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

BobProperty

Knight99 wrote: »

I am not a lawyer. But I was surprised to learn from his judgment, that the District Judge, could not understand the difference between an unfair charge and a genuine loss, which results in an penalty. Clearly, only a penalty clause in a contract, which states that a amount of money will be only payable, in the event of a breach[es] of a contractural term, or condition, can only be enforceable, to reflect a genuine loss as a penalty. The actual loss needs to be demonstrated mathematically, supported by testable evidence, by the Bank(s) in Court. Perhaps, the District Judge should read the following cases: Dunlop Pneumatic Tyre Co Ltd v. New Garage & Motor Co.Ltd [1915] AC 79; Finance plc v Bank q f Zambia [1996] QB 752 at 762G, and Cine Bes Filmcilik ve Yapim Click v United International Pictures [2003] EWCA Civ 1699: Kevin Berwick, should appeal, the District Judge’s decision, to expose his lack of attention, as the claim should not only turn on its facts, but also on its legal construction, even at the County Court level.

I tend to agree with the above. Plus, for whoever is going to help this man appeal the decision I refer to one comment towards the end of the judgement:
"Mr Berwick accepted that the charges made to him by this bank were very similar to the charges he would have incurred in similar circumstances with other banks.......That is not sufficient either to make the charges unreasonable for the purposes of section 15."
Two points arise. Just because other banks make similar charges does not make them lawful. That is like saying because all the loan sharks in the area break people's legs then you can get your legs broken for non-payment.
It would appear that an argument needs to be made that the charges are unreasonable as far as section 15 is concerned or that the fees are in fact penalty charges and therefore unreasonable as they overcompensate the actual loss suffered by the bank.

mollyjacks16

Knight99 wrote: »

I am not a lawyer. But I was surprised to learn from his judgment, that the District Judge, could not understand the difference between an unfair charge and a genuine loss, which results in an penalty. Clearly, only a penalty clause in a contract, which states that a amount of money will be only payable, in the event of a breach[es] of a contractural term, or condition, can only be enforceable, to reflect a genuine loss as a penalty. The actual loss needs to be demonstrated mathematically, supported by testable evidence, by the Bank(s) in Court. Perhaps, the District Judge should read the following cases: Dunlop Pneumatic Tyre Co Ltd v. New Garage & Motor Co.Ltd [1915] AC 79; Finance plc v Bank q f Zambia [1996] QB 752 at 762G, and Cine Bes Filmcilik ve Yapim Click v United International Pictures [2003] EWCA Civ 1699: Kevin Berwick, should appeal, the District Judge’s decision, to expose his lack of attention, as the claim should not only turn on its facts, but also on its legal construction, even at the County Court level.

Thanks for this its brilliant, I have seen these cases before. I could not have put it in the terms you did. Barclays have acknowledged my claim yesterday. I am a bit scared but determined

Nytehawk

There has been many comments on this thread relating to the fact that we knew what we were going into when we accepted the various bank charges. But when you break down the actual cost to the banks it is wholly disproportionate compared with similar retail products.

It is also said that Martin often preaches to us all about looking around for the best deals with all subjects relating to money. The point here is that no matter where you look and at any bank account "they all charge extortionate bank charges" and if you are a working person would you like to tell me that you can earn money without a bank account, "I don't think so". Both employers and Central Government have bee pushing everyone to get paid into banks, salaries, pensions (how many elderly folk have been pushed into opening their bank accounts as an only option for collecting hard earned pensions) and direct debits which benefit these huge companies. Stand fast and say "no" your not going to just take my money because I have slipped over the line. Make these charges fair to all. For those that blame the individual for not maintaining their accounts properly "pray it never happens to you" because you too will want the fair play that others are fighting for today.

