Unfair bank charges

[Steveo]

I went over my overdraft limit in 2005, and got charged by the credit card company who couldn't withdraw funds. I'm not going to ask for those back, I knew they'd charge me, it was my fault.

Simple fact of the matter is, you may say money is tedious, but get a fucking grip and come live in the real world. You're going to have to learn to manage it in some form, so grow up and stop shirking your responsibilities.

People who claim these charges back will get their due when the bank turns round and demands the overdraft and all other debts be paid off within a certain time, because they're closing your account, which they provide for free, and kicking you out.

People see a bank as a public service, which should be free - well, sadly it's not, and it won't be long before they start charging for the account again thanks to all the scroungers out there who can't accept responsibility for the mismanagement of their own finances.

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Set your goals way too high so I can laugh when you fail.

[bdw]

I would imagine that banks will continue to generate more income by charging interest on unauthorised debt than by the charging of processing costs therefor - I do not believe that exercise of the former right is threatened here (unless they stray into usury territory, presumably).

I understood the topic here to be that of fees charged by the bank for the administration costs of the unauthorised debt (notices to customer etc). To the extent that there are clauses in the service agreement providing for contractual penalties to cover this processing expense, they must not, on breach, require the consumer to pay the bank a disproportionately high sum in compensation. This position is taken both at common law and by statute.

To be of more help:
http://www.yourunion.net/content/index.php?page=4424

[munchingfoo]

When this whole thing came to the public eye I thought that it was the right thing to do; to get backs to reduce or remove their charges.

Now I come to see it in a different light.

The resolve that banks have to start charging for current accoutns (as much as £150 a year) begun shortly after this "bank charges" news came about.

I have never been charged by my bank for an overdrawmn account or bad DD. So although I was against the charges before I see that it is ultimately going to leave me out of pocket.

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Tired Freudian references aside - your mother played my mighty skin flute like a surf crowned sea nymph trying to rouse Poseidon from his watery slumber!

[thebrookster]

Is it right, however, that if person X goes over their limit by say 80 pence due to a momentary oversight (which could happen to anyone, however vigilant), that the bankl may turn around and inform you that they are going to apply an instant anauthorised overdraft fee of £20, and than charge the monthly fee of £30 because you happened to have bben overdrawn within that month. That means, for the accidental breach of limit of 80 pence, you have been slapped with a fee of £50. (This happened to a friend of mine). From what I can see, the main arguement here is against unfair bank charges, not against bank charges in general. If I remember the law correctly, a bank may only charge you an amount proportional to the cause.

The other problem that I have with bank charges is that fact it is possible to still end out of pocket. Say my account goes overdrawn by a few pence, because a cheque is slightly late in clearing, or a direct debit is taken out early. It may be that the situation is rectified almost instantly, i.e I pay the few pence the same day. However, the bank will still charge me for this, making my account go back into the red, and liable for even more fees. This, IMO, is the fault of the bank, not the account holder. If the bank had sent out a letter, stating that the charge will taken out of the account in X number of days, the account holder would have the opportunity to ensure that there is enough money in the account to allow the payment to clear, ensuring that the bank gets its money with causing further problems.

I am all in favour of fair charging, which is slowly coming about. For instance, my bank HSBC has changed its illegal overdraft conditions. If your account becomes overdrawn, no charge will be applied if the account is brought back within its limit within 5 working days. HSBC will however still charge you for the interest on that amount. This allows fair charging, and also allows for any accidental oversights.

[ShinyHappyPerson]

Quoting Steveo from 13:12, 20th Feb 2007
I went over my overdraft limit in 2005, and got charged by the credit card company who couldn't withdraw funds. I'm not going to ask for those back, I knew they'd charge me, it was my fault.

Simple fact of the matter is, you may say money is tedious, but get a fucking grip and come live in the real world. You're going to have to learn to manage it in some form, so grow up and stop shirking your responsibilities.

People who claim these charges back will get their due when the bank turns round and demands the overdraft and all other debts be paid off within a certain time, because they're closing your account, which they provide for free, and kicking you out.

People see a bank as a public service, which should be free - well, sadly it's not, and it won't be long before they start charging for the account again thanks to all the scroungers out there who can't accept responsibility for the mismanagement of their own finances.

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Set your goals way too high so I can laugh when you fail.

Is that why, to the best of my knowledge, the banks have NEVER won a single case of this nature, and often don't even bother turning up when the case is taken to court.
Surely you can't disagree that it is unacceptable for a bank to make charges which it cannot justify, well beyond what the actual cost for the bank is for going beyond an authorised overdraft limit.

It's not an issue over whether it is fair or not to charge, but whether the charges are proportional, transparent and legal.

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"its the best thing since instant mashed potato"

[Captain_Spanky]

Well they DO make it clearly known you'll be charged over the limit, and frankly you're here at university to learn a little responsibility over your money. If they didn't charge people would go over their limits willy nilly and there'd be no point having the limit there in the first place.

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Beatrice - Darling. Dearest. Dead.

