MSE News: CONFIRMED - OFT gives up bank charges battle

noh

I have looked at the amounts that Nat west charged. I still dont know how you got to £4200 in 3 months. To get to that level you would need to have had more than 90 unpaid item fees at £38 plus refferal fees which were capped at £90 a month plus 3 months of maintenance charge of £28.

I understand the effect you are describing.
What I dont understand is how you let it continue after it first coming to your attention.
I also dont undersand why you didnt notice that you had gone £50 overdrawn in the first place and correct the situation at that point.

The level of charges applicable to the account were available to you.
I dont believe they need justification. They were what they were.

If I buy something I dont ask for a justification of the price. I make a decision on whether I'm prepared to pay that price and if not I don't buy.

You are right it has never happened to me probably because I do take responsibility for my own finances.

Whether you find it offensive or not it was within your power to prevent the charges reaching the level they did.

gaz2954

noh wrote: »

I have looked at the amounts that Nat west charged. I still dont know how you got to £4200 in 3 months. To get to that level you would need to have had more than 90 unpaid item fees at £38 plus refferal fees which were capped at £90 a month plus 3 months of maintenance charge of £28.

I understand the effect you are describing.
What I dont understand is how you let it continue after it first coming to your attention.
I also dont undersand why you didnt notice that you had gone £50 overdrawn in the first place and correct the situation at that point.

The level of charges applicable to the account were available to you.
I dont believe they need justification. They were what they were.

If I buy something I dont ask for a justification of the price. I make a decision on whether I'm prepared to pay that price and if not I don't buy.

You are right it has never happened to me probably because I do take responsibility for my own finances.

Whether you find it offensive or not it was within your power to prevent the charges reaching the level they did.

No some charges were for paid items forget the term think it was "referrel charge " no it wasnt possible for me as you say to "prevent the charges reaching the level they did " I asked for an initial amount back they didnt so how can I pay my wage cheque for 2nd and third month into the account if all it was doing was to be eaten up in charges . That is daft so your saying my fault with £4200 put wages in have no money to pay for food pay any bills or mortgage and get my house repossesed all because Nat West Bank decides to charge £4200 as it costs them £4200 to maintain my account . That is plain daft you dont live in the real world it iddnt cost the bank £4200 to maintain my account for 3 months bounce my cheques and direct debits and send me letters actually it didnt send any letters so that couldnt be included in the £4200 as I said its a snowball effect . I dont object to paying "reasonable charges " that sum wasnt reasonable and 99.% of people would agree with me it seems your in the minority

noh

When you first found out about the charges you had the option of cancelling all the DDs and standing orders on the account so as not to incurr any more paid referral fees or unpaid item fees only the maintenance charge of £28 a month and of getting your salary paid into a new account with another organisation.
You didn't do this.

Prior to that if you had been keeping control of your finances you would not have gone overdrawn in the first place.

Im not saying the fees are justified. I believe they do not require justification.
You certainly could have acted to minimise the fees you were charged.

It was your lack of control of your finaces and your failure to take action after the first month that caused the fees to get to the level they did.

I believe that it is you that doesn't live in the real world. You seem to wan't to blame others when what happened was a consequence of your own actions (or lack of).

pingchris

musical_norwich wrote: »

This is actually very good news. I am delighted!

Why should those who knew what the bank charges were, but carried on spending money that wasn't theirs, be rewarded retrospectively for their behaviour by the courts?

This country is going to the dogs due to people spending money that wasn't theirs in the first place: banks, consumers and the government. This judgement is a first sign of a return to common sense and normality.

On the one hand this site encourages being thrifty and living within your means, on the other it believes that the thriftless should be rewarded for their irresponsibility. You can't have it both ways as the courts have said!

think again mensa

Sol00

dunstonh wrote: »

Good decision. I know that won't be fashionable with those on this forum but there has to be some common sense in that you cant borrow money that isnt yours for free.

Whilst I do think the charges are high, the banks have mostly revised their charges now to be fairer (although some actually pay more under the new charges than the old). However, there has to be a consequence to unauthorised overdrafts to put people off from doing it.

A big problem now may be all those that paid up front fees to claims companies. We know the cashflow on many claims companies is not great and they were built on a pyramid scheme. With a major potential source of income removed and they now having to return some/all of the up front fee, will they have the money available to do that or will they go into administration like some have already?

I am confused at your post. You begin by saying it was a good decision, but you then concede by saying the bank charges are high. Then you continue by saying the banks have 'mostly' revised their charges to be fairer - who decided they are fairer? The banks, or an independent, impartial organisation? Or is it just your opinion that they're fairer?

