First reports of someone losing in Court on bank charges Blog Discussion

werdna75

I'm confused.

This site is about money saving and we're not talking about everyone moving their accounts away from banks that charge silly money for their overdrafts? Why?

We as account holders agreed to these charges when we set up the account. Ok, so they've gone up over the years but so has the cost of gas. If we thought these charges were unfair, unlawful etc. why did we agree to them in the first place? I carefully chose my account as it had the lowest charges!

My concern is that me, as a person who manages my overdraft carefully, keeps within my budget and chose my account wisely, is going to have to pay for people who agreed to something and now want to back out because it's cost them something!:mad:

It's common sense that if you agreed to pay £20 each time you go over your agreed overdraft limit you pay it. If you went to the paper shop and said "I know I agreed to pay £5 for the week's papers but now I think that's unfair" you'd be laughed out of the shop!

Ok, I agree that some banks charge way more than it actually costs to do the transaction but you agreed to pay that when you chose their account!

The way to sort this out is to move to a bank/building society that charges less, force the banks to compete on the level of the charges!

I've incurred charges twice in the last 6 years and I've no intention of reclaiming them because I agreed to pay the bank this when I took out the account!!

Let them try and charge me for something I didn't agree to, like Egg did last year when they charged me full interest on the balance transfer fee on my EggCard, even though their terms and conditions made it clear that it would be paid off first, then I'll complain and reclaim it (all £2.50 of it!!). I'll even write to the Chief Exec and complain and bother their customer services for weeks on end until they do something about their mischarging!

Come on guys, some common sense. We were daft enough to agree to these charges, we didn't have to! As Martin always tell us, shop around for the best deal! I did!

Werdna

fegan2401

werdna, i
In reading your post i must agree with a couple of your statements but come on can we realistically shop around and decide who we bank with. For some people on low incomes it's hard enough opening up a bank account. Plus can you tell me the cheapest and dearest bank in relation to charges? I thought they were all roughly the same.

My case being i went on holiday in January and my work never put my pay into the bank as usual, there was a mix up and they sent me a cheque instead. By the time i got back and put the cheque in i had about £300 in charges. I did not sign up for that. They know you have to bank somewhere so they collectively shaft you. Surely you can see that.

agnes_2

I am surprised that this happened the way it has, the judge is saying that the charges are for part of the price of the services provided?? this function does not yet exist does it? if you are in overdaft you pay interest, when you exceed that the charge is a penalty, because instead of refusing the payment as they used to in the past they now let items go through because it has become more lucrative to charge an extravagant penalty?? How can the judge rule in favour of the bank when they didn't show up? surely they would be asked to prove their cost of these penalties? and would be required to be cross examined ?

mistermind

jillb,
exactly what charges are you reclaiming.
I think the lost case suffered from a woolyness on what was claimed, including a huge wad of interest with no attempt at separating interest accruing on unlawful charges from lawful interest accruing from overdraft.

Reading between the lines on CAG, I infer that the claimant went over his agreed O/D limit. Instead of bouncing his cheques and levying a penalty charge, Lloyds allowed the O/D to grow without revising the agreement, and charged a fee for this favour.

Whenever I agreed an o/d from Lloyds, they charge a Facility Fee upfront. As much as £100 for £1000 o/d. This was not a penalty charge as I breached no agreement. I agreed to this fee in writing as I needed the o/d, entering into a commercial deal willingly, at disadvantageous terms. This latter characterisation is a matter of opinion, the bank could also say they were taking a gamble, on whether this unsecured o/d was going to be repaid at all.

I would not dream of reclaiming such a £100 facility fee, nor any facility fee where I exceed the limit then they honour the excess, for a fee, not a penalty. Still less would I even dream of reclaiming interest from o/d as opposed to interest from exhorbitant penalty charges for bouncing cheques.

Looks to me this lost case was badly prepared.

VeniceQueen_3

Agnes wrote: »

I am surprised that this happened the way it has, the judge is saying that the charges are for part of the price of the services provided?? this function does not yet exist does it? if you are in overdaft you pay interest, when you exceed that the charge is a penalty, because instead of refusing the payment as they used to in the past they now let items go through because it has become more lucrative to charge an extravagant penalty?? How can the judge rule in favour of the bank when they didn't show up? surely they would be asked to prove their cost of these penalties? and would be required to be cross examined ?

Exactly. If Lloyds had been asked to prove their 'service charge' the court would have seen that this 'service' is carried out by an automated computer when your account flags up as being over the agreed overdraft figure. Its not as if it costs them £25 to change a number in a box. Computers do all the work for them and yet we still have to pay.