[ShinyHappyPerson]

Quoting Captain_Spanky from 22:30, 20th Feb 2007
Well they DO make it clearly known you'll be charged over the limit, and frankly you're here at university to learn a little responsibility over your money. If they didn't charge people would go over their limits willy nilly and there'd be no point having the limit there in the first place.

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Beatrice - Darling. Dearest. Dead.

Noone is contesting whether they have right to make charges. As I said before...

It's not an issue over whether it is fair or not to charge, but whether the charges are proportional, transparent and legal

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"its the best thing since instant mashed potato"

[Steveo]

My banks charges were very transparent.

I knew it was £30 if I strayed over that absolute limit. That's as transparent as it needs be, very.

People treat the end of their overdraft as the 0 point of their account. It's pathetic.

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Set your goals way too high so I can laugh when you fail.

[Humphrey]

I have a bit of inside knowledge on this one and I can tell you that all the major banks will start charging for their accounts within the next 1-5 years. This is why, if you visit your branch, they will always try to upsell you to a pay-for account.

Free banking is a thing of the past.

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http://www.livejournal.com/users/humphrey_clarke/

[ShinyHappyPerson]

Quoting Steveo from 03:11, 21st Feb 2007
My banks charges were very transparent.

I knew it was £30 if I strayed over that absolute limit. That's as transparent as it needs be, very.

People treat the end of their overdraft as the 0 point of their account. It's pathetic.

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Set your goals way too high so I can laugh when you fail.

Well. if you are prepared to pay a punitive charge on your account, which the bank can in no way justify, and which is illegal by the Banking Code without even so much as a complaint then you deserve to be charged it.

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"its the best thing since instant mashed potato"

[oddly familiar]

Quoting Steveo from 13:12, 20th Feb 2007

People who claim these charges back will get their due when the bank turns round and demands the overdraft and all other debts be paid off within a certain time, because they're closing your account, which they provide for free, and kicking you out.

Its also illegal for them to close your account just because you have caught them in making illegal charges. If they did, you could sue the hell out of them.

I think you're missing the point here steveo: That point being that no, there's nothing wrong with the banks charging people for going over the overdraft limit, but that the amount they take is illegal. They are stealing money from you because they have realised that they can get away with it. It's as simple as that. What they are doing is against the law, and if you think they're justified in breaking the law just because they hold onto your money for you then you do deserve to have it all stolen.
If you say that you're perfectly happy to have people illegally steal money straight out of your account, do you think you could post your bank details here on the forum so that we can all have a bit?

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saru mo ki kara ochiru

[romantic]

Quoting oddly familiar from 12:07, 21st Feb 2007
If you say that you're perfectly happy to have people illegally steal money straight out of your account, do you think you could post your bank details here on the forum so that we can all have a bit?

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I'm sure that if people had taken money illegally from his account he would make every effort to ensure that his money was rightfully returned. However, he simply made the point that he knew before had that if he went over the overdraft limit then he would be fined, and that in such an event he therefore would accept the charge. I agree with him completely.

[oddly familiar]

Quoting romantic from 12:15, 21st Feb 2007
I'm sure that if people had taken money illegally from his account he would make every effort to ensure that his money was rightfully returned. However, he simply made the point that he knew before had that if he went over the overdraft limit then he would be fined, and that in such an event he therefore would accept the charge. I agree with him completely.

That, in a word, is just stupid. So what if they told him beforehand that they were going to take it? The fact is, they had no right to take as much as they did. Some, yes, but not as much as they did.

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saru mo ki kara ochiru

[Steveo]

Quoting shinyhappyperson from 11:44, 21st Feb 2007
Well. if you are prepared to pay a punitive charge on your account, which the bank can in no way justify, and which is illegal by the Banking Code without even so much as a complaint then you deserve to be charged it.

You know why I deserved to be charged it? Because I was irresponsible, but you know what, it taught me a lesson in fiscal responsibility, a lesson a lot of people need to learn.

It's just another shoddy excuse not to take responsibility.

I keep, after I was charged, a healthy barrier between where I am and the end of my funds, just incase a bill comes out that I'm not prepared for or somesuch withdrawl. If there isn't that gap, then you shouldn't have bills coming out, because you can't afford them.

The charges are high, yes, but I'd argue they need to be to teach people a lesson in financial planning. Money doesn't grow on trees, and an overdraft is the banks money, not yours.

Sit up, grow up and start acting like responsible adults, rather than petulent children who can't manage their own money.

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Set your goals way too high so I can laugh when you fail.

[Steveo]

Quoting shinyhappyperson from 11:44, 21st Feb 2007
Well. if you are prepared to pay a punitive charge on your account, which the bank can in no way justify, and which is illegal by the Banking Code without even so much as a complaint then you deserve to be charged it.

You know why I deserved to be charged it? Because I was irresponsible, but you know what, it taught me a lesson in fiscal responsibility, a lesson a lot of people need to learn.

It's just another shoddy excuse not to take responsibility.

