BREAKING NEWS: Banks win Supreme Court appeal over charges!

25 November 2009

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Breaking news from the Supreme Court of all things that are good, right and justiceful is that the banks have WON their appeal in the test case relating to unauthorised overdraft charges.

Diana Ross Lord Phillips is the Supreme Court judge who has handed down the ruling that could shut the door on a flood of refunds to millions of customers of bibblions of pounds. Yes, bibblions.

The ruling means that the Office Of Fair Trading will now not be granted immediate power to scrutinise the fairness of overdraft fees. Had the banks lost, the OFT’s subsequent report would almost certainly have lead to a deluge of refunds. But in his ruling, Lord Phillips said that bank customers agreed to pay overdraft charges as part of the price of having a current account, so they fell outside the scope of the appropriate regulations.

But all is not necessarily lost for campaigners - Lord Phillips said that the OFT could still try to scrutinise bank charges under other regulations. The OFT have previously said that, in the event of a defeat, they would seek to instigate a full competition commission enquiry in a bid to lower overdraft fees.

Which? chief executive, Peter Vicary-Smith, said:

“This is a bitter blow for the millions of people who have been patiently waiting to get their bank charges back. Not only does it give banks licence to charge what they like for unauthorised overdrafts, but it could have ramifications for other areas of personal finance. The banks now have no excuse for introducing other fee charges.

“The banks have done everything possible to frustrate the OFT throughout this process. The OFT and the Government should now explore other avenues it can pursue to get a fair deal for consumers.”

TOPICS:   Banking

80 comments

  • Ash
    This does not suprise me in the slightest!!! All because the government and ultimatly the tax payer would have to bail the banks out AGAIN!!!
  • Spoony
    HBOS is changing to £1 per day for being overdrawn, I say don't bail out the banks. Only the strongest (and decent) ones survive, let the rest go bust!
  • Nobby
    Good. People knew the charges when they signed up to the bank account and used their overdrafts.
  • Tom
    *sigh*. Just goes to show who is really behind the government. Big business scum. Again! Fair enough, you go over drawn expect to get charged. But when there are charges of £35 a day for being £1 overdrawn that's just not fair.
  • Dale
    Well, well, well I wish I could say I'm shocked!!! But I can't!!! Once again the little man gets shit on from a great height and Ash you are right the tax payer would pick the bill up so either way we'd have lost!!! This government and that Lord Phillips should be put in the firing line and have holes blasted out of them with rubber bullets! What a complete shower of shite!!! I would put money on the fact that Lord "the gob shite" Phllips had his palms greased by the banks or has a financial interest in the banks! When is this so called government going to stand up and listen to the electorate that put them there and act on the wave of outrage puring out??? Change the legislation you bunch of fat lazy good-for-nothing fucktards! Earn your inflated wages and the thousands of pounds you've ripped off in expenses you wankers! !! An absolute disgrace of the utmost proportions!!!!!!!
  • Dale
    @ Nobby - what an appropriate name!!! How are these charges fair??? Example - you have £9.99 in your account, a direct debit of £10 comes out! You go 1p over drawn and they write to you saying you can't go overdrawn and charge you £36, so now you're £36.01p overdrawn for the sake of 1p! How is that fair you retard??? Let me guess you're a wanker... sorry banker!!! You earn your bonuses and wages off us so it's all good for you isn't it.......
  • mrdinkle
    What a bunch of money grabbing cockpieces.
  • Rob B.
    As most people have said, no suprises here. OFt have been told they can't appeal to European Court of Appeal but the Banks over-rode a decision that they couldn't take it to the Supreme court so it's pbviously all a load of bull. If the banks DID have to pay back these billions it'd only mean more loans from the government, no way they would let that happen hence the decision today. Lots of backhand tactics & boy's club stuff going on here.
  • DalesGay
    @Dale, Well make sure you have more then £10 in your account you tosser. Its not the banks job or anyone elses to make sure YOU have the right amount of money for YOUR f***ing expenditure. If every customer went over by a penny, it would be costing them money. So GOOD, I hope they continue to charge you assholes who cant sort out your finances!
  • Amanda H.
