Halifax charges -£39

jb478914

catalonia13, i believe it is really quite a simple matter. If you find bank charges too high and feel that unauthorised borrowing charges are excessive, then I suggest you make contact with some so very helpful doorstep lenders who will be happy to waive any such charges in return for a healthy APR!

as the much used saying goes, "If you don't want to do the time, don't do the crime". For example, don't borrow the banks money without asking them.

If you don't like the service UK banks provide, I would contend you move to a country such as Canada where most banks have an a/c management fee. Vote with your feet if you are unhappy!

Just trying to be constuctive, regardless of what numerous "legal eagle's" may contend is an interpretation of the law

dchurch24

The whole of this debate is centred on the, IMHO, false notion that bank charges are unenforceable if they make a profit for the bank.

The law, as is has stood since the 1915 Lord Dunedin ruling:

i) The sum is a penalty if it is greater than the greatest loss which could be suffered from the breach – in other words, if it is "extravagant and unconscionable".

ii) If it agreed that a larger sum shall be payable in default of paying a smaller sum, this is a penalty. Ford Motor Co. v. Armstrong (1915)

Penal clauses are not enforcable in British law.

I believe that point i. is clearly stating that a profit cannot be made; if a profit is being made then that makes it a penalty, and thus, unenforcable.

For Tescos to sell something at a profit is not a penalty for breach of contract - the analogy is flawed.

Extract from Abbey's T&C's:

If you overdraw your account when we have not given you an overdraft you are in breach of these Conditions

I would say that this statement is pretty unambiguous when arguing about breach of contract vs. services provided.

Also, FYI, the OFT have actually started proceedings against the top 8 credit card companies stating the Unfair Terms argument. Only 2 have not conceded.

catalonia13

jb478914 wrote:

catalonia13, i believe it is really quite a simple matter. If you find bank charges too high and feel that unauthorised borrowing charges are excessive, then I suggest you make contact with some so very helpful doorstep lenders who will be happy to waive any such charges in return for a healthy APR!

If you don't like the service UK banks provide, I would contend you move to a country such as Canada where most banks have an a/c management fee. Vote with your feet if you are unhappy!

Just trying to be constuctive......

Funnily enough, I don't find the suggestion that I use a Loan Shark or emigrate to another Country very 'constructive' at all.

dchurch24

(e.g. almost every personal banking transaction: free cheques, free cash withdrawals, free deposits, free BACS payments, free internet banking).

No offence, but it really is quite naive to believe that these services are free.

A&L's cheque clearing account has £2.5 billion in it at any one time - they keep that money for 3-5 days (at least) and get the uk libor rate overnight - 3.9% - and that includes weekends. They make a lot of money from cheques. In Sweden of course, that interest would have to be passed back to the bearer of the cheque by law.

BACS payments and payments from Internet accounts (until the recent ruling by the OFT) take 3 days, so the same story would apply there.

Banks do not do things for free. Ever. They are not there to be friendly to customers, nor provide a decent service, as is proven if you try and actually phone one. They are there to make a profit through and through and they do that quite efficiently through legal means without having to resort to underhand tactics of dubious legality.

dchurch24

dchurch24 it would be a nice gesture if you could post a 'doctored' version directly in this thread then interested persons and pro-active MSE'ers could also post to their MP - including myself

No problem, I will duly 'doctor' it and post here later today.

Funnily enough, I don't find the suggestion that I use a Loan Shark or emigrate to another Country very 'constructive' at all.

I do actually like the latter suggestion though - think of a country with decent food, reasonable fuel costs, and a fair banking system, and maybe a bit more sun where people are not always out for 'number one'. Hmmmm?

catalonia13

dchurch24 wrote:

I do actually like the latter suggestion though - think of a country with decent food, reasonable fuel costs, and a fair banking system, and maybe a bit more sun where people are not always out for 'number one'. Hmmmm?

ummm, food for thought eh!? If I had a choice it'd be Spain, though I have no idea what their banking system is like, I'd hope it'd be a case of you don't actually have to have one, now wouldn't that be nice?!

dchurch24

Dear [MP NAME],

As you may be aware, the Office of Fair Trading is currently taking
action against eight companies in respect of unfair terms in consumer
contracts relating to the penalty charges applied for late payments of credit card bills stating the 1999 Unfair Terms in Consumer Contracts egulations.