I keep, after I was charged, a healthy barrier between where I am and the end of my funds, just incase a bill comes out that I'm not prepared for or somesuch withdrawl. If there isn't that gap, then you shouldn't have bills coming out, because you can't afford them.

The charges are high, yes, but I'd argue they need to be to teach people a lesson in financial planning. Money doesn't grow on trees, and an overdraft is the banks money, not yours.

Sit up, grow up and start acting like responsible adults, rather than petulent children who can't manage their own money.

[hr]

Set your goals way too high so I can laugh when you fail.

[mcg23]

for those who hate keeping track of money and what not...just set up your online bank account. Then once a week or something, just check your account when you check your email. No math involved!
I tend to check my bank account online because my parents had an identity theft issue and lost $2500 dollars form savings and didn't find out until much later because they rarely checked their balance. now i'm paranoid! but yeah, that online banking is really helpful for those who don't want to sit there and balance checkbooks.

[ShinyHappyPerson]

Quoting Steveo from 12:28, 21st Feb 2007

I keep, after I was charged, a healthy barrier between where I am and the end of my funds, just incase a bill comes out that I'm not prepared for or somesuch withdrawl. If there isn't that gap, then you shouldn't have bills coming out, because you can't afford them.

The charges are high, yes, but I'd argue they need to be to teach people a lesson in financial planning. Money doesn't grow on trees, and an overdraft is the banks money, not yours.

Sit up, grow up and start acting like responsible adults, rather than petulent children who can't manage their own money.

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Set your goals way too high so I can laugh when you fail.

I don't think ANYONE on this thread is advocating an entire ban on charges for unauthorised overdraft breaches. Certainly not me. It does cost the bank money, and that money should be recovered. It's relatively easy to ask for an overdraft extention if you think you're going to be caught short one month. Nor do I deny that people have their own responsibility to manage their finances appropriately, and if the law reflected that then it would be fine.
But it doesn't. The Law is the Law is the Law, and you can't go cherry picking the ones you'd like to ignore, just because it fits with your world view. Infact if you feel so strongly about it, why don't you start an e-petition...

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"its the best thing since instant mashed potato"

[Gubbins]

Quoting Steveo from 12:28, 21st Feb 2007
The charges are high, yes, but I'd argue they need to be to teach people a lesson in financial planning. Money doesn't grow on trees, and an overdraft is the banks money, not yours.

Regardless of the size of the charges, that is not the argument. The argument is that the law currently states that the charges made are not legal. Perhaps the law could or should be changed to enforce a lesson in balancing one's income with expenditure, but that is not the issue. If you let the banks circumvent this law, then what is to stop them charging truly unfair quantities: £50 for paying in a cheque perhaps, or £100 for setting up a standing order? These laws exist for a reason - if you don't like them, use your voice to change them.

As an aside, I find the phrase "money doesn't grow on trees" to be mildly ironic, since (before the introduction of cotton/linen) money was predominantly made from them.

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...but then again, that is only my opinion.

[Kenny MacDonald]

Hey just thought I'd mention to you I successfully sued The Governor and Company of the Bank of Scotland for bank charges last summer at Cupar Sheriff Court.

The banks may purport that they are entitled to charge the current amounts by virtue of the 'Terms and Conditions' which bind both parties with regard to your account. However, common law and current statutory provisions take precedence over any 'Terms and Conditions' applicable to the account.

When you go over your limit, bounce a direct debit etc what you are in effect doing is breaching (albeit minorly) your contract with the Bank. Under Scots law the Bank is only entitled to recover real, actual or liquidated costs as a result of your breach. The relevant authority on this in Scotland is Clydebank Engineering and Shipbuilding Co v Don Jose. Ramos Yzquierdo y Castaneda [1905] AC 6

There are also statutory provisions contained within the Unfair Terms of Consumer Contract Regulations 1999 applicable to the subject matter. Paragraph 1(e) of Schedule 2 states that a term may be regarded as unfair if they have the object or effect of "requiring any consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation".

It is difficult to envisage the Bank incurring any losses beyond that of the computer generated letter they send when you breach your limit. To that extent, I argued the Bank was at minimum, fairly and amply compensated for the breach by the interest applied on the overdraft at the unauthorised rate.

On the above basis, I sued my Bank for the recovery of £160 in charges, together with a further award of £160 for distress and inconvenience and expenses at Cupar Sheriff Court.

The Bank settled the claim in full upon receiving the summons.

Disclaimer: I'm not a lawyer!

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SRC Member for University Accommodation


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[Rilla]

Quoting Kenny MacDonald from 17:40, 21st Feb 2007

On the above basis, I sued my Bank for the recovery of £160 in charges, together with a further award of £160 for distress and inconvenience and expenses at Cupar Sheriff Court.

The Bank settled the claim in full upon receiving the summons.

Disclaimer: I'm not a lawyer!

Don't forget the mental anguish, Kenny!

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Be good to yourself because nobody else has the power to make you happy.