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

Punes

I really hope there is a light at the end of this dark tunnel. My husband is a Sole Trader and because of the recession, work has not been too good, especially cashflow. Have Lloyds TSB helped us? Not a chance. Infact they have decided to keep feeding our business account with high bank charges, unauthorised overdraft charges (we asked if we could increase it a little when the Recession kicked in, but were refused) and now are threatening legal action against us, no doubt since hearing their successful appeal in the court. Banking with them for 30 years accounts for nothing. Needless to say we did have a parachute bank to go to, but we are still in the 'myre' with Lloyds TSB. We are quickly going down and I'm sorry to say I dread every waking moment of our life at the moment.

Please keep trying MSE Team you are our only salvation at the moment!

Daisy_Bell

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.

I don't agree it is penalties on unauthorised overdrafts that pay for 'Free' banking! Don't forget -there is no interest paid on money in current accounts. The bank has the use of my money for free and in return they pay out my direct debits, etc. So.. I pay for the convenience of my online banking that way. I suspect that if everyone had to pay for their current accounts, even when they manage their money carefully and never go overdrawn, then an awful lot of people wouldn't bother with a current account at all and just go back to banking on the High Street (like we used to) to pay all their bills, etc. Worse, a lot of employees might demand going back to the old weekly cash pay packet instead of having their salaries paid into their banks! The banks would certainly lose out then!
I do think though, that each case should be judged on its own merits. A person who say, once accidentally goes into the red, could possibly be let off, depending on the circumstances, but a persistent offender (and there would be an awful lot of those if there were no deterent) should in my opinion be penalised! The trouble today is, that far too many people think everything should be free - even bank loans - which in effect is what going overdrawn is! People who persistently do this, are in fact - stealing! There is far too much emphasis put on people's rights these days and nowhere near enough on their responsibilities!

Having said all that, of course, penalties should fit the crime and there shouldn't be a 'Blanket' penalty for all offenders! Once my bank accidentally tried to pay my credit card bill twice and of course there wasn't enough money in my account for this. I got charged £30 by both organisions - my bank and my credit card company! This, even though the bill had been paid! Computerisation to blame here of course. A couple of telephone calls put this right and the charges were withdrawn. If a reasonable explanation is made, most banks will act fairly.

I'm pretty fed up with people moaning and groaning about their debts, as if nothing is ever their fault. Most seem to think all their debts should be written off at the expense of everyone else! All my life I have saved for the things I needed. If I didn't have the money, I went without! Simple as that! Everyone seems to think they have a right to everything immediately these days. Time was, mortages were given on properties and a further loan on that property would only be given for improvements to it. Since then, loans have been given for holidays, cars and all sorts of luxury items, which has accounted for many people losing their homes today. Not content with re-mortaging up to the hilt, they've gone on borrowing on umpteen credit cards too! No wonder we're in such a mess! There is only one word for all this - GREED!

Chrysalis

PlasticMan wrote: »

Personally, I think this is brilliant news, and would like to thank Martin in particular, and everyone else involved for their hard work in this area. I haven't had an overdraft charge in years, but I can see how unfair they are, and unlike some I would happily pay a small charge (5 pounds or so a month?) for a basic bank account (no bundled insurance I don't want or need). Unlike some people I realise that cashpoints, bank tellers, account adminstration, etc all cost money and see no reason that people in difficult circumstances should pay for my use of them.

My experience: Quite a few years ago there was a problem with my wages while I was abroad. I had a weekly standing order set up for 10 pounds (into a shared account for food spending). It failed four times that month and cost me 140 pounds (and I had no idea there was even a problem). Other direct debits failed and made that up to 250 pounds over the month - although I never went over my overdraft limit, except for the charge. I'd had money in other accounts, and wasn't in financial difficulties at the time, but after that I was, even when I did get paid, since every month I was short. The bank wouldn't budge, and I got further charges (since I couldn't very well cancel direct debits for my council tax, fuel bills, etc). Eventually, I made a successful claim for 600 pounds, which took a big chunk off my overdraft. It had been up to 1800 pounds but that gave me the breathing space to pay it all off (over a year), and get straight again.

There is something very unfair going on here. There is no way to avoid it and it needs to be sorted. Perhaps one day the smug "well you should be more organised" gang will find themselves skint and realise how difficult it is to be "organised" all of a sudden.

Agreed, I also havent paid any charges for quite a while and I think the system needs to be fairer than it is now. I do applaud martin and others who are still fighting the battle, although I fear our corrupt system "which cannot allow the banks to fail" will be a problem I cannot fault him and others for persuing this.

Chrysalis

CAMEO wrote: »

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.

Not quite right, you do get a letter, but it is simply to tell you the payment has bounced. Quite often a charge (first one) will not cause you to go overdrawn.

The unauthorised overdraft wording is quite misleading.

