Bank Charges

Ooops, sorry cheif. I just got a bit carried away after reading some of the other very helpful but obviously irrelevant posts on the thread.

[arc123]

e.d wrote:

Don't get your knichers in a twist.

my knichers are not twisted thanks (whatever you are talking about)

I have no idea about the legality of what they do or how they charge.

agreed.

which is surely a simpler way to go about things than spending money thats not mine getting charged for it and then having to fight to get it back.

Agreed.

How is all this relevant to my posts and the original question?

sharriso74 wrote:

Any legal eagles here can say whether this is would work?

I am no leagle eagle, but simply answered sharriso74 question, and explained the situation. Best practice for how to run your finances are not what he asked for.

There are two issues here.

1) Can the bank morally punish you for using their money without permission (i.e. going overdrawn) - I think that is OK, so long as they tell you (via their standard terms and conditions) what you will be charged for and by how much

2) Can the bank legally take a charge to cover their costs - yes they can. The key argument is whether the charge covers their costs or whether the bank does actually make a profit from that charge.

Hey MattSV - i think you summed this up very precisley.

Morally, maybe the banks should be allowed to do this.

Legally, yes they can cover their own costs. An automated letter is likely to cost close to 35p than £35 though.

But more importantly, legally overrules morally.

[arc123]

quick post before I go for lunch:

Mattsv: you're going off-topic (see my last post) all is irrelevant aside from the fact they legally are not allowed to do so. In your T&C, do they state what the amount per fine will be?? no, didn't think so.

[northwind]

The OFT ruling which is in teh press at the moment ONLY affects credit cards.

I'm very tempted to put out the HBOS response, because it's pretty disgusting- but I think it could get me sacked Suffice to say, the policy is "if people complain enough, cave in, but don't give a penny to the people who don't". I'm really glad I'm not in retail any more, stuff like that drove me nuts. Good people who'd accidentally got a charge but considered it fair paid, while feckless scumbags who knew the power of irritation got their money back.

Originally Posted by Chief

as stated previously - banks are operating unlawfully - IN PLAIN ENGLISH - THEY ARE NOT ALLOWED TO PUNITIVELY CHARGE PEOPLE - A FINE CANNOT BE A PUNISHMENT.

Not that simple. There's a difference between a fine, and a contracted charge. It does depend a lot on how much foresight the banks have put into their T&C. Frinstance, old Bank of Scotland didn't pay their lawyers very much, and worded the T&C very badly.

Here's how it works. You go overdrawn over any agreed limit, and they say "That'll be £30". If they use suitable flannel, that isn't a fine- it's an availability charge- they're making available to you a temporary additional overdraft limit at your request, as is covered in the terms of your contract with them. And you can charge what you want for contracted services. (otherwise, we'd all be suing plumbers)

Yep, I know this is ridiculous, it's a fee by any other name. But so far there's been no rulings and no test cases for these new T&Cs. There's loads of implications against the banks in terms of bankruptcy and debt recovery too, which will need to be worked out- you can't offer the overlimits as a service, then default someone for using them...

But then... It gets complicated, because of the legal standing of this sort of non-negotiable contracts- there's case precedent (I forget the legal term) that they're unenforcable. Almost certainly flawed precedent, and there's counterprecedents - If the previous precedent were considered correct, it'd impact something like 19/20 of all written contracts in the UK. But this is why it's less simple than you might think, and why lawyers and judges get paid more than me.

[mattSV]

Chief

Sincere apologies for going off topic

In your T&C, do they state what the amount per fine will be?? no, didn't think so.

Yes they do - on page 11 of 'A Guide to Personal Current Account fees and interest' (unarranged borrowing, unauthorised transactions, paid referral, default notice) - trust that clarifies this matter for you

Originally Posted by northwind

Frinstance, old Bank of Scotland didn't pay their lawyers very much, and worded the T&C very badly.

Hey, neither did BM and mine still hold water

"Yes they do - on page 11 of 'A Guide to Personal Current Account fees and interest' (unarranged borrowing, unauthorised transactions, paid referral, default notice) - trust that clarifies this matter for you "

Out of interest, do they mention the specific charges?

[mattSV]

akbarhussain wrote:-

"Yes they do - on page 11 of 'A Guide to Personal Current Account fees and interest' (unarranged borrowing, unauthorised transactions, paid referral, default notice) - trust that clarifies this matter for you "

Out of interest, do they mention the specific charges?

This page is broken down into 'Fee Type', 'When Charged' and 'Fee Amount' - it couldn't really be any clearer

But so far there's been no rulings and no test cases for these new T&Cs.

Which appears to be because the banks do not want them testing. As chief quite rightly points out, and can be seen by reading the Consumer Action Group forums - around 90% of claims have been settled. I'm not aware of a bank that has yet turned up in small claims court.

To me (from a non law-specialist point of view) that says at least that the banks are quite happy to pocket their millions of squids every year without having to try defend them. Maybe they can, maybe they can't......... but if you have charges on your account and fancy a crack at getting them back, try now whilst the going's good.