Bank Charges Test Case Article discussion

chipbeck

Marker wrote: »

Just Wondered ... Can/Should Banks Still Lay Charges Even Though It Is Still Going Through The Courts?

Can - Yes
Should - No
Will - Yes

vix2000

alexjohnson wrote: »

You could use the post too: the companies will even send a little envelope or provide a way to open the envelope at the side so you can recycle it.

No one's advocating not having a bank account. Just not an account which allows credit - so a current account. You can open a regular deposit account with a cash card that will probably be a debit card. They're marketed at school leavers. If they won't give you one then you can try a "basic" bank account (which they will be very reluctant to tell you about but which they are obliged to offer) and if that fails a savings account with a cash card. Provided it has an account number and sort code (and it will) there is nothing to stop you getting your money paid into that. As many of these will allow you to transfer out online you can probably do basic online banking and bill-payment with a lot of them.

Is a current account more convenient? Of course. But we shouldn't pretend there aren't perfectly viable alternatives, because there are.

Thanks for the info. Can you also pay things like TV license, car and house insurance and life insurance in this way? If I can pay everything without going through a bank account I'm up for it. I'm afraid a basic account doesn't eliminate charges though, as my daughter has a basic halifax account and they regularly charge her £35 for them allowing her account to go £5 overdrawn.

YorkshireBoy

vix2000 wrote: »

I'm afraid a basic account doesn't eliminate charges though...

There appear to be a couple of 'basic' bank accounts that don't charge for unpaid items, although after 3 transgressions some may close the account...

http://www.moneymadeclear.fsa.gov.uk/pdfs/bank_accounts.pdf

...my daughter has a basic halifax account and they regularly charge her £35 for them allowing her account to go £5 overdrawn.

The HSBC basic account (see the above link) has a £10 buffer zone...time to change accounts?

Why "regularly" and for only "£5" though? Surely with a little more attention to detail, these particular charges are easily avoided. Not meant to sound 'holier than thou', but a fiver isn't a lot of money is it? A packet of fags, a couple of pints, a takeaway pizza?

pkb1

Hi, last year i sent letters[ from your templates] to my banks, both banks replied [ as you said they would] saying there was nothing i could do to re claim, i sent the second letters and was still given a negative answer.......i was suffering badly financialy, as i had to give up work on medical grounds and was getting less than half my old wages in benefits.......therefore i couldnt spare the money to go to court how ever little it would have cost me!.....will i still be registered as making a claim? or will i have to start the proccess again?..................there have been times the bank has taken charges out of my dissability money....is that lawful in itself?thank you
Pauline

PhiltheBear

vix2000 wrote: »

Thanks for the info. Can you also pay things like TV license, car and house insurance and life insurance in this way? If I can pay everything without going through a bank account I'm up for it. I'm afraid a basic account doesn't eliminate charges though, as my daughter has a basic halifax account and they regularly charge her £35 for them allowing her account to go £5 overdrawn.

I've got one of those too. They don't eliminate charges, in fact it's overly expensive if you go overdrawn. The answer is to try and make sure that you never do. But you can do all the things you mention on such an account. Basically, most of these are payable by direct debit or standing order and the halifax basic account lets you set these up.

Which is fine, IF you are happy letting companies take out money directly from your account when THEY want to. Problem is, of course, that a bill that you could really do with putting off for a couple of days can be taken out by DD and push you into overdraft. And then you get hit with the charge again!

Let me be clear on this. If the bank is going to refuse to pay a DD or honour a cheque then it's reasonable for them to make a small charge to do so. As it's all computerised that basically means it'll cost them about £1 - which includes the price of sending out a letter telling you. So, if they charge you £1-£2 that's fine. But when they charge £35 AND STILL DON'T PAY then that's just about outright theft. And that's what all this is about.

*Nate*

When did the banks have until to appeal against the decision that was made ? And if it has passed, have they ?

dzug1

*Nate* wrote: »

When did the banks have until to appeal against the decision that was made ? And if it has passed, have they ?