In response to the above yes, we in theory have signed up to the charges but we were not provided with the information that they are in fact unlawful. Besides, when people sign up for these things it's not as if they ever think they will get into money trouble. It just happens to some people because they struggle and then the banks make a profit out of it. If banks have such an issue about us drawing out money when it isn't really there, they shouldn't allow it.

(I'm new by the way, hello to all )

krisskross

VeniceQueen wrote: »

Exactly. If Lloyds had been asked to prove their 'service charge' the court would have seen that this 'service' is carried out by an automated computer when your account flags up as being over the agreed overdraft figure. Its not as if it costs them £25 to change a number in a box. Computers do all the work for them and yet we still have to pay.

In response to the above yes, we in theory have signed up to the charges but we were not provided with the information that they are in fact unlawful. Besides, when people sign up for these things it's not as if they ever think they will get into money trouble. It just happens to some people because they struggle and then the banks make a profit out of it. If banks have such an issue about us drawing out money when it isn't really there, they shouldn't allow it.

(I'm new by the way, hello to all )

Just a small point. How do the banks pay for the computers, the software,the ATMs etc? Do you think it just all appears in the branches at no cost? And no maintenance required either. Personally I don't think the banks will start charging for having an account, I think they will charge for using an ATM.

So the banks shouldn't allow you to draw money out that isn't in your account? Why shouldn't you be disciplined enough to stop spending money you don't have?

Leaf

Tom Brennan seems to have taken an interest.

I reckon a few will jump on this.

Like many others I know I have built up a bit of a case. While going through the process I have seen chinks in the banks armour I would like to explore. Sadly, like so many others, this is not my 'life build' and the impact has knocked me to the side in the battle. But *I* choose to continue.

Jill. It was never money you had as you accepted the loss at the time. You are making a stand and win or lose, you have fought a fight. While I want to say 'fight the fight' I want you to be less stressed. Weigh up what the cost is to continue and your well being. Does reclaiming make a HUGE impact? Does the justice of it make you feel better? How do you feel about the morality of it? Is the process making you ill?
These are questions you need to answer. And the decision is yours.
Todays judgement made many of us feel like deflated balloons. But how has that actully changed things?
A county court judgment. No precedent.

I know. We are thinking.... that let's the Courts, heavily inumdated with claims, off the hook.

The Banks have yet to answer!"

We can all read the Judgement tomorrow.
Yeah, makes complicated reading
However, seems the crux is that here is a *minor* misinterpertation on several counts. *Assumption* equates to law? Judgement appears to be based on assumption.
If judgement can be made on assumption when relying on written representation, when no answerable representionion can be verified how can assumption be reliable?

Like I know what I'm taking about ;-)


Leaf

VeniceQueen_3

krisskross wrote: »

Just a small point. How do the banks pay for the computers, the software,the ATMs etc? Do you think it just all appears in the branches at no cost? And no maintenance required either.

Of course the computers need paying for - I see your point, but at £25 a pop? It's a gross overcharge.

krisskross wrote: »

So the banks shouldn't allow you to draw money out that isn't in your account? Why shouldn't you be disciplined enough to stop spending money you don't have?

Maybe everyone could be more careful, myself included. But again the argument is that banks are making millions of profit and ripping people off. A charge is reasonable of course if it costs them money but not one that is over 5 times the cost. It's daylight robbery and I don't know how some of these people sleep at night.

agnes_2

The banks depend on people spending money which they don't have with agreed overdrafts and the interest they make, as with loans, but the problem is that whereas in the past when you went beyond your agreed limit they bounced your cheque charging you a small fee, today they have discovered a far more lucrative practice of allowing any amount of items to go through with these excessive charges.

LondonDiva

I just really hope it will give people pause before they carry on spending.

As it is, much of the comments on the threads & in response to MArtin's opus on this seems to be that the bank have an obligation to lend us money to pay our gas bills when we've spent the money on a holiday or new tv. We have a right to spend and be fiscally irresponsible without consequences or thought.

Banks are not charities and taking money you know you don't have is wrong, or as my mohter taught me - stealing.

If Martin had run a concurrent campaign encouraging banks not to honour dds or standing orders with no funds, there would have been some sense.

Instead, it's spend, spend all you want & then claim back the money because the bank was not sympathetic or understanding.

Bottom line, their money, their business (not charity) their rules. Don't want to play? borrow money from a money lender or from a friend's purse without asking and see how they feel about it.