Fed up with bank charges

[matssundin13 10]

You should read up on it, unfair terms in contracts can't be enforced and it's ilegal to charge a penalty for going over drawn. Banks charge an admin fee, which isn't illegal and it's still up to the courts to decide whether these 'admin' fee's are hidden penalties.

 

I don't need to read up on it - I used to work for a bank.

 

And when you speak with people who are incurring £300+ a month in charges, but insist on using their debit card to buy packets of fags, or have luxuries such as Sky tv, yet moan that they don't have any money because of bank charges, I'm sorry, but there's really no sympathy.

 

Illegal to charge a penalty for going overdrawn? Can you please cite which exact Law covers this, as I've never seen a law about Overdrafts.

 

I think what you are attempting to advise is that the charge being made is disproportionate to the costs incurred to the Banks under the Unfair Terms In Consumer Contracts Regulations 1999.

 

Maybe you should read up on it first before attempting to teach me how to suck eggs.

[Cyclone 10]

Bank charges for going overdrawn or for bounced cheques are the equivalent of a charge for breach of contract, known as liquidated damages, and the courts can enforce payment. However the sum must reflect actual costs incurred and not exceed damages the bank suffered due to the breach of contract, otherwise it becomes a penalty, which is unenforceable by the courts.

 

Read more: http://www.thisismoney.co.uk/bank-charges#ixzz1Dp7b8Rt9

 

Penalty charge is not enforceable.

The supreme court ruled in favour of the banks, but the government then promised to work with the FSA and the OFT to ensure that a fair system was put in place. The bank can charge an amount to cover it's costs, it CANNOT legally charge a penalty. Which is what I was referring to. Penalty charges, if you can prove that they are such are unenforceable. For someone who worked in a bank I'd have expected you to know the right terms.

[Grandad.Malky 11]

Except that it may well be illegal to charge a penalty for mismanagement of a bank account, which is what 25 quid for a letter amounts to. The courts are yet to decide the issue though.

 

I thought it was all sorted now.

 

In November 2009, after the OFT beat the banks in the High Court and Court of Appeal, a shock technical ruling from the Supreme Court overturned this and kiboshed the OFT's hopes in the test case; soon after the OFT decided it wouldn’t continue, even based on new arguments.

 

In explaining his ruling, the Supreme Court's president Lord Phillips said that bank customers agreed to pay overdraft charges as part of the price of having a current account, so they fell outside the scope of the 1999 consumer contract regulations.

 

Banks' response

 

The British Bankers Association, which represents the banks, said it considered the decision as a "clarification of the law" rather than a "victory".

 

http://news.bbc.co.uk/1/hi/8376906.stm

Edited February 13, 2011 by Grandad.Malky

[katedave 10]

i have a small overdraft which covers all my standing orders till my money comes through but never go over my overdraft limit.

[Grandad.Malky 11]

i have a small overdraft which covers all my standing orders till my money comes through but never go over my overdraft limit.

 

That’s what sensible people do, far better to pay a couple of quid for an agreed over draught than come on here moaning about bank charges.

[Cyclone 10]

I thought it was all sorted now.

 

 

 

The OFT asked the government to change the law from what I gather.

[Grandad.Malky 11]

The OFT asked the government to change the law from what I gather.

 

But surely they cant change it retrospectively.

[matssundin13 10]

Penalty charge is not enforceable.

The supreme court ruled in favour of the banks, but the government then promised to work with the FSA and the OFT to ensure that a fair system was put in place. The bank can charge an amount to cover it's costs, it CANNOT legally charge a penalty. Which is what I was referring to. Penalty charges, if you can prove that they are such are unenforceable. For someone who worked in a bank I'd have expected you to know the right terms.

 

Ahh yes, Banking and Law, so closely tied together that all bank employees are to be able to recite every section of the law before being allowed to speak with customers.

 

If you re-read my post, I refer to the punishment as a penalty, not the charge. Nowhere in my post did I call it a penalty charge. So I think you may wish to re-address your last comment.

 

I'm still waiting for the specific law about it being illegal to charge for being overdrawn. The link you provided doesn't support your argument.

 

Can you please provide an exact breakdown in business terms for the cost to send the letter. I'm truly intrigued, as you seem to know a lot about it. Let's take Abbey (now Santander) or Halifax for example - can you please work out a cost benefit analysis and balance sheet for an example letter. Cheers.

 

FYI - you mention the charges being 'hidden' - they are not hidden charges, as every customer has access to this information via small print and they always have. They just never bother to read it.

[top4718 838]

I'm pretty sure that years ago if i tried to withdraw from a bank to pay a bill or other reason, if there was enough cash in it would not let me do it.

 

Nowadays they let you overdraw then charge you £30-40 for it.

[clownaround 10]

You can still claim charges back if they are not in proportion to your income. If you can prove that you are in hardship they can be made to pay back the money by law.

http://www.moneysavingexpert.com/reclaim/bank-charges

[Rupert_Baehr 10]

And after they've paid the money back, there's nothing to stop them from saying: "Unfortunately as we feel that you are unable to manage your account in a responsible manner we are closing it."

 

No bank is obliged to do business with you.

[Cyclone 10]

Ahh yes, Banking and Law, so closely tied together that all bank employees are to be able to recite every section of the law before being allowed to speak with customers.

 

If you re-read my post, I refer to the punishment as a penalty, not the charge. Nowhere in my post did I call it a penalty charge. So I think you may wish to re-address your last comment.

 

I'm still waiting for the specific law about it being illegal to charge for being overdrawn. The link you provided doesn't support your argument.

 

Can you please provide an exact breakdown in business terms for the cost to send the letter. I'm truly intrigued, as you seem to know a lot about it. Let's take Abbey (now Santander) or Halifax for example - can you please work out a cost benefit analysis and balance sheet for an example letter. Cheers.

 

FYI - you mention the charges being 'hidden' - they are not hidden charges, as every customer has access to this information via small print and they always have. They just never bother to read it.

 

So now you're claiming unfamiliarity with the law... Which is it, expert who I can't question, or mere employee unfamiliar with it?

The law makes penalties for breach of contract illegal, I didn't get the words quite right either, but going over drawn is included in that breach of contract.

I expect we can estimate the cost of a letter quite accurately. Given that the entire process is automated it basically comes down to the cost of the materials and postage charge, with maybe a couple of pence on top for maintaining the system.

I don't think I mentioned the word hidden once.