GE Capital/Money

Smasher

They have an automated system that doesn't cost anywhere near £12 if you exceed your limit or pay late. It is a pure profit machine, nothing more.
They can fight all they llike to keep the £12 charge but I can say with absolute certainty that they will lose because there is no way to justify it.

Dylanwing

They can fight all they llike to keep the £12 charge but I can say with absolute certainty that they will lose because there is no way to justify it.

That remains to be seen, as automated systems still incur overheads. Quite how you can say that 'with absolute certainty' is beyond me, you must have a lot more faith in the UK Legal system than I have. My feeling is that, once the Courts get overloaded with cases, they will uphold the £12 fee as being fair.

Smasher

Ok then, I can say that as long as there is a sane judge sitting in the court thy will lose. I base my statement on the fact that everyone who has challenged the £12 charge has succeeded, not one single failure..

The OFT has already ruled on this and they have said that £12 is the point at which they will intervene. This does not mean £12 is fair, they were quite clear about that.

In order to keep £12, the credit card company will have to show that their costs are £12. We all know that they can't possibly do that. The OFT have also already ruled that they will not accept credit card charges being disguised as 'servce fees'.

The only way a £12 charge can be justified is if the law was changed to allow penalty charges, which would cause huge damage & chaos to the economy..

Dylanwing

Smasher, not trying to provoke an argument, just adding a note of caution. My suspicion is that the marginal cost of each transgression is well under £12, but if you add the actual overheads in terms of staff, premises, computer systems and IT support, the figure rises considerably. A clever, creative number-cruncher could probably justify the £12 fee.

Smasher

Well yes, theoretically he could, but the figure of about £2.50 which was estimated by the experts who made the whistleblower programme had already factored in every possible overhead.
A company of this size would be taking a hell of a risk by walking along the lines of fraud which is why I suspect they have not gone this route before. They have had no problem with breaking the law and abusing the legal system in order to make profits so far, so surely your 'number crunching' scam would have been looked at before..

Dylanwing

Fraud! Scam! Never!! Banks are pillars of virtue dedicated to low-cost, high-quality service, and have a great sense of social responsibility. Bear in mind that our Government Accountants can actually make PFI deals seem like value for money, and if they can justify that, they can justify anything.
I don't necessarily disagree, but Banks are part of 'The Establishment', and I have little faith in the judicial system in these types of cases. My second worry is that the 'Law of Unintended Consequences' will come into play, and Banks will recover the money with higher interest charges, annual fees, and future breaches might be met with a cancellation of the facility.

Smasher

I think you're absolutely right. I was just making the point that if there were some miracle way to keep the charges within the law, they would surely have tried it & attempted a defence with it by now.

Unfortunately for the OFT and for the credit card companies, the ruling has already been made over a year ago so £12 overlimit & late fees are easy claims to make now.

The whole thing may just shift sideways, but at least now, if anything, consumers have woken up en masse to the fact that financial institutions are just sharks waiting to rip you off at every opportunity, who may yet prove to be above the law and those who are supposed to regulate them can't do half as good a job as a bunch of guys who set up an action group on an internet forum.

It is a sad thing that we have to tell our kids when they grow up, never trust the bank!

Dylanwing

I worked for a Bank in the early 80's, and I can honestly say that the Managers really did all they could to look after their customers, and the benefit was that marketing was easy, because they trusted you. In my latter years, we were being encouraged to push Endowment Mortgages, and lending decisions were slowly moving to computer scored or Head Office. The older staff kept warning that Endowment Mortgages were not a good product, and that traditional repayment is better for most people, but dissent was soon suppressed. soon after, the rot really set in and Banks are now rated very low in the Trust stakes.
Totally agree about Martins work, proof that the Internet can be a force for good by uniting a lot of disgruntled and ripped-off individuals. Mind you, if such a glaring legal argument can go un-missed by the Regulators, it makes you wonder. Then again, they allowed carp mortgage lending, Northern Rock to implode etc. proving the success of light regulation!
Regarding the Banks defence, I got the feeling that they mis-underestimated the level of claims, and hoped that a Friend in High Places would bail them out. Also, they were working individually and did not want to be the one to break ranks - Now they seem to be working together to defend their odious practices, it will be a much tougher fight. One think I am sure of though, whatever the outcome, the Banks won't be the losers in the long term.

Smasher

Yes it's frustrating that they can flout the law & make their customers jump through hoops and take their "regulators" on wild goose chases whilst they fiddle with the rules & continue to rake in obscene profits from the misery of the unfortunate.

Worst of all, the bottom line of your last post about sums it up. What they lose on the swings, they will more than make up on the roundabouts.

What is most frustrating of all, is that it is pretty much obligatory to have a bank account now. Even those on benefits are forced to have one. If there were a way to pay bills the old fashioned way rather than direct debit & standing orders e.t.c. then people could vote with their feet. Unfortunately, there is no choice right now.

angelwillow

angelwillow wrote: »

Just had a letter from them today saying as from 9th July 2007 they are no longer refunding charges except the difference between the charge and £12 they say is a fair charge agreed with them and the Financial Leasing Association.
And guess what, they received my 'request' on 10th July!

Anyone else been fed this line? I guess it's the courts now then and all for £105.

G.E have now had the cheek to send me £11.02 as a goodwill gesture to cover 'interest' on the amount I am claiming!
Still gonna take them to court.