I believe, as do many others, that the charges levied by banks and
building societies for unpaid direct debits, standing order payments or unpaid cheques are closely related to the charges that the OFT is
targeting and that they are also a breach of the same regulation.
For example, if a standing order for £3 is not paid through
insufficient funds in a current account, I find it difficult to believe that a £32 fine reflects the loss to the bank.

I also believe that if a sum payable is excessive, it will become a
penalty and will be unenforceable by the courts. This has indeed been the case in the past:

Dunlop Pneumatic Tyre Co. Ltd. v. New Garage and Motor Co. Ltd. (1915)

In this case Lord Dunedin laid down the following rules:

i) The sum is a penalty if it is greater than the greatest loss which
could be suffered from the breach.

ii) If it agreed that a larger sum shall be payable in default of
paying a smaller sum, this is a penalty.

There is a more recent case where these rules were upheld:

Murray v. Leasureplay (2004)

It is my opinion and that of Richard Colbey – a barrister who
writes regularly for the Guardian newspaper – that these charges are
indeed unfair and are covered by the 1999 Unfair Terms regulations.

I respectfully ask that you write to the OFT asking them
to investigate these charges in much the same way that they are taking action against firms that impose closely related charges on credit card holders. It may also be pertinent to take up this issue with the treasury secretary. I believe that these charges hit people the hardest as they are about to enter into, or indeed already are in
serious debt. These charges contribute in no small way to Britain’s
dangerous personal debt situation.
Last year alone, the top high street banks made £3.5 billion profit
from these charges, and I believe that by publishing that fact proves
that the charges cannot have been solely for liquidated damages.
I understand that companies are driven by profit and I do not object to that. I do object to profits being made from people who are already struggling financially, and believe that banks should not be allowed to continue effectively forcing people into debt in this manner.
I recently heard of one case where a family had their house repossessed because the bank charges that were accumulating each month did not
leave enough money to pay their mortgage. The charges were taken
automatically from the account before the payment to their mortgage
company was made.
[personal stuff here about my situation]



At present and to my knowledge there are 4 such cases against the the
same bank.
There has been one case, to my knowledge where they have settled out of court, and another where they have attempted to settle.
I know of 6 other cases against other high street banks where the bank has paid up in full when faced with legal action. This suggests that the bank’s legal advisors are aware that these charges represent unfair and excessive penalties.

I hope you can see the injustice of these charges that seem to target
those most financially vulnerable, and respectfully urge you to bring
this to the attention of the OFT, the treasury and perhaps even bring
this up in parliament.

I look forward to your reply.


Yours sincerely,

dchurch24

ummm, food for thought eh!? If I had a choice it'd be Spain, though I have no idea what their banking system is like, I'd hope it'd be a case of you don't actually have to have one, now wouldn't that be nice?!

France would be my choice, even thought the fuel there is almost as bad as here.
I have a French bank account, and while it's operation is slow, it is entirely fair. i.e. no charges, etc...

fabienne_2

well i am french and what a shock when i arrived. i was used to my bank ringing me if a cheque was presented and no funds present, i will say i am paid tomorrow, and the cheque will go through with no charges, i spent 15 years with a bank account without a charge. on my first month (that before i realise that the bank will not clear the cheque for 3 days-now 5) i had to pay £560 of bank changes. my english wasn't good enough at the time to protest but i did put up a good fight, and change bank (not fashonable at the time) when my turnover was at the highest, telling them i will not return until they wave the charges.
you could not have that in French banks, they will be attacked and the whole country will be on strike(again) well you know why now.
i think i wil send flowers to my french bank manager...

grumbler

fabienne wrote:

...i think i wil send flowers to my french bank manager...

Just out of interest: was your french banking absolutely free? I.e. did you pay any annual fee or for some transactions, transfers and other regular services?