A Bankers View, Open Letter To Martin Lewis And His Followers On Bank Charges.

Smasher

nickmack wrote: »

In the Unfair Terms in Consumer Contract Regulations 1999, it says, 'An unfair term in a contract concluded with a consumer by a seller or supplier shall not be binding on the consumer.'

This means a particular clause can be unenforceable, however 'The contract shall continue to bind the parties if it is capable of continuing in existence without the unfair term'

In the case of Castaneda and Others v. Clydebank Engineering and Shipbuilding Co., Ltd. (1904) 12 SLT 498 the House of Lords held that a contractual party can only recover damages for actual or liquidated losses incurred from a breach of contract as oppose to a charge which represents a penalty. This law was confirmed and upheld in Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79. A charge will be held to be a penalty if the sum stipulated for is extravagant and unconscionable in amount in comparison to the greatest loss that could conceivably be proved to have followed from the breach. A penalty clause is void in its entirety and unenforceable.

seven-day-weekend

There is never any need to be rude/angry to a 21-year-old customer services assistant who is still wet behind the ears and not in the position of making any banking policies.

But having worked in a Customer Services role (not banking) for many years, may I say the young lady had better learn sooner rather than later that her customers will be a lot politer to her if she treats them with respect too.

On the subject of bank charges, I agree that if charges are unlawful they should be reclaimed.

However the person should endeavour to not accrue any more.

I believe those two things are exactly what Martin advises.

nickmack

Smasher wrote: »

A penalty clause is void in its entirety and unenforceable.

Exactly, what Nathan said therefore follows, the entire charge could be deemed unlawful, but the rest of the contract can remain in place if the other conditions are met.

Drunkstar

Edinburghlass wrote: »

Absolutely but the OP does need to brush up on her customer skills when discussing her customers, in public, as ignorant, arrogant and piggish. I'd also point out to the OP that all of the banks do read the forum and its perhaps somewhat unwise to put as much information about yourself as you have done.

and to everyone else, please lets keep this calm and polite, no need for verbal abuse to anyone or indeed from anyone.

Agreed 100%

Tim_L

It's a shame that a lot of this has become a sort of personal attack on the OP - it takes a considerable amount of moral courage to come into a hostile environment and make a point, and even if some of the things said were ill judged it's surely better to engage on the substantive points.

What this shows to me really is how successful the banks have been in creating an impression that the charges are agreed and fair and that those challenging them are attempting to get something for nothing that will cost "decent folk" hard cash.

In fact this is complete nonsense. Banks were profitable before this idea came about, at which time current accounts were free of charge. Overdrafts were either pre agreed, in which case interest was payable, or accidentally commenced or exceeded, in which case you would get a notification and told to correct the situation. While you did, interest was charged and further transactions would be blocked.

Now THAT is a sensible method of dealing with the problem of people not managing their finances properly. Allowing, as A&L do, for example, people to make a small transaction over their agreed limit SOLEY so they can be charged fees is just simple theft. It would be equally easy for them simply to reject the transactions. Oh, and then there are the dirty tricks such as applying debits before credits, and then the BACs system which means problems take a minimum of 4 working days to fix even when spotted immediately.

So what we have are thieves pretending to be guardians of public morals by stealing from the poor. And so silvertongued have they become that great tranches of the public are believing them. If the poor dare to ask for their own money back, they are vilified as belonging to the great new compensation culture.

Most people, including those being charged, do not object to being charged fairly. I doubt there are many that would refuse to pay interest on borrowings, which is traditionally the way we pay for debt. On unauthorised overdrafts, some sort of increased interest would be fine. If a credit check was actually needed (and not on file from other applications at the same institution) then I doubt people would object to the charge. But being charged £100+ for a small 24 hour mistake is absolutely ludicrous, and the real reason it's done is that using interest and expense charging doesn't make free money for the bank.

I just hope the OFT don't roll over and bottle the court case, but their history is not impressive.

Tim_L

Phaelok wrote: »

My response.

The so-called its 'unlawful' jargon is, quite literally, absurd - How on earth can a charge be unlawful if the bank clearly states how/when it will charge you on the account? Before opening an account you need to be in agreement with the way the account should be run. If you are not happy why agree for it to be open?

Contract agreements are not complete in themselves, but subject to law - usually there's a clause stating this explicitly in the actual contract. The problem the banks have with 'penalty fees' as they were coined initially, and which the OP apparently still believes them to be, is that one party to a private agreement cannot impose a penalty over and above costs if the other party breaks the contract. Only the Courts can do this. This is why the penalties were hastily rebranded as arrangement fees. I think if the OP's bank found out she was posting saying these were deterrrents, she would be whisked away for a few well chosen words.

Anyway if there is an unlawful clause in a contract, anyone can sign it happily and just ignore it. In any case since banks all had similar penalties and people need bank accounts, there wasn't really any alternative.

The cost of bad management of money ought to be (a) inconvenience to the customer when payments are bounced, (b) the cost of the money itself in interest, and (c) the cost of reminbursment to any bank or third party that loses money as a result of any of these. Nothing more than that is required for fairness. Do you expect bad budgeters to be put in the public stocks and pelted with rotten fruit? Why is it so important they 'learn their lesson'?

Not being charged doesn't give people in marginal difficulties any more money. It just stops them having money taken from them in the first place. They are getting no unfair advantages over everyone else. There's really no reason for frustration or annoyance for anyone not being charged.

bengal-stripe

katiekittykat wrote: »

So how do you feel when you get charged £30 for being 1p over drawn?

Just as bad as I would feel, had I missed an aeroplane by being one minute late.

smitchy73

All these charges are as bad as clearing of cheques, my bank used to cash my cheques in 2 days, they then installed a 'new' system, and now it takes FIVE WORKING DAYS. At the same time when it was 2 days we got a cheque for £12k and was told when we paid it in that it would take 7 days, and when questioned and given examples in my account just the previous week, they couldn't answer, now thats f**kin daylight robbery.

If charges were fair and in proportion it wouldn't be as bad, I mean if you go overdrawn by a couple of quid a day or two before payday, most people wouldn't have any other option than wait till payday, meanwhile still getting charged another £25 or whatever each day till the funds are returned to the account, so £75 for three days for being £1 over!!

Lets hope the test case goes well, then watch their a*se's open!!!!

Tim_L

bengal-stripe wrote: »

Just as bad as I would feel, had I missed an aeroplane by being one minute late.

Well then, to extend the analogy, how would you feel had you missed an aeroplane by one minute but then discovered that the airline had constructed the check in procedure specifically so that a percentage of customers were unable to get to the gate in time? And then having missed one flight, made it progressively more difficult to get on future flights?

This is not a question of people failing to meet their responsibilities and then profiting from it - I think if you polled those affected most would not argue with a fair system of charging. It's a question of a completely disproportionate and regressive system being invented by the Banks to pocket their customers' money.

robnye

whilst i dont agree (much) with BANKER GIRL, i do think there are some people out there who live life with their heads stuck in the ground........ believing that the world owes them something....
the issue about whether bank charges isnt just a case of whether they are lawful or not, surely the biggest issue is whether they are justfied in being as high as they are...... if as Banker Girl says, that there are systems in place to help people who continually have charges raised against their bank accounts..... the banks have been very quiet about them.... how much time or how many people do they have working specifically on identifiying people who may have financial issues........ rather than trying to identify people (probably the same people) who they could entice to take out expensive loans with them......