Bank charges not unfair. Bank wins first court case

dunstonh

No one is saying that the charges themselves are unfair, if u go over an agreed overdraft, u deserve to be charged. BUT how can the banks justify charging someone £35 for something that costs the £3ish to administer!?! And these charges, more often than not, push people further into trouble.

It may cost £3 if you cost the work involved but what about the members of staff that exclusively deal with unauthorised borrowing. Back in my banking days, my branch had 4 staff that dealt with it all day and only clerk that dealt with all the inward returns. Lets say £15k each and 10k for the clerk (ignoring pension, profit sharing, bonuses etc). So thats 70k over 250 working days. Thats £280 a day costs just for employing the staff and not including the paperwork, computers, postage etc. Typically the bank charges would come to around £350 a day. Some days more, some days you would get hardly any.

As an Mortgage advisor, I'm sure ur advice is gratefully recieved. Your judgement of others however, is not!

I'm not a mortgage adviser and I am quite free to judge anyone how I like. Having been in a position of dealing with some of these individuals over the years, my judgement is based on experience.

Accidental one off slip ups fair enough, they should be refunded (and most banks will if asked). However, why should those writing out cheques daily knowing they will bounce or using their cheque guarantee card to force an unauthorised overdraft knowing full well the money isnt there deserve to be charged.

homer_j_3

Just read the judgement and from my understanding, this case was lost for one reason alone and that was the claimant did not prepare his case very well.

The claimant was asked to provide a full list of charges with dates and reasons. The claimant failed to do this so how could he argue his charges when he couldnt even prove to the court that these charges existed?

The claimants did not specify which accounts he was claiming for. How could this help - he has been very very sloppy.

This was no victory for proving whether the charges are legal or not, it was a lesson in making sure that you know what you are claiming for and why.

Noz

greenstreetprince wrote: »

no, the banks had always paid out without cases going to court

actually, just doubled checked with some CAG emails and it does seems to be the case that previous arguements have failed in court with a small number of claimants.

Frugal_Fox

UltraViolent wrote: »

This is great news. What makes me laugh is that the same people who are claiming back fees they paid for running their bank accounts so woefully are now the ones moaning about having to pay banking fees.

Perhaps if they let little Jenny and little Timmy have bedrooms without LCD tv's, Nintendos, SKY TV they wouldn't be running their bank accounts and credit cards in the red zone.

I'm 'one of those' people who is currently in the process of claiming my bank charges back. Whilst your view on the parents of 'Jenny and Timmy' may be a little tongue in cheek - it doesn't reflect the diversity of the people who claim. I am a parent and I can assure you my own Jenny and Timmy most certainly do not have a tv in their rooms. We have one tv (a small 15" portable), no nintendo, no sky, no frills.

Whats led me to reclaim my charges? I run my account close to the wind - but rarely over my overdraft (I'm not perfect :rolleyes: ). I took the occasional charge as a slap on the wrist for not being quite on the ball. As you'll note from my sig - we've been repaying our debts for a while now. Thrills are out whilst we repay what we owe. Our choice. However DH was paid late one month - stupidly I'd set all our DD's to come out the day after he was paid - mistakingly thinking this would ensure they were paid - it did, apart from the occassion when he was paid late. By the time we found out - which incidently was over the August bank holiday last year - and we were away camping, we'd accumulated over £700 of banking charges in 4 days across 2 accounts. In effect we'd lost 60% of our income in one weekend. I do think people should run their accounts in order, however as soon as we realised what had happened we asked for an extension to our overdraft - I'd already written & presented cheques mistakingly thinking we'd been paid - they bank refused to extend our overdraft, they would not allow me to cancel the cheques I'd written without charging me, and they would allow the cheques to be presented and then 'bounce' them and charge us. I even asked them to keep the charges - but just split them over three months so we could meet the mortgage etc. etc. They declined. The sorry episode cost us just under £1000.

I do accept banks should be able to make charges when accounts are not run in accordance to terms and conditions - but I would have liked some help when we most needed it. So I am trying to reclaim these charges. Shoot me down if you like - I doubt you can make me feel much worse than the Halifax did at the time.
FF

awhite_2

i think all of you folks who are on the banks side are all secretly jealous off all us people who have experienced a bit of hard ship,because you arent getting a share of the charges being claimed back!Good luck to all of those who are in the process of claiming,keep going and dont give up!!!:rotfl:

MABLE

awhite wrote: »

i think all of you folks who are on the banks side are all secretly jealous off all us people who have experienced a bit of hard ship,because you arent getting a share of the charges being claimed back!Good luck to all of those who are in the process of claiming,keep going and dont give up!!!:rotfl:

I'm not getting them back because like some I have never had to pay them in the first place. What is there to be jealous about.