I have to disagree about your point about banks having to penalise those that go over your overdraft by imposing high charges, which is what you're suggesting. A sensible approach by the banks would be simply to close the account that has an overdraft facility for those that are obviously abusing their accounts instead of pushing them into further, unaffordable debt, but that isn't likely as it doesn't generate revenue for them.

Chrysalis

some may have guessed already this really winds me up.

but dunstonh and others these fees are been charged to people who are not in unauthorised overdrafts they are been applied to payments that do NOT clear.

sigh

Chrysalis

chris1huk wrote: »

My bank(halifax) has changed their charges, £1 per day for an authorised overdraft.. £5 per day for an unauthorised overdraft.

I am paying double with this new system to the interest I used to pay with the old system. I find this new system wrong, and it only really benefits people who have overdrafts in the region of £2000 - £2500

If im close to paying off my overdraft, I am still charged this flat fee of £30 a month rather than a fiver or tenner interest..

To me its still unfair, but then they will never do anything in the customers favour.. oh and they arent paying interest on credit balances.

yes that is largely punishing people who are only slightly in an overdraft, it seems to be whatever charges are cooked up they always aimed at the same group of people. Also the charges for an authorised overdraft there is a new avenue as well. Makes an authorised overdraft very expensive now.

Chrysalis

discoass wrote: »

you wait till it happens again(hope it doesnt by the way) u will hit a brick wall

here is a quote from hsbc terms and conditions for an OD which puts out the "stealing from the banks " flame


"You would be surprised how many current account customers issue cheques, or use their debit cards, and when we receive them, there's not enough money in their account, or any existing formal overdraft limit is insufficient.
It is not surprising really. We all lead busy lives, so it's hard to keep a track of what's going in and out of your current account everyday. And, we know you can't control exactly when debits hit your account every day.
When this happens, we assume you would like us to pay that debit and that you're making an informal overdraft request. And if we agree to it, the overdraft will be provided for 31 days. If another informal request is made during this period, we will treat it as a new request."

so there u have it

which also raises another point.

if they approve the request the overdraft is effectively authorised.

natweststaffmember

davidgmmafan wrote: »

I've noticed a disturbing trend in comments by people who are pro banks, or pro the status quo whichever you prefer.

They largely seem unaware that the way we all look at charges is totally different than the legal fiction the banks created to scrape a win.
I don't agree with you on this on the legal fiction. Many of us are non legal people so it is for those with the legal knowledge to explain to us/
They are not penalties, oh no (even though the above people would accept they are and indeed should be punitive), they are charges for a service. If this is so then why doesn't the bank invoice seperately for them? Or putting it another way why should the debt to the bank be put before any other payments owed?
The penalties in law was a doomed argument, legally, because for them to be a penalty they have to be outside of the contract, ie for non performance of the contract. They were always within the contract and were for non performance within the contract. There are separate issues with regards to the questions you ask but they are valid ones to ask imho.
This one change would stop the charges spiral so many people refer to.

Also as I've said many times if you accept the banks argument that the charges pay for free banking then you should be praying people do not take you advice as, if they did, free banking would disappear anyway.
Banks didn't state this, QC Sumpton suggested that it would be the possible restitutionary damages, ie a secondary issue that could lead to the change in the business model of the banks to "free if in credit" to a fee based structure. Furthermore, the charges themselves do not pay for the current account as a whole and if you read OFT 1005c you will find out the details of it.
Its just like with credit cards the people who pay thier cards off in full don't make much at all (if anything) for the bank. The big bucks are in the fees and the people who just pay the mimimun each month.
Which is a legal mechanism ie the interest.
It seems to me inconsistant to say on the one hand, I can't understand what all the fuss is about. Its easy to avoid the charges, the implication being everyone should be like you... Because if that happened the the banks own logic dictates your free banking would be gone for good.

The story ain't over and I have yet to see the fat lady singing on this issue.

gaz2954

noh wrote: »

When you first found out about the charges you had the option of cancelling all the DDs and standing orders on the account so as not to incurr any more paid referral fees or unpaid item fees only the maintenance charge of £28 a month and of getting your salary paid into a new account with another organisation.
You didn't do this.

Prior to that if you had been keeping control of your finances you would not have gone overdrawn in the first place.

Im not saying the fees are justified. I believe they do not require justification.
You certainly could have acted to minimise the fees you were charged.

It was your lack of control of your finaces and your failure to take action after the first month that caused the fees to get to the level they did.

I believe that it is you that doesn't live in the real world. You seem to wan't to blame others when what happened was a consequence of your own actions (or lack of).

They still charged me overlimit fees on top of everything else . i understand what your saying but dont agree