They have appealed - see Martin's summary

Smasher

PhiltheBear wrote: »

I've got one of those too. They don't eliminate charges, in fact it's overly expensive if you go overdrawn. The answer is to try and make sure that you never do. But you can do all the things you mention on such an account. Basically, most of these are payable by direct debit or standing order and the halifax basic account lets you set these up.

Which is fine, IF you are happy letting companies take out money directly from your account when THEY want to. Problem is, of course, that a bill that you could really do with putting off for a couple of days can be taken out by DD and push you into overdraft. And then you get hit with the charge again!

A good solution could be for people prone to these charges to pay bills by the good old fashioned method of going into a post office, bank or the service providers local branch & paying it manually. The problem with this is, many either charge extra for this or don't do it at all.
In Ireland, I believe that there is legislation that the costs of all payment methods must be part of the price, therefore the price is the same no matter how you choose pay. This is not the case in UK as recently demonstrated when a woman tried to sue BT for charging £4.50 extra to pay by means other than direct debit.
In this case, the consumer gets screwed either way. I have always wondered how long now before utility companies begin to introduce new services, for example, for providing continued service in the event of late payment. Penalties could be perfectly legal now if all you got to do is give em a different name..
http://www.bbc.co.uk/consumer/tv_and_radio/watchdog/reports/services/services_20070314.shtml

Nathan_Spleen

Just to clarify, the statement below suggests the bank's appeal will be heard before the July CMC. This is very unlikely.

Also, 4 banks applied for leave to appeal against the PIL judgment and the judge refused.





STOP PRESS! Thur 22 May 08. Banks to appeal test case decision
After day one of the Case Management hearing in the bank charges test case the situation seems to be as follows (some clarifications are expected on day two).

• The Banks are appealing the ‘fairness rules’ decision. The High Court has agreed to allow the Banks to appeal the decision which said Bank Charges are subject to fairness rules. There aren’t full details, yet it's likely to be a Court of Appeal case and should be heard before July ’08. However, there could be further appeals to the House of Lords after that.
  
  As well as the main fairness ruling against the banks, the judgement ruled in their favour on two smaller points – that bank charges aren’t penalties, and that most of the terms were clear. The OFT has decided not to appeal the first, and is considering appealing the second. It does however want to pursue banks historic terms and conditions, to see if any previous terms can be classed as a penalty. This will need to be carried out on a per bank basis, except for possibly Nationwide which is being assessed separately.
• The OFT will continue to look at whether charges are fair. As the court ruling said bank charges are subject to fairness rules, the next stage of the test case will be for the OFT to decide if charges are unfair, and it'll carry on doing this regardless of the appeal. It has stated it is not yet ready to make a decision on this due to the scale of the task involved, yet the judge asked for further clarification in July.
• Next key date 7 July 08. The case management process will continue in July to consider whether previous contracts can be classed as penalties and how the OFT intends to progress if the original judgement, that terms can be considered as unfair, continues to stand.

PhiltheBear

Smasher wrote: »

A good solution could be for people prone to these charges to pay bills by the good old fashioned method of going into a post office, bank or the service providers local branch & paying it manually. The problem with this is, many either charge extra for this or don't do it at all.

Yes, so if you can't get a bank account you are penalised by these companies as well - no matter how good a payer you are. Where I live it's 2 miles to the nearest Post Office or bank. OK for me - but not good if you are a pensioner. Add the extra charges and it's punitive. £4.50 extra to pay your Gas Bill? When it costs the Gas company nothing - zero - nought? We do need laws to protect people about stuff like this because it's sheer greed on the part of the companies involved.

Of course it suits them to collect by direct debit but why should it be possible for the legal system to allow them to punish people who don't want to fit in with their convenience? Let's be quite clear - they want direct debits so that they can collect your payments early. That extra money, on deposit with them, earns them large amounts of interest. It's just greed all over again.