Gorgeous_George

Miss the tax deadline and HMRC can impose a punitive charge.

Transgress the speed limit by 1mph and you can receive a punitive fine.

IIRC, many years ago, my gf was charged £12 for bouncing a standing order. The standing order was for £10. The £12 charge put her overdrawn - for which LloydsTSB charged her again leaving her almost £20 overdrawn. If they had creditted the cheque that had been put in a few days earlier, she would not have bounced the standing order. A request for some sanity from the bank fell on deaf ears and so she closed her account.

The banks' charges have been unfair and have been the sole reason that many people suffered financial hardship (apart from their financial ineptitude). No better than loan sharks IMHO and I wish all those claiming a fair settlement. That is not the return of their charges in full.



GG

HelpWhereIcan

homer_j wrote: »

Just read the judgement and from my understanding, this case was lost for one reason alone and that was the claimant did not prepare his case very well.

The claimant was asked to provide a full list of charges with dates and reasons. The claimant failed to do this so how could he argue his charges when he couldnt even prove to the court that these charges existed?

The claimants did not specify which accounts he was claiming for. How could this help - he has been very very sloppy. .

That was Mr Houghton whose approved judgement was recorded by the judge in the same 'return'.

The judge describes Mr Berwick as having prepared and argued his case very well and even as a 'model litigant.'

homer_j wrote: »

This was no victory for proving whether the charges are legal or not, it was a lesson in making sure that you know what you are claiming for and why.

Not as I read it. The judge addresses both the unfair penalties for breach of contract

the customer may make or authorise whatever requests for payment out of his account he wishes; the bank is obliged to honour these requests insofar as there are sufficient funds in the account (or within any overdraft facility it has contracted to allow the customer) and it is free to accept or decline the request in any other case. If the bank accepts the request it is entitled to debit the customer's account and (to the extent that payment causes or increases an overdraft) in due course to be repaid by the customer for what it has paid out on his behalf. If the bank declines to accept the request it is not in breach of contract to the customer for having done so and nor is the customer in breach of contract having made the request in the first place.

It follows my judgement that none of the charges complained of were imposed by reason of breach of contract on Mr Berwick's part. It follows also that the law relating to penalties and liquidated damages, which applies only to sums stipulated for payment in circumstances of breach of contract , has no application to those charges

...the position is materially different between a case such as this... and those which involve credit cards. In the operation of credit card accounts, the customer is typically under an obligation to make a minimum payment to his account each month and may also be under an express obligation to ensure that the total amount he charges to his account does not cause a limit to be exceeded. If he is in breach of either of these obligations, any charge provided for by the terms of his contract is potentially susceptible to the argument that it is a penalty

and Unfair contracts terms act 1977

neither of these sections is of relevance. They would apply, potentially, to any term of the contract between Mr Berwick and the bank made on the bank's standard terms which purported to exclude liability on the bank's part for breach of contract by it, or to impose liability on Mr Berwick to indemnify the bank for any liability incurred by the bank in negligence or breach of contract

and Section 15, Supply of Goods and Services Act 1982

His judgement on that part of the claim is best read in full, but (as I read it) basically says that the banks do not charge for all of the services that they provide and that in order to prove the charges are unfair, the amount of the charges made in these cases would have to be weighed up against the COST of providing ALL account services (including holding and securing the money) and the TOTAL CHARGES made for ALL services.

He also seems to go on to say that the act does not prevent a profit being made and therefore does not apply as the charges made by Lloyds TSB are not significantly different from those made by other banks, making the charge reasonable.

Very interesting in my opinion.

absolutebounder

Does this mean the banks will be claiming back that which has been illegally claimed off them?
This has been a weird day I found myself agreeing with spurs mut

toonfish

absolutebounder wrote: »

Does this mean the banks will be claiming back that which has been illegally claimed off them?
This has been a weird day I found myself agreeing with spurs mut

I doubt it because they have settled out of court in the main, with no admission of liability. Could be very interesting if they do though.