Times article: "Student wins claim over bank charges"

dchurch24

I agree totally. That is exactly what happened to me. I am now 1400 o/drawn thanks to Abbey charges.
The first time the account went overdrawn it was not my fault (employer didn't pay correct wages) and my account, thanks to the charges that were then applied never recovered.
When British consumers are a combined total of 1 trillion in debt, I think it is wholey irresponsible of banks (who can and do make and break economies) to force people into further debt.

pin

While I think some charges by banks are very high people should remember that an overdraft is not yours as a right. An overdraft is an on demand debt. A bank could very well legally turn round to you today and say I want my money back now. You would have to repay them straight away.

dchurch24

Quite right. They would be legally within their rights to do that.

What they are not legally allowed to do, and what I am calling into question, is to take disproportionate & punative charges from people.

It is, in my opinion (and the opinion of the law as far as I can find), "obtaining money by deception".
They state that the charges are reimbursment for costs incurred through admin, when the reality is that these are punative charges. Thus, a deception has occured.

Banks are not above the law, yet they think they are, and that is my particular beef with them.

Yes, accounts should be managed properly. Although, I never wanted to be an accountant or a bank manager/clerk. As we no longer have the choice how we get paid our well earned wages (not since 1985, thanks Maggie), if I don't have enough money in my account to pay something, then the bank shouldn't pay it. End of story. My problem. Not anyone elses. It is a matter between me and whoever it was that didn't get paid.
Why should the bank have anything to do with it at all?
These charges would also be applied to an account with no o/d facility, if a dd was due to come out of an account with insufficient funds.
Surely a fairer way would be to charge for a service that you can opt out of, in which you get notified if and when a payment (of any method) had failed.

Some firms, mainly insurance companies and banks, will not accept payment in any other form than electronic these days, meaning that I cannot just draw my money straight out of my account and deal just in cash.
Also, most banks only allow a 300 quid per day withdrawal without arranging with the bank first. I even had Abbey ignore my request once and ended up having to buy a house on my debit card - for which I was charged over 400 quid.

A free and fair banking system for all?

Not in Britain.

deijath

I agree with the fact that the charges that banks charge for unauthorised overdrafts, failed Direct Dabeits, failed standing orders, and late payment fees penalties are disproportionate to the cost incurred by themselves. What I never can understand (and I think it's unfair) is the following scenario:
I have £3.50 in my current acount, and I buy something for £4.00. The bank authorises this (I believe that various checks are made when your account reaches a ceratin level - but this is pure speculation). They then charge me £28 for an unauthorised overdraft, plus interest on the 50p. Who authorised this overdraft - they did. Aren't they in breach of contract, which I believe looking on the internet, is one reason why they impose these penalty charges in the first instance?

digp

pin wrote:

http://www.timesonline.co.uk/article/0,,2-1672922,00.html

A spokesman for Abbey said that it had been unable to defend the case because it had not been notified of the court date.

That's a pile of sh*t if ever i heard any.

digp

davidcampbell wrote:

well thats just my opinion, if as stated this is illegal them im obviously wrong.
DC

No bank will defend such an action or seek to have it reinstated (and it is rather unlikely the courts will overturn default judgment) as a positive judgment against them is potentially more damaging than a judgment in default which they can simply attribute to non-service or some other equally "plausible" excuse.

digp

http://www.timesonline.co.uk/article/0,,2-1672922,00.html

Consumer groups welcome a groundbreaking victory that could lead to cheaper fees

A LAW student is expected to be awarded hundreds of pounds in compensation against his bank after claiming that the £32 that it charged him every time he went overdrawn was unfair.

Courts do not award "compensation". They award damages. World of difference there.

Consumer groups and banking watchdogs yesterday welcomed the victory and said that it could open the way for thousands of similar claims and could help to bring about changes in costs to bank customers. Stephen Hone, 29, brought the civil court action against the Abbey bank, on the grounds that the penalty was “disproportionate” to the costs incurred by the bank.

He claims that the charges are in breach of the Unfair Terms of the Consumer Contracts Regulations 1999, which state that a consumer should not pay a disproportionately high amount of compensation if he or she fails to meet an obligation.

Which they are. They are also in breach of EC law and English common law.

In his claim, entered at Plymouth County Court in Devon, Mr Hone said that he had been charged a total of £2,000 over six years.

He wrote: “Your charges do not reflect any actual or real loss; instead, they appear to represent a lucrative profit-making scheme.”

Hardly elegant pleading ... but it did the job

Although Mr Hone filed the claim last month, Abbey failed to submit a defence and the student won by default. District Judge Andrew Moon said that he had no option but to find in Mr Hone’s favour. He said: “The defendant must pay the claimant an amount which the court will decide, and costs.”

Is that what the judge said or what the paper says he said? The Civil Procedure Rules stipulate that failure to serve a defence permits the claimant to seek judgment in default. The Abbey is not above the law, despite their apparent inclination to so think (from their conduct)

.....

A spokesman for Abbey said that it had been unable to defend the case because it had not been notified of the court date. “The banking charges which Abbey levies are legitimate and proportionate to the administrative costs incurred by the bank for situations such as direct debits,” he said.

Why don't they apply to set aside judgment?

davidcampbell

digp, i couldnt give a toss frankly what your view on this topic is, but i do object to a comment made which is nothing but abuse.

kindly retract it

DC

M_Thomson

I am not wanting to argue about wether the charges are propotionate or not, but I will say this. When you sign up to open an account with a bank you get a set of terms an conditions which list charges amongst other things. People moan when they are applied well there is a simple solution! Keep your account in credit. Don't spend what you have not got!! The guy who took Abbey to court should have lost by default as he was the one that was responsible for the charges. I can understand him maybe having a couple of charges but £2000 worth! Please! He did not really deserve one penny back if he cannot run his account properly.

I understand that people sometimes have major problems that mean that they get behind on bills such as a loss of a loved one, loss of job etc. These are the people that should be given help by the banks. But everyone else who does not have these things happen to them take responsibility!! It is your responsibility to check your balance. This country is going down the pan because of the blame culture that people use for everything.

David Campbell, I have reported digp's post. I totally agree that there is no need for language like that.

M_Thomson

deijath wrote:

I agree with the fact that the charges that banks charge for unauthorised overdrafts, failed Direct Dabeits, failed standing orders, and late payment fees penalties are disproportionate to the cost incurred by themselves. What I never can understand (and I think it's unfair) is the following scenario:
I have £3.50 in my current acount, and I buy something for £4.00. The bank authorises this (I believe that various checks are made when your account reaches a ceratin level - but this is pure speculation). They then charge me £28 for an unauthorised overdraft, plus interest on the 50p. Who authorised this overdraft - they did. Aren't they in breach of contract, which I believe looking on the internet, is one reason why they impose these penalty charges in the first instance?

Again, you would be responsible for checking the balance of your bank account to make sure that you have enough money in your account. Every account wether with or without an overdraft has a shadow limit of which the bank will pay a transaction. I am sure you would be the first to moan if the bank declined it! If you don't like paying £28 then check your account before doing a transaction!