    How can the banks computers differentiate when the customer has gone overdrawn? anything less than nothing might be good? so -1p is still overdrawn. You knew the charges when you opened the account! (or ignored them?) Its not like they said don't worry if you go 1p overdrawn, we wont charge you £36, and when you do, they charge you, that would not be fair.
  • Dale
    @ Nobby - just for the record I do manage my account and I do have enough money in it to cover my bills! Just because one person does have money it doesn't mean that everyone will and it's idiots like you that make the human race as fucked up as it is! Have you heard of empathy? No probably not! You narcisist! You're so wrapped up in your own little bubble that you fail to see things from someone elses perspective! I feel sorry for you, I really do! I'm glad that you manage your finances properly and I hope that your circumstances never change and you end up on your arse!
  • kev
    if they didnt charge these high fees for overdrafts etc, they'd charge for ATM withdrawls instead better imo to penalise a small group of people for operating outside the terms of their account, rather than every customer having to pay fees on their standard banking
  • dp
    LOL best news for a while. This was a ridiculous case which risked undermined one of foundations of free enterprise- the idea that once you make a deal, you can't go back on it. It was outrageous that the OfT thought they could rip up the contracts that people had signed and go back on the charges they were told clearly about. Good on the new Supreme Court, I say! Incidentally, I highly doubt that people now have any chance of getting refunded. If they go down the CC route, they might lower future charges, but that won't have any bearing on those levied previously. Ah, a victory for common sense...
  • DalesGay
    @Dale It's a BUSINESS transaction, where does empathy come into it? Can you walk into Tesco's and they'l knock of a fiver because your short? No, you'l have to spend 5 quid less. If you cant afford your expenditure then cut back. I agree with Kev! p.s. I am not nobby
  • Dale
    @ Amanda Hugginkiss Yes you make a valid point! I agree to an extent! If this were the case that things were quoted in a contract then they are deemed fair can you please expalin to us all the purpose of the Unfair Contract Terms Act 1977??? Is this simply a waste of paper or was it designed to protect people who might not be ofay in the ways of the law and get roped into things out of necessity, and lets face it in this day and age bank accounts have been engineered to be a necessity!
  • John N.
    fairer approach may be to levy a small monthly charge for providing a bank account but not to penalise people going overdrawn by small amounts. The cost to a bank on a £10 overdraft is minimal so you should'nt charge customers £35 etc per day for the privilege - this equates to a monsterous APR but each pesron should ask about charges before openig new accounts.... e..g. how much I am charged per day if I go overdrawn by £10 etc
  • lutin
    @Nobby. It's not about the banks charging for being overdrawn, it's about them charging a fair amount. Going by your logic they should be able charge whatever they want because customers should sort out their finances. What do you think is a fair charge? £10? Is that too low? If so, why? £100? Is that too high? If so, why?
  • Dale
    @ Kev I agree with what you are saying but wouldn't you agree that banks have diverted from their old ways of investment and speculation to make their money and simply turned to bleeding their customers instead? Look at the profits they have made from overdraft charges.... is this really a small proportion of the populus? No, I don't think it is!!!
  • saxo_appeal
    @Nobby We knew the rules but how the hell can you justify a $36 charge just to send out a bit of paper with the charge notification on it? Bloody shocking this, when the banks are being bailed out we should all have a decision if the government is to bail them out, oh wait we don't get a decision do we! The government just use our tax payers money willy nilly.... including paying for their gardens being dug and conservatories being built. The tax payers should have a decision, government and the cops are all corrupt !! They do what they want because they know they can get away with it, us public should have more of a say !! Get Labour the hell out ! I'm born and bread scottish but ii can't stand the PM.
  • Quietus
    I think some people are missing the point here. The banks were always fully entitled to charge their customers for going overdrawn (and other things), but the point in question si the amount they charge. Banks are supposed to charge their customers an amount that reflects the cost to the bank, which is usually a stamp, and some paper, along with a miniscule administration fee. In most cases, that'd fall well below the £1 mark. The argument is that the banks are not legally entitled to make profit from their customers in this way, so charging these amounts is ridiculous.
  • Dale
    extension to John Newton and reply to Kev I pay £15 per month for my family reward account and I don't go overdrawn, but if I did then I wouldn't get charged! This is fair, the banks make money, I get extra benefits and should I find myself short then I won't have salt thrown in the wound by having bank charges!!! A good deal all round.....
