Bank Charges

A question about : Bank Charges

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Hi everyone, I recently posted a thread about my bank charges for unpaid direct debits. I was kindly advised that these were penalty charges that could not be added to my account and that I should write to the bank advising them that it was illegal. The Courts would not enforce Penalty charges. (www.bankchargeshell.co.uk)

I have written a letter to the bank concerned advising that they cannot enforce a penalty charge. However, the bank doesn't seem fazed.

Can anyone advise what I should do now? I don't really want to risk it with the Courts.

Best answers:

• Not sure about the accuracy of the specifics in this website. There are a number of additional arguments you can use with them (courtesy of the FSA).
  Firstly, financial institutions need to comply with the Principles for Business. Principle 6 Customers' interests requires them to "pay due regard to the interests of its customers and treat them fairly". This is currently a big theme for the FSA - see here for more information on this.
  Secondly, the FSA has taken on more responsibility for challenging unfair contact terms - see here and here for more information on this.
  Depending on the firm concerned and the details of your case, using these terms may work. Finally, I've always found that I have more luck in getting charges waived as a one-off goodwill gesture if you escalate up the chain (ask to speak to a supervisor). However, if you've written to them, the informal approach may not work.
  Try e-mailing the CEO (letters get intercepted) with a concise letter explaining the problem and why you feel you haven't been treated fairly.
• Expert? Moi? Well maybe.
  The bank will almost certainly not agree with the legal analysis, they will hope that you just go away.
  It really is cheap and easy to start legal proceedings against them for recovery of these charges.
  There is a whole host of reasons why they are illegal.
  Write them a letter explaining that they are a breach of the 1999 Consumer Credit Act and that they are punitive charges and therefore not enforcable in law. Tell them to send the charges back to you within 7 days or you will take legal action.
  When they don't give the money back (sometimes they do - MBNA, Barclaycard just roll over and give it back when threatened with legal action), start an on-line money claim at the HMCS site and add the 8% APR for each charges.
  You will have to pay up front but you will get this money back from the bank. If the amount is over Ј1500, then you will have to pay an additional Ј100 when a court is allocated, although, again - you will get this back from the bank.
  I have done this 3 times now and am about to start another 2 cases against Barclays and Abbey.
  As to not risking it with the courts - there is no risk apart from your initial court costs (minimal expense - to get Ј1711 from Abbey cost me Ј120, which I got back).
  I do not know of any bank that has let it go as far as court - they know as well as I do that they would lose, and that it would open the floodgates for similar cases - a situation that they will avoid at all costs.
  Out of interest, which bank is it?
• I administer my father's account at one of the High St banks (which I wouldn't touch with a bargepole with my money) and they are always making errors.
  I now enforce a penalty charge on THEM every time they foul up. When they first got wind of this, they moaned like hell, but they never claim that the charges are unfair. They know you have them over a barrel, and now they pay up without question. So far I have charged them Ј220 in penalties and received every penny!
• Nope, just told them that their "terms & conditions" cut both ways. If they charge me for a mistake, I am justified in charging them.
  Wouldn't it be wonderful if they wrote back saying that charging them Ј30 for an error was an unfair charge?! The Financial Ombudsman would probably kill for a copy of such a letter in view of his investigations into penalty charges!
• I wish a bank would charge me a penalty and not repay it on request. Such fun. So far I have always agreed with them that they could make the charge because it was detailed in the T&Cs. I then invite them, as a gesture of good will to make an ex gratia payment of the same amount. This has been done every time so far. What a chiz.
• Seriously, though. You MUST sue them for recovery. You wouldn't let any other thief get away with this, and so too, you mustn't let them.
  There really is no risk, apart from the initial court costs, which are minimal. I am not aware of any bank actually allowing themselves to be taken to court - for obvious reasons. It takes about an hour of your time in total (writing letters etc... which I can provide for you) over the period of the legal proceedings. Surely getting your money back from such thieving banks is worth an hour of anyones time?
  Quote:
• my other thoughts on this are, & it's not just banking but any application form that we sign, if we don't intend to abide by the T & C that we are signing for to say that 'I have read & understood the terms & conditions' does this mean that even if we sign on the dotted line our signature is no longer worth the paper its written on?
