Co-Op getting annoyed with refunds...?

CopperPlate_2

So what about the bank forcing the OP to abide by "the law"? A contract is a two way thing - if one breaches, the other is usually entitled to sue and vice versa. I see no problem at all if someone has persistently breached their side of the contract for the other party to take some form of action to remedy the situation, be that closing the account or not. And this can be read as the bank or the individual concerned taking the action.

dchurch24

Point taken - and quite right. If there are persistent breaches of any contract, then the contract can be ended by the second party.

To answer your question about the bank forcing the OP to abide by the 'law' (not sure why you put quotes there though): To breach a contract is a matter between parties - not a matter of a broken law.

What the bank have been doing is profiting from a breach of contract of the other party - which is a matter of law. The OP hasn't broken the law, so there is no point the bank trying to force him to abide by it when he already is.

CopperPlate_2

Sorry, the reason I put it in quotes was because I thought you were referring to the criminal law, whereas I was referring to the contract (which is law of a different sort of course!) I see your point, re: the matter is one of contract, but at the end of the day as you are pointing out the banks have been profiting from the breach, and now appear to be taking a harder line with those who have reclaimed charges and yet still appear to be unable to run their accounts to the standard expected by the bank. The OP has broken the contract by failing to adhere to the terms, etc. Strictly speaking he/she has broken the (law of) contract, that is all I meant - not the criminal law.

dchurch24

Ahh - ok. Sorry for my misunderstanding.

CopperPlate_2

No problem. Very civilised conversation we're having isn't it

dchurch24

Just the way it should be ;-)

Rafter

The fact is that there is a cost for Smile for managing this situation, and that cost is not being covered by charges or income from this customer.

Co-op who own smile are an ethical customer owned organisation and I am sure abide by the 'treating customers fairly' regulations and the banking code.

If a customer refuses to manage their affairs and refuses to pay reasonable charges then what should co-op do? Give worse rates of interest to customers who do abide by the rules? This isn't a bank that is giving billions of pounds to its shareholders - it is owned by it's own customers.

At some stage the OFT will rule on bank charges although the determination of actual charges may need to be tested in court at some stage.

Personally I'm not a fan of the German or Dutch system where a customer could get stranded unable to fill their car with fuel or pay for food for their children as a result of being a few pennies overdrawn.

Customers and banks have sleepwalked into a situation where it is very easy to borrow money and where you don't have to monitor your finances that closely, all proped up by unlawful charges to cover the costs when customers overstretch themselves.

Take away the charges and banks have to take more care with their lending and be more selective about their customers.

Sounds like rChrisp has been the victim of the latter.

It is almost a side effect of being a 'pure' money saver. At some point organisations will have enough of losing money from refunding charges, stoozing, buying products and services below cost and the organisation will turn round and say 'no, we don't want you as a customer any more' which at the end of the day they are totally entitled to do.

The situation for now though is that companies and their marketing departments are happy to keep throwing out deals to be exploited by canny consumers.

R.

dchurch24

You've hit the nail on the head.

There are two sides to the coin. One, prop up the attractive deals by penalising the less financially astute or financially able, or, two, don't take risks by lending to all and sundry.

Personally, I think it's time that we went back to the situation where banks don't take the risks - at least that way (and I don't mean to be alarmist), we'll see less debt-related suicides.

If the OP's situation is the start of banks opting for the latter option, I for one, welcome it.

I do understand what you mean about being stranded without petrol etc..., but then is it right to rely on a third party for things that are (or should) be within your control?

westernpromise

Rafter wrote:

The fact is that there is a cost for Smile for managing this situation, and that cost is not being covered by charges or income from this customer.

Well, it could be covered: Smile could charge according to its actual loss arising from the breach.

In that case, the OP would be hit with a fee of say £1 per contract breach, or something of that order. Plus perhaps £0.50 if a letter has to be written, or £0.15 if it's an email.

The trouble is that Smile has lied and lied and lied about the true cost of such contract breaches. It has insisted, right up to the steps of the court, that it costs £38 for you to go 1p over your overdraft limit.

It can't very well now charge £1 to cover its costs. It has to stick to the lie - that its cost is £38.

This customer has shown that s/he will not stand for charges like that. And therefore Smile has painted itself into a corner whereby it can either lose money on marginal contract breaches, or lose the customer's business.

The one thing Smile can no longer do is the honest thing, which is to charge only what the breach actually costs.

CopperPlate_2

So where is the incentive to manage the account properly when you are charged £1 to stop using - what in essence - is other people's money? I appreciate that £thirty-odd is over the top, but at the end of the day, it works both ways. I'm not going to get into the spiral of talking about the where-fors or what-nots about charging, etc, but if the banks reclaim the actual costs of the breaches - using your example of 15 pence, etc., then how is the actual reclamation by staff being funded? Certainly not from the proceeds of any breach fees that's for sure. So where does it come from? Charging everyone a flat fee for the use of their account? So people who run their account above the limits (and I'm only talking about those who run it poorly on a 'care-free' basis, not the cases dchurch will tell me about involving cereal) cost the bank money to reclaim the actual costs of the breach while the rest of us pay the bank staff who are employed to chase these fees.

Yes the banks could charge the exact costs of reclaiming, but if you count up the number of people who routinely go over their limits, etc, and the number of staff hours put in to actually reclaiming the costs, you might find it works out to be more than just pence. I think we're all making great suppositions since none of us know the exact costs involved; and yes, we would know if the banks took it to court which they've not done as yet.