  • Pizza_D_Action
    I too am firmly in the "great news" camp.... I've never gone over my overdraft and incurred these charges, not through luck but by actually knowing whats in my account, whats coming out of my account and making sure I don't go overdrawn. How hard is that... These fees are a charge on the thick of this country and long may it continue...
    • Andy D.
      @Pizza_D-Action - In 2005, I was sacked from my job for something I didn't do as the company looked to slash their wage bill. Because I'd been employed there for less than a year, I was unable to take the case to a tribunal. In the months that followed, I ran up hundreds of pounds worth of charges as my financial situation worsened. Can you explain to me which part of that makes me 'thick'? Thanks in advance! Andy
  • Matt
    Why can't the banks just decline payment if you dont have enough in your account? Do they let you go overdrawn so they can then charge you?
  • Richard
    @spoony Its not quite as simple as letting the bad banks just go bust as all banks are interconnected in terms of their credit lines etc. And if one bank goes bust it can cause chain reactions which could bring down other banks and ultimately that's not good for the economy and would cause everyone to suffer
  • Iphoto
    Some valid points around here however there is no argument to justify that Banks have made Billions and Billions robbing people of over £30-£50 a time for going overdrawn by pence and then have Spunked the money up the wall on Ridiculous Bonus schemes and Poor investing (if the banks are so righteous then they would not be asking us for bail outs for bad Spending themselves) The irony is that these charges still exist for us at such ridiculous levels even when we are now being taxed to correct banking idiocy! . We are a society living beyond its means but thats the way we have been positioned (are we human or are we dancers??- Hunter S Thomson!) DalesGay wake up will you This doesnt come down to expenditure it comes down to exploitation and control over our money Overdrafts should not exist full stop, and people should be charged for using ATM's then people would be more in control of their Funds (think twice about using or spending) and the banks wouldnt be able to charge us from behind a shield of protection.
  • Jeffrey A.
    @quietus Wrong. Most of us these days don't even get a letter to tell us about it, it just automatically gets debited from our account. Quite how this automated process costs £35, I'm not sure.
  • Dale
    @ Iphoto Well said my friend.......
  • Nobby
    @iphoto So if overdrafts should not exist, what would you prefer to happen if you owe, for example, a company £100 and you only have £95 in your account? If you were not able to go overdrawn, would you prefer that the bank refused to make the payment on your behalf, with the possibility of you being denied the service you are buying? If I was charged for using an ATM, I would ask for money over the counter instead (which costs the bank significantly more). If I had to pay for any withdrawal, then I would not use the bank.
  • Paul
    @Quietus +1 I have been charged over £2k several years ago after a rather nasty family circumstance which led to job loss, couldn't pay one single direct debit in month one so i was charged by the bank and vodafone, which then meant i couldn't pay a couple of forthcoming direct debits so i was charged by the bank several times, plus vodafone, etc etc etc. The knock on effect can be tremendous. I've only just finished clearing the mess up, I have no objection to being charged as quite rightly it is not the banks responsibility to make sure i have the money! But the whole thing would never have happened had the charges been proportionate to the banks cost.
  • Jeffrey A.
    As an aside, I was once given nearly £140 charges from one £10 transaction. As I was moving bank accounts, somebody cocked up and took a payment from a debit card attached to my old (now empty) bank account. I didn't realise this until over a month later as the bank account was supposed to be empty and being closed. What happened? They tried to take a payment of £10, this was rejected as my account was empty awaiting closure. Bounced payment? £35 fee. This was automatically attempted again a week later by their automated system, another £35 fee. This took me into the red, another automatic £35 fee. This then supposedly sent my account for 'manual review' which hit me with another fee of £20 or something. As I didn't find out for over a month, this was another £35 fee. Until this point, I had never received any penalty fees, and haven't since. But the banks refused to budge on refunding the fees, the people that tried to take the payment incorrectly refused to refund me. So I had to take them to court for it. £155 in fees, for one single incorrectly processed transaction of £10. This is the reason why these penalty fees ARE unlawful, and should be completely and utterly struck off.
  • Paul
    Also, the Lord Phillips says that we agreed to the terms when joining the bank - well, that may be true, but what alternative option did we have?! Most people HAVE to have a bank to accept their salary, and they all charge these fees.
