Bank overdraft charges legal
 

BBC NEWS | Business | Bank's overdraft charges upheld

Door slams shut!!

Ouch. Mine are in the process.

It's not necessarily the end as it were. This was only a disctrict court and as such the verdict will not be used as any form of precedent.

However, it will undoubtably give banks confidence in going the full distance and sticking it out for a court appearance.

Why doesn't this surprise me? Rip-off Britain again:(

Alcazar

Rip off ?!

In 15 years of having a bank account I've never paid a single charge I havent been fully aware off.

So apart from non-existant interest rate on current account (but I only ever keep the bare minimum in the current account) I only pay for using the odd cash point. Mostly though 3rd parties these days with cashpoints in odd places. I'm fine with that, somebody provides "a service" - I "pay" for it.

I reckon I've paid well under £20 for 15 years banking. More than happy for it to be funded by people who cant manage their own money.

Happy for you. Do you long for the return of Maggie too? :rolleyes:

Alcazar

Gordon, Tony B. Liar or Maggie ?

Yes I'd take Maggie every time.

All for Small government. Let people keep their taxes and decide how *they* want to spend them. If the last 10 years have proven anything its that throwing "my" money at overblown state entities does NOT give better service.

But i fail to see how thats relevant really !?

Manage your money...dont pay bank charges. Not really complex.

To be fair, he is right. If you don't go over your pre-agreed limit, then you don't pay. We have enjoyed fee free banking, credit cards and various other facilities for ages now.

One thing is for absolute certain. If the OFT official report says that bank charges are illegal, the money will be clawed back somewhere, probably in banking fees.

Basically, instead of only payong when you go over your limit, you will be paying *all* the time. You won't be any better off.

Sounds actually like he'll be on of the ones who is better off. It will be yet another example where the sensible people who simply get on with life, manage their money and pay their taxes get stiffed to subsidise the scrounging, workshy masses who couldn't manage their way out of a paper bag or "labour voters" as I like to call them.

Read the article. If the guy appeals and puts his case forward properly he'll get his cash.

In any other form of financial agreement you have penalties for not abiding by the contractual terms of that agreement.

Why should overdraft charges be any different, if the bank formally agrees to allow you to withdraw £250 of money you don't have and you decide to withdraw £400, why shouldn't you get charged??

At the end of the day a bank is there to make money (and pay my contracting wage :D) and they're not a charity.

I personally hope the OFT decides the charges are legal as it means I won't be paying to subsidise all you people who think you have a god given right to own that 42" plasma tv even though you can't afford it.

Whilst I agree in principle that you should be charged for not abiding to a contractual agreement, if those agreements are illegal in the first place, then the structure needs to be looked at.

As it stands, a fee of £30 every time you go over your limit, chargeable 3 times in a calender month, seems somewhat excessive. It also seems to be the "man in the street" that pays these charges. By that I mean if you are a customer with a record of having several tens of thousands of pounds running through the account you will find those charges are "flexible".

At the moment it is possible for someone to be charged £30 for going a penny over their limit, then another £30 if they then go another penny over, and then another £30 if they go yet another penny over - Is this fair treatment? The OFT seems to think not, hence the influx of claims.

There is something quite rotten with a system that makes money out of those people who are obviously in no position to pay it.

The banks would have a far more defenceable position if the charge were , say , £15.


Notwithstanding the above, of course, the most sensible position would be to ensure you don;t go over an agreed limit, and then you never have the problem.

In addition to this, the banks really are a sly bunch of tossers sometimes.

An example. A friend of mine has a claim in with the Abbey for £600 odd. She put in the claim and went throught the normal procedure, until the first settlement offer from Abbey came though; £150.

Of course my friend wrote back to them rejecting the offer. However, the bank took the step of actually paying the £150 into her account the day after she received to the offe rletter, withot waiting for a response.

I told her not to touch a penny of the money (despite her being absolutely desperate for it)

The bank are now saying that since the money was paid in, she has by default accepted the offer!

It's this sort of underhand tactic that makes it very difficult to have any sympathy with Banks, even if on a contractual basis, they have the right of it with some form of charge.

The customer in this case must be an idiot as he lost in spite of the fact the bank did not attend. There is more to this than meets the eye!

I think it will be a different matter on the appeal.

gotta agree with the free banking for years comment, pretty sure the bank slipping the cash into the account imediately after notification is a normal procedure but you would have 28days to raise protest & the advise not to touch it is spot on.

I have a 42" plasma & it took me ages ( around a year ) to SAVE for it, a concept which appears to be dead ???

god I feel old....................................S

If you read what the judge said, it seems the claim was not for charges pertaining to "over your overdraft" fees.

Having held that the charges complained of are not charges for breach of contract but part of the price of the services provided by the bank....he has not satisfied me that he has any ground in law for recovering from the bank the amount of any charges which he has paid to it

That reads to me that he didn't claim for breach of contract charges - I.e. "over overdraft"

Banks have been warned by a High Court judge to stop putting unnecessary pressure on customers seeking to reclaim "unfair" penalty charges.

Judge David Mackie QC said some banks had employed tactics that placed needless work and anxiety on claimants seeking to take their current account provider to court.

As such, he warned banks that such behaviour would be deemed to be "unreasonable" and could open the way for claimants to demand further compensation.

The comments made at London Mercantile Court highlighted a growing frustration within the legal community over the lack of a test case over the legal status of fees that can go as high as £39 for going over an agreed overdraft limit.

Judge Mackie said: "Over 300 cases have now been referred to this court, over 140 in April alone. There has been no test case decision because despite putting in detailed written defences the banks have always settled or paid up shortly before or at the hearing.

"On the face of things, each case raises serious issues which a court would permit to proceed to trial. But this is fantasy because, at least for the moment, we all know that there will be no trial."

Judge Mackie noted that in some instances banks had requested detailed information from claimants as if a case were heading for trial.

"Looked at in the real world where there will be no trial, these steps, which place completely pointless work and some anxiety on litigants in person, constitute unreasonable behaviour," he said.

As such, claimants who have been put to unnecessary work and inconvenience may be entitled to compensation.

Judge Mackie added: "Of course a claimant may in some cases face the same risk if he or she behaves unreasonably."

Brian Capon, spokesman for the British Bankers' Association, said banks take the court process "very seriously" but that ultimately they prefer to settle disputes with customers outside the court room.

"Where a customer's complaint dates back over a long period or is complex the bank will need longer to investigate the complaint properly," he said.