean that our account would be put on hold and the charges that we were due to incur, something ridiculous like £15 per day would be put on hold. We then received a letter to say that the information my wife was given was incorrect and this led the card payment not being successful Our unauthorised overdraft fee was refunded.. However, later the following month we had a charge of £150 on the account. We called up and were told that this would be investigated. Now, we have two accounts and this one has very little money going in to it so by the time this charge appeared we had again gone overdrawn. To try and cut this short, the bank has a tier system that depending on the amount you are overdrawn the daily charge increases. We were promised again that we were not at fault and would receive our charges back. Guess what? Following month, happened again, by this time we are paying £20 per day in charges. In order to try to get ourselves out of this circle until the FSA could take up our complaint, we did a stupid thing and went to a cheque cashing company, cashed 5 £100 cheques with plans to roll them over. Lo and behold we received a letter from debt recovery asking to bring our account back into line, we tried to call but kept getting bounced between UK and India. We were charged £240 which meant we didn't have the money to pay for the cheques to roll over. I got through to their complaints team and was told that we couldn't be helped by freezing charges as we did not earn enough between us to be offered any support. The cheques were due to be cashed so we borrowed £1000 from a relative to fund the account for the cheques to clear and ensure we didn't go without any money. Since then after being called as to why we are not repaying our overdraft I asked for my complaint to be looked at seriously. We were sent a letter stating that there was no evidence of any phone calls to query the original charges or of us asking for help. There is a lot missed out here, like our emotions at the time that led us to desperately seek help through a rip off cheque cashing company. We are now £1400 overdrawn with this bank because the charges just kept coming at £200 - £300 per month. We are refusing to pay them another penny until they enter a sensible dialogue with us. We understand that we made some silly choices, like the cheques, but at no time until then were we irresponsible. No try and tell me that these charges are reasonable!

Nick_C

Thank goodness for this common sense ruling. You agree to these charges when you open a bank account.

natweststaffmember

Nick_C wrote: »

Thank goodness for this common sense ruling. You agree to these charges when you open a bank account.

Another one who hasn't read the ruling cos you wouldn't have made the comment if you had. !!!!!!.....read it.