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

edwace

Excessive bank charges are not subsidising your free banking that’s a naive attitude that shows a complete ignorance of how the banking system works.
Unlike Building societies banks don’t have to keep enough money in reserve to pay out if everyone wants to withdraw their cash all at the same time and that gives them billions of pounds to play with, give anyone billions to play with and they can afford to let their customers store their money without charging them for the privilege.
I recently had to sort out a bank problem for a woman on a low fixed income who was a `deserted by her husband` singe parent carer for her disabled child. The bank in question was taking 65% of her total income in charges every month; the charges had initially started because a utilities standing order had bounced due to lack of funds (£6 short and she had a credit of £200 going into her account 2 days after it the standing order was due). This first £35 charge then caused another lack of funds charge for another standing order total charges £70 and so on and so on until very soon more than half of her meagre income was lost to bank charges.
I personally have never paid a bank charge, I know how to get banks to fund my business with out it costing me, well bully for me!
OK Mramra the woman is naïve when it comes to money and banking she even trusted that banks are ethical and would help her manage her money never mind the 12 months holiday insurance they sold her on her `banking review appointment ` (she can’t afford a summer holiday never mind multiple holidays in a 12 month period). And maybe she has an excuse for being a little tardy in keeping track of her bank account; I think most people would have little enthusiasm for that task if they were a 24/7 lone carer for a severely disabled child.

So try to understand Mramra a large percentage of the money you naively think pays for your free banking is taken from people who are not living it up on overdrafts, it is being cynically extracted in the worst robber baron way from the accounts of people who can ill afford it and are being forced into an ever increasing debt spiral simply because they are preoccupied or naive or ok maybe not to clever when it comes to bank accounts, those are the people banks should be helping not robbing. Have you ever really asked yourself what actually happens to all those lovely charges, may I suggest you take a look at the bonus payouts for banking executives?
[FONT=&quot]Ps we got her money back the banking code and the hint of publicity works wonders.[/FONT]

JHC

In some places, such as France and Hong Kong, unauthorised overdrafts on current accounts are not allowed at all - they are regarded as a form of stealing.

euronorris

unkle wrote: »

Don't waste your breath DTTVH8R, the something for nothing brigade will never see our side just like we can never see theirs.

One's thing for sure though, the face of banking will change. It's going to be much harder to get a bank account when all of this is finally settled. Imagine the scenario;

Dear Mr Banker, you can no longer charge those who bounce, go over their overdraft or limit etc etc.

Mr Banker says 'fine, i won't give them an account then'. Other bankers will set up 'special accounts' and charge another way.

It's coming............

Well, they manage very well in the Netherlands without such charges.

Everyone pays a small fee for their banking. If, you should happen to go into an unauthorised overdraft a little, then you pay interest on it. End of.

And it works. The average household debt here is much lower than the UK's. (for reference: http://www.huppi.com/kangaroo/8Comparison.htm)

I still don't understand why so many of you think that you are ENTITLED to free banking. You're not. There are costs involved. Currently, they are simply being swallowed up by those on a lower income. Who ironically, cannot afford to pay it back at the same rate as the charges and interest are being applied.

And then, when it becomes far too big to manage, and they declare themselves bankrupt, you moan about it.

Perhaps it's time to stop looking down on people and start looking at solutions. Clearly these charges are not a solution. If they were, the country would not be in such a mess financially.

james10999

It's not worth continuing this fight.

I think most of the regulars that use this site now are NOT the ones who are racking up loads and loads of bank charges for not having money in their account etc... Yes you might have been able to claim them back, but you shouldn't have gone overdrawn in the first place!

I'd much prefer to continue with the same system as we have now. If this got changed, we would move towards a more structured fee processed banking system. At the moment, the bank get's their money from the numpties who go overdrawn all the time. I'm happy for this and to keep my banking free!

mangle101

This is how the Supreme Court explained how banks financed free banking:

20% of people fall into charges while 80% do not

Income from the 20% of people is 30% of total income, while income from the other 80% of people is 50% of total (there was no explanation as to where the other 20% of income came from).

20% of the people paid charges and interest, but obviously used more services.

80% had lower interest applied to their accounts - that is where the 50% income from that group comes from.