I am not and haven't ever had to pay bank charges, but defend the right of fair play to all

Gecks

Knight99 wrote: »

I am not a lawyer. But I was surprised to learn from his judgment, that the District Judge, could not understand the difference between an unfair charge and a genuine loss, which results in an penalty. Clearly, only a penalty clause in a contract, which states that a amount of money will be only payable, in the event of a breach[es] of a contractural term, or condition, can only be enforceable, to reflect a genuine loss as a penalty. The actual loss needs to be demonstrated mathematically, supported by testable evidence, by the Bank(s) in Court.

since the claimant didn't provide Lloyds TSB's T&Cs, this law and the related cases were not relevant. see my post @ http://forums.moneysavingexpert.com/showpost.html?p=5204022&postcount=323

99point99

werdna75 wrote: »

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

Hi Werdna - a few things really annoy me about your message.

You'll find that in the real world many people dont get to 'choose' their banks. I tried HSBC and Barclays but was refused by both - my last resort was Natwest - as the issues that were important to me at the time were believe it or not, not actually bank charges - I had no idea what would happen. The issues I was focussing on as a young student were free and easily accessable cash withdrawals from any machine any time any where, if I could go back in time after accumulating so many bank charges Id would gladly do so - but once you're locked into a bank account there isnt much escape unless you're a relatively high earner and can afford to buy your way out. And can you actually provide me a list of all the banks from 6 years ago that actually DONT charge you an extortionate rate? Its a communal monopoly - in the way they force EVERYONE to pay unreasonable rates effectively renders ALL their contracts unfair.

Your 'common sense' of opening and shutting accounts willy nilly is unfortunately someone else's 'impossible dream', especially when hit by bad credit from the very same banks that screwed them over in the first place.

mistermind

BobProperty wrote: »

"Mr Berwick accepted that the charges made to him by this bank were very similar to the charges he would have incurred in similar circumstances with other banks.......That is not sufficient either to make the charges unreasonable for the purposes of section 15."

Sadly Mr Berwick did not arrive in court armed with the 2 URLs below showing Dublin banks T&C, charging £3 where NatWest charges £38.


http://www.accbank.ie/content/accbank/cms.nsf/Files/CurrentAcFeesChargesJan2006/$file/Current Ac Fees & Charges.pdf

http://www.aib.ie/servlet/ContentServer?pagename=ROIPersonalPortal/AIBContent_C/pp_article&c=AIBContent_C&cid=1136826345174&channel=P001#Credit_Card_Fees_and_Charges

Reading between the lines of his posting in CAG, it appears Lloyds bounced some of Mr Berwick's cheques for the usual charge, but also honoured 15 of his uncovered cheques for a fee of £10 each time.

In the latter case manager intervention time was involved, and the bank also took on the risk from paying out (say a £100 cheque) above and beyond the agreed unsecured overdraft limit, thereby running the risk of bad debt. This latter situation is far less straightforward than bouncing a £100 cheque for an IT cost of say £3 then charging £25(?). I believe this is the reason the judge said the claimant had failed to prove that £10 was a penalty charge arising from breach of contract, rather than a bank service fee to cover their manager time plus bad debt risk.

To make things infinitely worse, Mr Berwick tried to reclaim both the £25(?) charges and the far from straightforward 15 x £10 "fees or charges". Adding interest to the pot, he also tried to reclaim perfectly lawful interest accrued on his overdraft balance, i.e. retrospectively demanding an interest-fee overdraft.

I am no employee or associate of banks and cards, and my opposition to Shylock banks and cards is famously ferocious. But the law is a lady holding a pair of scales, blindfolded to be fair to both parties. It is up to each claimant to prepare his or her court case carefully and justly.

wok_boy

I've just skimmed through this thread, so apologies if this has already been said. I read the fool.co.uk site every day and one of the latest articles, has said that the judge based his decision without having the full terms and conditions in front of him and the judgement may have gone differently if he had those in front of him. So they're saying don't panic.

99point99

mistermind wrote: »

Reading between the lines of his posting in CAG, it appears Lloyds bounced some of Mr Berwick's cheques for the usual charge, but also honoured 15 of his uncovered cheques for a fee of £10 each time.