  • Jeffrey A.
    @nobby - "So if overdrafts should not exist, what would you prefer to happen if you owe, for example, a company £100 and you only have £95 in your account? If you were not able to go overdrawn, would you prefer that the bank refused to make the payment on your behalf, with the possibility of you being denied the service you are buying?" Yes, thats exactly what should happen. If you don't have the money, or don't have an agreed facility of borrowing, then no, you bloody well shouldn't be able to buy something. Maybe that way less people would end up bankrupt and suicidal.
  • dp
    @Dale: I don't think we should have any restrictions on terms in contracts. Why should the government tell me what I can and cannot agree to? As long as I can see what I'm signing up to and can go elsewhere if I want to (and, btw for EVERYBODY, there is COMPETITION in the banking sector, we're seeing that already with new LOW FEE accounts) then I should be able to do whatever I want. At the same time, I am a passionate believer in education - if we were less stupid and stingy with the way we educate kids, they'd be less thick than a lot of the people here, and not get into these situations. @saxo_appeal: you're an idiot @Quietus: um, why can't they make a profit for providing a service? you know, that socialist line of thinking really worked out well in the Soviet Union, eh?
  • Iphoto
    Chances are that if you are not controlling your financial situation then you wouldnt be able to owe anybody anything thats what credit checking is for!!!! Companies should have a period of time for remaining balance to be paid or a roll on to the next bill type system (controlled of course by them! no charges...)if payment does not occur then disconnection etc should occur you will soon learn to pay on time and by the correct amount. The money you would have to get over the counter would take a little longer to get to and you wouldnt be able to spend money in excess at night on alcohol etc unless it was pre planned and clearly thought out. Going into the bank would also mean someone has a job another person out of the dole queue!!!Less taxation Hooray!
  • dp
    @Andy, Paul: Ok those situations suck and I'm sorry for you. But why is it the responsibility of banks, private companies whcih were unconnected to your misfortune, to sort it out? If they scrapped these punitive charges then nobody would bother arranging an overdraft and it would be a complete pain for the banks, and for their bottom line. Increase social protection, don't screw the banks.
    • Andy D.
      @dp "why is it the responsibility of banks, private companies whcih were unconnected to your misfortune, to sort it out?" I never asked them to. But the fact is that when charges are as high as they are, it is very easy for a customer's situation to snowball out of control. Very easy indeed, and it does happen - because the charges are disproportionate. Why should that be the case?
  • Darren
    I love how its all the SKINT people moaning about these charges... if you are overdrawn, you are overdrawn, simple as... dont do it, live within your means... yes the ban makes billions from these charges... but hey thats business... you wouldn't moan if you couldn't do it... yes the bank make £35 on you going over... but not every one goes over just by a penny either.... if everyone goes over by £50 think about the amount of cash these banks are putting up to cover your ill bill management and spending spree's, not to mention that credit card you signed up for and that huge mortgage you knew you could never afford... yes there are extreme cases where people may genuinely go over there overdraft, especially when setting up new Direct debits with companies.. but just call the bank, Lloyds TSB will refund you a maximum 3 times a year any charges you may have incurred accidently. but when you see people wanting to claw back £5k in charges, with the average charge of £35 for unauthorized overdraft charge (thats a 142 £35 charges, average one a month, thats 11 years), shows that this person is cleary not able to manage his finance... so why should the bank sort out your financial mess. at the end of the day, good on the banks... you cant tell me hand on heart that you dont have some kind of bad finance in your live to be whining about bank charges and trying to claw it back and to DAVE who gave the example of £9.99 in his bank account and a DD came out of £10... seriously Dave I would be massively worried if I only had £10 in my account
  • dp
    THE ISSUE OF BAIL OUTS Ok, so we've pumped money into the financial sector. Anybody who thinks we should have let them sink or swim, get out. That would have been an absolute disaster for the economy, for people's savings and we'd be nowhere near a return to economic growth (as we are now). It was the right policy, and in the long-run, the government will make a profit. but wait. we know own part of certain banks. Should we be influencing them as a result, to be 'fairer' on their customers etc? Of course not. Nobody with a brain thinks that government can run businesses better than the market can, and if we interfere like that, we'll soon find our stakes worth much, much less. We provided the money as a temporary stop-gap, not secret nationalisation.