Maybe from where they have fleeced people with mis-sold PPI

poppingjay

DAYTIMETVH8R wrote: »

Okay, I haven't read every post because quite frankly I've had enough with this whole bank charges thing but it provoked me to see ML shouting his worthless opinion at a news camera on Wednesday and so here I am. When someone uses an unplanned o/d they are taking money that DOESN'T BELONG TO THEM! Why shouldn't there be a charge? If people kept a close eye on their bank accounts then they'd have more of a clue, it isn't even difficult. Banks also have specialised units to assist people in financial difficulties. Take Lloyds TSB for example.
Internet Banking: FREE
SMS service: FREE
Telephone banking: STANDARD 0845 call charge (free from some landlines)
Mobile Banking: £2.50 PCM
Cash Machines: FREE
Monthly Statements: FREE

I mean come on, you can have a bank account for nothing, zilch, £0. All that they ask is that people remember how much they've got in there and how much they've spent. Twist it any way you want. You've tried to spend more than you have earned. And as for GMTV's Mr. Lewis. I'd shut up if I were you. I mean really shut up. Because you're leading a small minority of those who can't keep track of their own money into a fight that could result in the rest of the country - who can add up and take away without messing it up - to be charged for what is at the moment free banking. Yes the banks profit out of it. And if one bank said "okay, no more charges" I'm confident that this option would seem attractive to the masses. But let me put this question to you: in the middle of a recession, would you want to be with a bank that was only profiting fractionally - if at all - comapared to its rivals? Plus how would banks make the money back? Everytime someone loses a debit card, or has it stolen. Do you want to pay for a new one? I wonder what the banks will charge? £2? £5? Who knows. What about savings accounts? Do you want to pay for those too? And then that'll be the next complaint from the public: "The banks are screwing us for every penny we've got." Friends, please don't direct your complaints to Lloyds, HSBC, Barclays, Halifax, FSA, FOS or any other reputable financial organisation. Direct your concerns and complaints to Mr. Martin Lewis, Chairman of moneysavingexpert.com.

That's ever so slightly rich - supporting an industry that has made itself fabulously wealthy by lending out money that it doesn't have. Fractional reserve banking is a con. They aren't just happy to bankrupt the poor, they have their sights set on the whole country. As people so frequently point out - they are a business and not a charity - so why the bail out? Those mega bucks should have been made available to cover individuals lost savings. Real humans should always take precedence over industry surely?

LookingUp

Been following these threads for the last few days. Should state firstly that I used to work for one of the banks (until 1997); one of my duties at various times included reviewing accounts daily and taking the decision whether or not to pay items. Initially no charges were levied but following the introduction of 'free' accounts, then an Unpaid charge was introduced. Some discretion was allowed at that time and I have to say I could never see the purpose in refusing to pay a customers direct debit/cheque which was causing a £20 excess over any agreed limit; but then charging him £25 to do so? (Figures used purely as examples) You're not helping the customer; you still have to look at the same excess every day until he clears it and ultimately if you force him into increased debt through these charges, you amy never get the money back anyway.
Seems to me that that element of using discretion to make that judgement has gone. Yes, there is a case for levying a charge for 'bouncing items' but rather than slap it on the account immediately, add it to the accrued charges which are now notified to the customer in advance ( they didnt used to do that until a few years ago). At least the customer would have the opportunity to plan for it and it would avoid the iniquitous scenario of incurring a further charge simply because of charges already levied.

jonpnash

Since the new template letters will take a while, will there be any risks with sending my own letter in the mean time? The waiver has been lifted so I assume that the banks have to act unless they want to take it to court, similar to before July 2007. What if I submit the original letter and exchange the details to now include clause 5 and the new arguments? Could it do any harm?
The reason I ask is that there might be an time advantage to getting things done quickly before new waivers are put into place, for example.
The arguments for a new case are pretty much given in the supreme court's Judgment, and so would be nice material to stand up in county court.
I am sure the new template letters drafted by the QC's will be the bees knees but maybe there might be a advantage to getting in the door early? as when complaining there are time limits for the banks to act.
Thanks in advance for any replies.

Penalty_charges

jonpnash wrote: »

Since the new template letters will take a while, will there be any risks with sending my own letter in the mean time? The waiver has been lifted so I assume that the banks have to act unless they want to take it to court, similar to before July 2007. What if I submit the original letter and exchange the details to now include clause 5 and the new arguments? Could it do any harm?
The reason I ask is that there might be an time advantage to getting things done quickly before new waivers are put into place, for example.
The arguments for a new case are pretty much given in the supreme court's Judgment, and so would be nice material to stand up in county court.
I am sure the new template letters drafted by the QC's will be the bees knees but maybe there might be a advantage to getting in the door early? as when complaining there are time limits for the banks to act.
Thanks in advance for any replies.

think, if you was a bank you would fight the first few cases full on, they need to try and discourage the public, my advice is be patient for a week or so. let us sort a plan out and I am sure ML will then advice you as to what is the best course of action.

Dylanwing

Don't waste your breath DTTVH8R, the something for nothing brigade will never see our side just like we can never see theirs.

Stunning hypocrisy of the day! You moan about wanting free banking paid for by others........