In the latter case manager intervention time was involved, and the bank also took on the risk from paying out (say a £100 cheque) above and beyond the agreed unsecured overdraft limit, thereby running the risk of bad debt. This latter situation is far less straightforward than bouncing a £100 cheque for an IT cost of say £3 then charging £25(?). I believe this is the reason the judge said the claimant had failed to prove that £10 was a penalty charge arising from breach of contract, rather than a bank service fee to cover their manager time plus bad debt risk.

To make things infinitely worse, Mr Berwick tried to reclaim both the £25(?) charges and the far from straightforward 15 x £10 "fees or charges". Adding interest to the pot, he also tried to reclaim perfectly lawful interest accrued on his overdraft balance, i.e. retrospectively demanding an interest-fee overdraft.
QUOTE]

I think it is VITALLY important to not only have the original list of the charges you are claiming but to categorise these ie. bounced cheque, card misuse, automated over the limit charge etc. The problem is - how do we accurately categorise 'what is a charge and what is a fee'.

Say for instance: imagine I have £50 left in my bank account - I get charged an automated fee from the previous month of £28, buy some groceries for £20, interest is charged monthly at £12 (taking my account below the limit - £28 charge), 2 direct debits come out of my account for £14 each, because there are not enough funds they bounce for £38 each. Unbeknownst - I use my card to pay for groceries totalling £3 (card misuse - £30)....the bank's dont tell me the direct debits bounced, they are presented again a week later (another £38 each), I cancel the 2 cheques (£10 each), and while I have no money left to buy food, I use a cheque to pay for goods worth £2,50 and am charged (£30 card misuse).
£224 in charges.
Actual value of 'bank service' (money spent over the limit): £5.50

Quite an expensive day. Now....what is the bank liable for in this mess?

mistermind

If the bank's T&C is inconclusive and open to debate,

If your bank ALWAYS bounces your uncovered cheques, just as cards ALWAYS punish Overlimit and Late Payment, then I suggest it may be easier to prove that the charges were DE FACTO penalties for breach of contract.

If your bank manager manually chooses, sometimes to pay (for a fee) and sometimes to bounce (for a bigger charge), then potentially a dreaded grey area arises, whether your bank has helped you out and expects some compensation for their time and risk, in other words DE FACTO a service fee in return for providing a service conferring a discernible benefit?

If you are a CAG member, for a potential solution see page 5 on http://www.consumeractiongroup.co.uk/forum/lloyds-bank/90521-lloyds-victory-birmingham-perspective.html

Alan_Cross_2

I have been guiding a friend through the bank charge process using your site and Moneyclaim.

The claim was filed in early April and was referred to the Birmingham Courts where she lives and a couple of weeks ago she got a letter saying that Judge Cooke wanted further information about the case.

The letter said that unless the information was provided by June 2nd the case would be struck out.

To my knowledge the information we provided was in line with all that requested and suggested by Moneyclaim and your site.

Unsure what information was required we telephoned Birmingham Court and Northampton Court ( where the claim was originally lodged) and they were unable to give guidance - and we were directed to numerous consumer organisations who were also unable to offer advice.

The following day the news of Mr Berwicks failed claim came through and the name of the Judge sent shock waves through my friend ( her claim is for £4975).

Having read through Judge Cooke's judgement it seems certain that if he hears the case he will dismiss it.

Although my friend has been in the UK for over 30 years English is not her first language (Spanish speaking) and she is also suffers badly from dyselexia making the understanding of bank contracts vurtually impossible.

The period of financial instability that brought about these charges (£750 in one month alone) arose during divorce proceedings and her attempts to set up a new home for her and her son while her ex husband starved her of money and support and dragged out the case for months.

She is currently £5000 in debt - almost exactly the sum of the charges that she had "taken" by Lloyds TSB - and saw this as on opportunity to finally get her life back on track.

As you can imagine she was devastated to hear that it was Judge Cooke who was due to hear her case.

I also feel a responsibility having encouraged her to pursue her claim.

Your advice on how to proceed would be greatly appreciated.

Yours sincerely

Alan Cross