• For a bank to allow people to 'exceed it's facilities' is entirely at the banks discretion.
  This situation is created by the banks for their own benifit. If I don't have enough money in my account to pay someone in cash, then the cashpoint refuses to give me money. Fair enough. I don't get charged for not having enough money in the account to draw out a tenner if I owe it to my brother, so why should a DD be any different?
  If I have a bank account that doesn't have enough money to pay a DD, then what business is it of the banks? It's purely an agreement between me and the person I am paying.
  Quote:
• I'm sorry but don't accuse me of having any morals! - so you're playing the 'education' card & have a degree in sociology & anyone who isn't educated to your standard doesn't know what they're talking about & should listen to you because you have a degree & so you are right & those of us who don't have a degree are wrong? - what about taking responsibility for ones own actions - I'm fed up of this 'it's not my fault, guv' attitude that prevails in this country & 'compo culture' - to quote you 'what business is it of the banks if you haven't the funds to meet your DD' - not the Bank but this time the company that you SIGNED the DD with to pay an amount that you owe them, you signed a DD to pay them via your bank account then 'it's not my fault, I'll take the bank etc to court' when you don't leave enough in your account to pay the people you owe the money to - everyone has a choice - if you haven't the funds to meet the payments , don't write chqs you can't honour & cancel any d/ds you know you can't pay beforehand & come to some arrangement with the company - you take your car to a garage to be repaired & they tell you the charges up front, when you collect your car you decide their fees are too high in your opinion & so you refuse to pay & decide to take them to court? - these boards/forums are for everyones opinions whether they agree with yours or not - it's not for you to take the moral highground & decree who has morals & who has not, it's all a question of opinion - you have yours & I have mine - FYI we fell on 'hard times' as you put it & my husband had 48 hours notice that his firm was closing & he had no job - the DSS weren't helpful as he worked Sats & Suns which weren't calculated in his entitlement - that was the 1st & last time he was in the DSS - he walked from there to the job centre where he picked up the 1st job available which was low paid but kept us going until he could find something more permanent as we had a 3yr old & I was 6 weeks away from the birth of our 2nd child - we were one of the 'poor people' as you put it!
• The charges system in the UK is simply down to the type of model we have for banking. For example most people expect free banking on their account, in return you expect counter service, phone banking. internet banking and other services for free. In reality all of these cost some money, it may not be much but I have heard that on paper at least most banks make a loss on offering the most basic forms of current account. They do however start to recoup some of that when you start paying interest on overdrafts and it can become profitable when charges are added.
  As most people probably keep within their banking agreement the banks have to make a profit from every one else. So in reality it is those who incur the changes, which in many cases are in the worst financial position that end up paying for the banking services of everyone else, even the very wealthly. So the next time you walk past a branch of High Street Private Bank X or someone similar, and notice their plush offices for those with accounts with over Ј100,000 in them, just remember they are benefiting from your charges.
  So in effect banks are the opposite of Robin Hood, they rob the poor to pay the rich.
  I fail to see how it costs Ј30 to pay an already authorised debit card transaction which pushes you over the limit. I do think it is fair that there is some charge, but it should be lower and be applied more fairly for example a Ј1 or somthing like that.
  Also if we really do want to see an end to unfair bank charges it means that those who are currently enjoying free banking and are hence being subsidised (quite often by the poor) would need to start paying for everyday banking transactions, or even just a flat fee per month. However I cannot see the rest of us being willing to start paying for basic banking services. A few years ago it was calculated that to offer a current account cost around Ј140 for each customer. This has to come from somewhere.
  The model in the UK contrasts sharply with many other countries where you have to pay for a current account, or if you dont you pay for additional services like web banking etc. I am sure we would complain at such things in the UK, however the upside is that the charges for breaking agreements (I will need to check this), or even making international payments are much lower.
  In essence the UK model charges for exceptional events, such as going over your limit and these charges have no relationship to the actual cost of the event. Where as if we want fair banking we need to lower these charges and share the costs more evenly around all the customers.