Charged but not guilty - you can bank on it!

Yippee, this has made my day, no my week:

http://www.timesonline.co.uk/article...088046,00.html

Lloyds TSB declined to comment .

Having a similar amount of charges, I now intend to do precisely this - I'll keep you posted.


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Thats great news! About time the consumer thought back to the high street banks.

Those bank charges are ridiculous. Well done Mr Mullen!!!!

That really is a case of knowledge is power...

[Viney]

Im sorry, i dont get it. When you sign up for a bank account, you AGREE to thier terms and conditions, including thier charges and this bloke has won an agreement to get them refunded when HE broke these terms and conditions and he didnt agree with them.

Originally Posted by Viney

Im sorry, i dont get it. When you sign up for a bank account, you AGREE to thier terms and conditions, including thier charges and this bloke has won an agreement to get them refunded when HE broke these terms and conditions and he didnt agree with them.

Its a question of whether these charges where 'unfair'.

When you sign up for a bank account, you AGREE to thier terms and conditions, including thier charges

Yes, you sign and agree to the Terms and Conditions. But the banks are going against these - they are allowed by law to make a charge to your account for breach of agreement - but this charge must be proportionate to the cost incurred. i.e. the cost of administration. They are NOT allowed to levy a punishment against your account, which is what is happening.

So they are actually breaking their own terms and conditions, not to mention being in breach of more than one Consumer Rights legislations.

[arc123]

Viney wrote:

Im sorry, i dont get it. When you sign up for a bank account, you AGREE to thier terms and conditions, including thier charges and this bloke has won an agreement to get them refunded when HE broke these terms and conditions and he didnt agree with them.

The banks are entitled to apply these charges but not at an excessive rate. Penalty charges must be calculated to reflect the losses sustained by the banks when you cause them a problem. No more. Contratual terms must be applied in a reasonable and lawful way. Banking contracts must be operated within the law.

[mattSV]

I tend to agree with Viney to a certain extent (well, I would, seeing as I work for the 5th largest banking group in the world ) - everyone knows that if you go overdrawn without making arrangements first, the bank will shaft you Having said that, there is a very good argument that the charges are designed to be punative (i.e. a 'fine') and not just to cover costs.

The UK is one of very few countries where 'normal' banking is free - in most countries, you have to pay for every item paid in to your account and every withdrawal, and are not legally allowed to go overdrawn.

[arc123]

mattSV wrote:

Having said that, there is a very good argument that the charges are designed to be punative (i.e. a 'fine') and not just to cover costs.

Bank charges are not legally enforceable. Penalty clauses in contracts in English (and Scottish) law for breach of contract aren’t legal if the penalty exceeds the actual cost of the breach of either party.

Banks know this as well - the case highlighted in the Times is not the only one of its kind. In some instances, banks are refunding fines with just a phone call, and a well-worded letter.

I have no sympathy with banks on this issue. They have used their clout and customer inertia to make huge profits - often far more than the GDP of developing countries. Yes you sign up to the bank's t&cs but you don't sign up to silly charges. General common law is that costs of these things are liquidated damages and LDs have to be a genuine pre-estinmate of the costs involved. Added to that is a statutory overlay of the Unfair Terms in Consumer Contracts Regs, which state that charges have to be reasonable.

Ed