MSE News: CONFIRMED - OFT gives up bank charges battle

esmerellda

Actually its 2.2% (1.2 million) of accounts (54 million) that have FORMALLY complained about unfair charges.

Gorgeous_George

kittiej wrote: »

So shall we go in alphabetical order then?

The only way to decide is to have an MSE poll.

GG

MB101

I work in a high street bank and although it's not within the remit of my usual duties I frequently end up speaking to customers who have had charges placed on their accounts.

The vast majority of these customers are low income but by no means "poor"... they simply haven't been prudent enough to leave a buffer in their account and have ended up being charged for something they agreed to pay (should they go overdrawn) when they opened the account.

There will always be exceptional cases where it seems very unfair to heap misery on someone who's financially feeling under pressure, but a bank has no way to filter those being irresponsible from those who could not have avioded going over their limit.

I'm glad to see a reduction in these charges but I hope that "free" banking will continue in the future.

Premier_2

Following on from the announcement by the OFT, it appears the Financial Ombudsman Service has also thrown in the towel over many of the existing 1.2 million claims

... The Court ruled that the fairness of unauthorised overdraft charges could not be challenged on the basis proposed by the OFT. The OFT has since announced that it will not make a further legal challenge on any new grounds.

The ombudsman has to take the law into account when we decide cases. This is why the Supreme Court's ruling is very important in our work on bank charges.

So we have considered the Supreme Court's decision – and its implications – very carefully. Our view is that the legal ruling means we will not generally be able to help with cases that involve "template" or "standard letter" complaints about unauthorised overdraft charges...

http://www.financial-ombudsman.org.uk/faq/bank-charges.html

The link goes onto give some advice to those in financial hardship

what about complaints that involve bank charges as well as financial hardship problems?

If you are in genuine financial hardship, this does not affect the legality of the charges. But it is relevant to how your bank or building society treats the amount you owe. Give them the necessary information about your financial circumstances to enable them to consider your situation fully.

If your bank or building society agrees that you are experiencing financial hardship, they should suggest an appropriate settlement. This may or may not involve reducing the amount you owe – depending on the circumstances...

(my highlighting, original highlighted text was in italics)

moo_cow

My husband is still in work but they've cut his hours drastically. This is the problem. Having no dependants doesn't entitle us to help. My bank charges were actually 3 in one go. The £1200+ total is charges they applied to the charges. This is the problem. Despite my attempted reasoning with them (LTSB) they would not back down. There was no help at all. They firmly dug their heels in. I know everyone is entitled to their opinion, life would be pretty boring if we all behaved the same after all. But my issue is this, Where at any point can approx £1100 piled on to a £105 'penalty' be right, justified and perfectly okay? It's cruel and uneccessary. I was a damned good customer. If it had been one charge they would have waived it as my account had been run perfectly. This I was told. But because it was 3 in one go..........
People are forced into this neverending spiral with no way out.
I have NEVER not at any point said that a 'penalty' should not be paid by a consumer. But £35? come on, that's ridiculous. It was a returned direct debit. It wasn't as if they paid it for me even. This HAS to stop!

orc_2

alexjohnson wrote: »

say 400,000. wrong- 12,000,000 people got charges

(2006 figures: £240 average charge per claimant)


With 40m current accounts that is still 0.1%.

54,000,000 active current accounts (2006 figures)

That equates to approx 22%.

Quite a difference from your figure and makes quite a difference to your argument.

GiveItBack

KimYeovil wrote: »

The banks do not "rip off" the poor. Only rich people pay charges. A poor person does not have a spare £19.95 or £35 to pay. Therefore they do not allow themselves to incur charges.

What is wrong with poor customers being given a break and being supported by richer customers? You are completely contradicting yourself. Your contempt of the poor is an embarrassment to your avowed allegiance.

I work with some of the poorest people in society, and I can tell you that plenty of them do pay charges. And then get into a cycle of charges and debt that is hard to escape from.

I don't mind banks making money, but it shouldn't be at the expense of the health and lives (literally) of the poorest in society.

I don't class myself as poor, and I'm generally very good at managing finances these days - but my bank recently paid something to a company who have used an out of date card - a payment that should never have been paid. That wasn't in my budget - and there's not a lot of room to spare, but I've been charged an awful lot for their error and they refuse to return it.

Again, I expect my bank to make money from me but they've shot themselves in the foot. They'd offered a competitive mortgage, but no better than a competitor's. Guess who didn't get to make lots of money from me... And I've made sure they know. Their choice.


Now I'm lucky enough to have a back up fund, a buffer and pay close attention to make sure I don't go over limits, (although I now also have to factor in my bank's incompetence), but some people truly are on the breadline, and a single £35 charge sends them into a spiral, or forced to use doorstep lending and worse.

Very disappointed to see this happen.

Premier_2

Gorgeous_George wrote: »

The only way to decide is to have an MSE poll.

GG

Can't you organise a text vote GG?

mustrum_ridcully

@various people

Oh please cut the c@%$ about oooh think about the poor people.

I know a few people who would be classed as poor and oddly enough none of them has had an unauthorised overdraft. One friend suffered from a bad depression for the best part of two years yet somehow managed to survive on the benefits he was given. A couple I'm friends with, their annual household income is well below the national average salary of around £22k, guess what no unauthorised overdraft.

How do they manage? Well, they may be poor but they aren't fools, they know if there isn't enough money in the bank then they can't afford something. They know that when times are tough they have no choice but to cut back, turn the heating down and put on an extra jumper instead of thinking it's a fundamental human right to have a house that is 25'c. Interestingly both examples above made the choice not to have a car and to walk, cycle or take public transport.

Also how do millions of pensioners manage on the state pension (plus other benefits), I'm sure they'd count as being poor?

Do I have pity for those that got into trouble through no fault of their own (i.e. a direct debit error), yes I do and they should be fully compensated for all damages. However, I suspect the vast majority of cases of unauthorised overdrafts are from people who just don't pay attention to their finances and then cry out what must be the phrase of this decade "but it's not fair".

None of us knows for sure what the fallout would have been if the OFT had gone on and won. But I for one wouldn't be surprised if the outcome would have been unpleasant for everyone.

orc_2

Premier wrote: »

Following on from the announcement by the OFT, it appears the Financial Ombudsman Service has also thrown in the towel over many of the existing 1.2 million claims

http://www.financial-ombudsman.org.uk/faq/bank-charges.html

The link goes onto give some advice to those in financial hardship

(my highlighting, original highlighted text was in italics)

That is old news from FOS Premier and you are being mischevious in posting it. Why search for old news??


The item was published on 16 December and was in advance of todays decision by the OFT.

As it happens, the FOS would be prepared to look at new POC's. They have difficulty with some of the claims submitted which relate to fairness issues as covered by SC decision.