Variation of Terms and Conditions

JohnPeard

When we start a bank account we sign that we accept the T&Cs given the time, and this of course is a contract.

From time to time the banks (and credit card companies) write that they are varying the terms and conditions.

However, if you contact them and say that you do not agree - e.g. that you believe the interest rate is too high, the charges are excessive or whatever, what has happened to the contractual agreement?

The bank would simply state, I would assume, that since you are continuing to operate the account, you have agreed de-facto to accept the new terms.

But equally, I could state that since they are continuing to operate the account, they accept my objections and cannot therefore pass on those new charges.

If I write to (or phone) the bank and say "I do not agree that you are entitled to deduct penalty charges", presumably the bank no longer has your consent to remove the charges. It can of course say, fine, we no longer have an agreed contract so close the account - but if it doesn't how can it legally be entitled to make charges if it continues to operate the account?

In summary, the bank seems to have the power to change T&Cs but the customer doesn't - why?

AndyR_3

I think because it's in the T&Cs. But they have to give you notice, and if you decide to close the account as a result, they can't charge any penelties for doing so.

JohnPeard

I really don't understand this - but am sure it is a legal point.

There is much debate about bank terms and conditions being 'unfair' and therefore unlawful. But it is clear that it is unlawful to change a term of the contract to the benefit of one party without the consent of the other.

If I then say I do not agree to a change, it is not necessary for me to close the account, but for the bank to do so.

If it chooses to continue to operate the account, surely it would have to be
on the original terms?

oldfella

if you write to say you accept the contract, but modifying the terms as you wish - then if the bank dont reply I would say they have accepted it - but you might need proof of delivery

they are more likely to write back saying accept our terms or close the account

Mike

tom188

The bank is offering the product - the current account. They can therefore adjust there terms and conditions subject to the agreement you made when you opened the account.

If the product no longer suits the customer, they can close their account. There is no reason why the customer should continue to hold the product if they do not agree to the t and cs.

JohnPeard

AndyR wrote:

I think because it's in the T&Cs. But they have to give you notice, and if you decide to close the account as a result, they can't charge any penelties for doing so.

OK, so the original T&C must have a clause stating, something like

"We retain the right to change these T&Cs" (Pretty meaningless contract then in the first place ??) (i'm not talking about variable interest rates etc., but actual terms)

Later -

Bank to customer "We're changing the T&Cs to our benefit"

Customer "No, don't agree"

Bank "Close your account then"

Customer "No"

At this point, the original T&Cs must still apply, because there is no contractual agreement to amend.

Bank's action - Doesn't close the account - so original T&Cs must apply.

Bank's action - Closes the account.

Hang on a mo, Mr Bank, you were forcing me to accept a new or amended terms for your own benefit, and therefore this action has caused me loss (incovenience and expense of moving accounts). It is unlawful to change a T&C without my consent.

tom188 wrote:

There is no reason why the customer should continue to hold the product if they do not agree to the t and cs.

Oh, but I do agree to the original T & Cs, not the amended ones.

If I do not abide by the original conditions, the banks can recover their costs. The converse also must apply.

By the way, this thread was sparked off by HBSC announcing they were to differentiate between 'formal' and 'informal' overdrafts, with a £25 'arrangement fee' for 'informal' ones, applied monthly.

oldfella

Hang on a mo, Mr Bank, you were forcing me to accept a new or amended terms for your own benefit, and therefore this action has caused me loss (incovenience and expense of moving accounts). It is unlawful to change a T&C without my consent.

---

but they have the right to withdraw the service at reasonable notice, if you dont agree their modified terms - unless the original terms specifically give you the right to the service on the original terms once modified.

Mike

tom188

The bank is providing a service to you, they are not forcing you to have the account. If you dont like what they are offering go elsewhere.

Say you get on a bus you find out they have put the fare up. If you said "no I dont accept this price rise and am not going to pay it" would you expect them to still carry you at the original price? I think you would have to make alternative arrangements. Would you expect the bus company to reimburse you for this inconvenience?

JohnPeard

Sounds to me that T&Cs don't mean diddly squat!

tom188

They set out the current requirements for bank and customer conduct.
They dont constitute an irrevocable contract.

JohnPeard

Umm.

From my very limited understanding of contractual law :

The T&Cs signed with a bank are the basis of a contract between the customer and the bank.

Both parties are obliged to adhere to the conditions of the contract until one or other of the parties terminates the contract by closing the account.

A party can not alter the T&Cs of a contract to benefit that party without the consent of the other.

If one party writes to the other to state a variation of the T&Cs, a non-reply by the other does not constitute an agreement to amend the contract, or consent.

Why is this important? Because if charges have been levied on account as a result of a variation of the terms that were not in the original T&Cs that the customer signed, the customer would be perfectly entitled to claim them back on the grounds stated above.