  • Quietus
    @Jeffrey Archer: About me being wrong - I agree only as far as they don't bother sending letters now, but my point stands: No matter how they try to justify it, their costs would never be over £1, and usually much less. As far as being overdrawn is concerned - it shouldn't exist. If you only have £8 in your account, and you want to buy something for £10 - tough shit. Wait until you're paid again. It's the most basic logic there is. If you can't afford it, you don't buy it. Card transactions should be declined. I guess the other side of this that disgusts me is the fact that the banks invest our money at all. Why should they be allowed? I didn't give them my money to fanny-arse around with. I gave it to them because I HAD to give it to them. I HAVE to have an account to be paid into. Bloody ridiculous, if you ask me.
  • Dale
    @dp The point you make about competition only relates to banks as they are today (or the past year or so) previously there was no competition and all banks were the same; reform only commenced when the OfT started looking into these bank charges in 2005/06, your argument is valid to an extent but, these charges etc were almost statutory pre 2005/06 even 2007, where was the competition/choice then? Answer - there was none!!!
  • Paul
    @dp I'm simply saying that their charges should be fair and proportionate. And regarding the unauthorised overdraft, just prevent the transaction then it wouldn't be a problem for the bank.
  • Dale
    @dp You say about financial ruin and people's savings being screwed etc...... Aren't people's savings screwed already? 0.05% BofE base rate? What good is that to savings? "Stimulate the economy" they say, how???? The banks won't give the credit!!! Banks lend money at 20 points + above base rate, how's that fair???? Whilst on the point of BofE base rate please explain why banks are ripping us off in interest rates of 5-7% mortgage rate yet you struggle to get 3% savings rate and that's only if you have £25k +.... what's that all about???
  • Iphoto
    I love the guise that we now own part of the banks what utter rubbish. We do not control any more than we ever have (zero) We do not make the decisions on how this country Runs, Works, or even sends its sons to war. Our votes are counted our voices are hushed and our Pockets emptied while Bankers and Politicians Grow fat, Live like Kings, and Hide behind Business, Parliament, and war (the Kansas city Shuffle- we look left they go right!). REVOLUTION MY FRIENDS it has happened before and it will happen again good, Hardworking intelligent people willl only be held down for so long and made to look like fools. Be that through charges or Political decisions made for the good of our countries that affect us all THE GOOD SHALL TRIUMPH!!!
  • adam
    I agree that the banks are a bunch of... Though what I can't understand is the stupidity of some of their customers. They are reckless with money and expect something for nothing. When taking out debit card /overdrafts and or credit cards look on money saving expert , if you do not know how to work out charges. Sometimes people make out that the banks are screwing us over, they will only do so if you let them screw you over.
  • dp
    @Dale (1): I'm pretty sure you can have gone for a basic bank account which would have prevented unauthorised overdrafts (or indeed just have agreed an overdraft prior to using it)... @Paul: But they shouldn't be 'fair and proportionate'. Of course they exist as a disincentive, because, as I said, it's better for everybody if people tell the banks about potential borrowing requirements before using them. For people who don't have that opportunity because of misfortune, it's not up to the banks to help you out, it's the role of the state. You aren't *entitled* to an unauthorised overdraft from a private company... @Dale(2): Well this is a bit silly. If banks had gone under, people with more than £30k would have lost loads, small businesses would have lost loads, and nobody would trust banks again for a very long time. And it would still have cost loads to clear up, because the FSCS is underfunded would have needed government money. The question about large spreads between loans and savings is actually, ironically, another example of silly interventionist policies screwing up the market. We can't both tell banks to rebuild their balance sheets and keep lending. They're doing what they can to do both, and if any one of them were making outrageously unfair profits, the others would try to do the same, pushing prices down by competition. Again, it's just how markets work
  • Inactive
    Perhaps if the UK Banks do as the Spanish Banks do, no overdrfafts at all, no funds in account = Direct Debits just don't get paid, water/electricity/telephone gets cut off, it certainly focuses the customers attention to their money management.