Chrysalis

liamaxina wrote: »

All the talk about reclaiming bank charges has been about overdraft charges. All my charges - around £2,000 - are charges made for NOT paying a direct debit because there was not enough money in the account to pay it. I cannot see how any bank can claim that it costs them £39 to say 'no we are not paying this direct debit'. I have been charged £39 for an unpaid direct debit of £3.00! I have had to cancel most of my direct debits because I cannot guarantee that the money will be there when they are due and this means that I am penalised by the companies I have to pay because if you don't pay by direct debit you pay a higher premium for things such as electric, gas etc. My mortgage company charges me £15 per month because I don't pay by direct debit! Can I claim that this is an unfair charge too? Sorry, I'm going off the point. What I really need to know is, does this judgment apply to the charges for unpaid direct debits also? Is it worth still pursuing this claim?

Yes.

I think the regulator (and media) handled this wrong, the 2 different charges "unauthorised overdraft" and "returned payment" should have been handled seperatly as they both very different. The banks can argue a unauthorised overdraft is a service significantly easier than not paying a bill.

Chrysalis

gobbo wrote: »

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

not the same reason you have took a very one sided view.

another ignorant and selfish poster, your banking only 'appears' to be free because of these charges, perhaps you know this and is why you want them to stay.

seems you dont know it is not that easy for some people to simply manage their money properly, tell me how do you handle money when eg. you suddenly lose 80% of your income overnight?

facts for you
1 - banking isn't free.
2 - these charges get applied to accounts in credit as well

chipbeck

Punes wrote: »

I really hope there is a light at the end of this dark tunnel. My husband is a Sole Trader and because of the recession, work has not been too good, especially cashflow. Have Lloyds TSB helped us? Not a chance. Infact they have decided to keep feeding our business account with high bank charges, unauthorised overdraft charges (we asked if we could increase it a little when the Recession kicked in, but were refused) and now are threatening legal action against us, no doubt since hearing their successful appeal in the court. Banking with them for 30 years accounts for nothing. Needless to say we did have a parachute bank to go to, but we are still in the 'myre' with Lloyds TSB. We are quickly going down and I'm sorry to say I dread every waking moment of our life at the moment.

Please keep trying MSE Team you are our only salvation at the moment!

Same here, for all the people who think it's fair for the banks to shaft us.

Imagine going to bed at night and not really giving a toss if you wake up or not.

CAMEO

willo65 wrote: »

not true, maybe in the past but a lot has changed.

A lot changed in November 2007 after the initiation of the Test Case
all the banks changed their T&Cs (except nationwide) and the cleaver QC s in the HOL appeal pretty much blinkered the Lords in the direction of modern T&Cs as opposed to Historic T&Cs (pre Nov 2007).

I estimate at least 95% of claimants (in terms of £) are concerning pre Nov 2007 rule changes yet less than 5% of the test case relates to them. I doubt the OFT would have had such a job convincing their Lordships if the "historic" T&Cs were still in place.

Some of the old T&Cs even stated that the charges were to cover their administration charges.

There was no mention of "to cover free banking" WHAT SO EVER until after the launch of the Test Case.

Going forward I don't think I would have a problem with paying between £0 and £5 for transgressions.

Looking back I am absolutely stomping about the fact that I was charged £35 (by HBOS) for not having enough to pay my £20 minimum payment on my HBOS credit card prompting a £25 late payment charge on my HBOS card and a £28 "over limit" charge on both my HBOS current account and HBOS Credit Card.

So my £20 non payment cost me £116. Yes I know I could have applied for a n overdraft extension but by the time I the reality that I only had £18.50 left on my OD facility hit home the damage had been done.

Banks will have us believe that was a series of simultaneous individual applications for (£1.50!) over draft extensions (if the first one failed for £1.50 why would I want another go for £36.50 ?).

Chrysalis

natweststaffmember wrote: »

Again, you lost me kinda half way down the page. Keep reading the judgment

you a good contributor and I for one thank you for your input on here.

I agree technically the supreme judges are law judges, however I am not naive to think they have no political interference, I would expect its quite probable. The media even reported part of the bank's defense was if they were to lose then a wave of litigation would come and it would impact their government assisted recovery.

natweststaffmember

Chrysalis wrote: »

you a good contributor and I for one thank you for your input on here.

I agree technically the supreme judges are law judges, however I am not naive to think they have no political interference, I would expect its quite probable. The media even reported part of the bank's defense was if they were to lose then a wave of litigation would come and it would impact their government assisted recovery.

I think you need to read the transcripts from the HoL as well since Jonathan Crow, QC also countered that argument in his response(the QC for the OFT which went largely unreported unfortunately). There is a huge amount of things that you have to read on the case including transcripts, defences, OFT case, judgements etc,.etc,.
The OFT unfortunately got side lined into regulation 6.2(b).
Pity but the avenue on regulation 5 is still there.