  • Nobby
    @Quietus... I guess the other side of this that disgusts me is the fact that the banks invest our money at all. Why should they be allowed? I didn’t give them my money to fanny-arse around with. I gave it to them because I HAD to give it to them. I HAVE to have an account to be paid into. Bloody ridiculous, if you ask me. If you don't want a bank to have your money, withdraw the entire amount every week / month when you are paid. And if you think banks should not invest, what should they do? Should they just take money and put it into a big box and let you have it back when you ask for it? If banks are not allowed to invest ... in businesses, in mortgages, etc, ... then the economy would soon die.
  • dp
    @Andy It only 'snowballs' because a customer decides to use an account which they know will allow unauthorised overdrafts to accrue (at a certain cost) and then continues to use that account. At any stage they could close that account and take care of their own finances (or, reasonably, expect assistance from the govt). All of the information is given and it's just a case of taking responsibility for your own agreements. You have no entitlement to emergency credit and you are responsible for any charges that arise. You can't force me to sell my laptop for a 'proportionate' price - I can charge what I want - and it's the same for the banks. If your argument is that people were too stupid to realise that this would happen, then educate then better, and run public awareness campaigns about the situation. Don't screw the banks.
    • Andy D.
      @dp - "At any stage they could close that account and take care of their own finances (or, reasonably, expect assistance from the govt)" Surely closing the account would mean settling the amount that the account was overdrawn? If someone could do that, then there would be no 'snowballing.' What is this assistance from the government that you speak of? Elaborate please. "If your argument is that people were too stupid to realise that this would happen, then educate then better, and run public awareness campaigns about the situation." At what point did I even remotely go into that area. Are you even reading my replies? Fucking hell. To reiterate, nobody is against the idea of charges but many of us passionately feel that they are TOO FUCKING HIGH. Understand? Contracts exist for the benefit of both parties, not just the stronger of the two.
  • Paul
    dp, I had a basic account - still went into the unauthorised overdraft by £6 because of the DD. If they had prevented that then vodafone would have been pissed (rightly so) and cut me off (they did anyway) but at least that would have been an end of it. But no, £125 later....bring on the snowball. I'm talking about a solution to potential problems, not reclaiming my charges. Of course, this will never happen because the banks profit so much from allowing the unauthorised overdraft.
  • Amanda H.
    Teletubbies is on.
  • lutin
    @Darren "I love how its all the SKINT people moaning about these charges…" Na, na it's not. I've never been overdrawn in my life. Never had charges. It only takes someone with an above average IQ to understand that the charges aren't proportionate. No-one is saying that they shouldn't charge, only that the charges aren't fair (do you understand what the word "fair" means in this context?). Please, before commenting again, make sure that you have understood what the issue is.
  • Quietus
    @ Nobby Not sure why I didn't add it into my message above, but my thinking was aimed more at banks charging people to have an active account, much like (I think) some of the European counrties do. Just charge every customer £2 (or something) a month, which will make their money, and make being a bank a profitable venture. The rest could then be as I mentioned above, but without the hassle of such things as going overdrawn. Hope that clears my thinking up a bit. =) Also, I didn't mean that I had a problem with using banks - just that I didn't see why they'd need to invest it. It wouldn't damage the economy that much if they were still making their profist elsewhere. Perhaps initially it would do so, because that's the way we're used to being governed, but returning to older (trade-based) values only serves to improve the strength of the country. Give the power back to in-house production, giving power back to the people. This mentality spreads across the board, with things such as the supermarkets always importing, power supplies being imported - all of them serve to harm our economy, but that's how we've let it become. If something negative happens in the European countries, they have uprisings in the street. Our problem is that we just sit here and take it all. Look at fuel: A few years back, when it hit 80p, we had lorries blocking major motorways, creating havoc, and getting a result. Now it regularly sits over the £1 mark, and we do nothing! I've waffled enough! =P
  • mjpl
    Amazing. All I can say is ha ha to all the twats giving me abuse in the previous post on this subject. The fact is you signed a contract that stated the penalty for failure to perform in line with the terms of your agreement. You were happy to let the bank stick to their side of the agreement but the moment those terms are to your detriment they are suddenly unlawful. The fact is we all know bank charges are unfair, but so are many other things. The control of these charges should be that of the FSA. There should be clear guidelines set out to which all banks must be forced to agree to. This is the job of the government. The powers the FSA wield against other areas of the financial services sector are unbelievable, they should have the same power against the banks. There is no point expecting commercial enterprises to self-regulate. The one point I agree with despite it being made by a cock of the highest order is that any attempt to exceed an overdraft should simply be declined, much in the same way a card is in a shop or cash point when there are insufficient funds.
  • mjpl
    @ Andy Dawson What prevents you from calling your bank and advising them to cancel all standing orders and to request they decline/cancel any direct debits on your account as you will be unable to supply funds to honor those charges. This is then followed up by a call to the relevant providers advising them that you do not have the funds in place and to request the direct debit be cancelled while you agree a payment plan. Most of these companies put at the bottom of every invoice (if you have any difficulties meeting your payments, please contact us) Alternatively if you only need short term cover you can call the bank and ask them to extend your overdraft for a short period to cover those costs. I have used these methods on a number of occasions to avoid charges and it normally seems to work.
  • Quietus
    To echo Andy's iteration above, it seems that people are misreading things: We are not debating the legality / fairness of being charged for these breaches, but are simply contesting the extortionate amount.
  • Pizza_D_Action
    Lets face it though, these charges are NOT levied on people using their overdraft, they are levied on people going OVER THEIR OVERDRAFT. Your overdraft is there for emergencies, not for you to use willy nilly and then in an emergency use an unagreed overdraft. If you are using an overdraft except in an emergency then you are already living beyond your means in which case you need to increase income or reduce outgoings.
    • Andy D.
      @Pizza_D_Action - Just adding you to the long list of contributors who are COMPLETELY MISSING THE FUCKING POINT. Thanks for stopping by.
  • Pizza_D_Action
    @ Andy Dawson "Can you explain to me which part of that makes me ‘thick’?" The part where you didn't put any money aside to cover eventualities such as redundancy / being fired / getting divorced etc.
    • Andy D.
      @Pizza_D_Action Ha ha ha ha. Idiot.
  • speedski
    Ok so they're too high - change them to lower - but I cannot fathom why people think they should be entitled to backdate the amount paid. Some banks have already dropped fees, and I expect others will too after this. I personally have a neighbour who buys lots of shit they don't need - they live far beyond thier means but yet they feel its not fair they were charged fees when they ran out of money - for them I am delighted this has gone in the banks favour - people have to take responsiblity for the spending they make - they don't NEED blu-rays, three dogs, four cats and a 50mb internet connection - its just utter bollocks - banks have over charged, people have over spent - much like the loans and insurance industry this will end up being the correction factor to the fees...
  • dp
    @Andy Dawson "To reiterate, nobody is against the idea of charges but many of us passionately feel that they are TOO FUCKING HIGH. Understand? Contracts exist for the benefit of both parties, not just the stronger of the two." Um, do you understand what a contract is? It's just an agreement - anything from a simple deal to buy a chocolate bar, to a complicated mortgage agreement. When they're complicated, they get written down, for clarity. They don't exist to 'protect' anybody, they just state the terms of the agreement. If you, and a load of other fools, signed an agreement that said you'd pay these fees if you went overdrawn, then you have to pay them. You can't get the government to let you take back that agreement. That's bullshit and you know it. If they're too high, then don't use that service! Switch banks, or if that's no possible, don't get emergency credit! You can't force the banks to provide a service for you for a 'reasonable' price, they get to CHOOSE what they charge. If you don't have the funds to cover payments, STOP THE FUCKING PAYMENTS. Either you're a complete RETARD, or a fucking commie. You'd be singing a different tune if you'd lived in Eastern Europe 30 years ago.
    • Andy D.
      @dp - Consumer contract law exists so that the stronger party in any given situation can't run roughshod over the weaker party by blinding them with jargon. Hope that helps. @Pizza_D_Action - the point that is being discussed is the weight of the financial penalties deployed by the banks, not about whether people should look after their accounts better or save up for a rainy day. I've read back through your comments today and you are yet to say anything about whether you feel £39 is an excessive penalty for someone who has gone over their overdraft limit by a couple of quid. It's like there's a conversation going on here about hats and you're busy shouting about the curtains.
      • Andy D.
        We're still a pro-consumer site by the way in case anyone was getting confused by the presence of these muddle-brained apologists....
  • Pizza_D_Action
    Please feel free to enlighten me on the point that I am missing Andy (or anyone else). I've heard all of the arguments and have seen holes shot through them all too - strangely I get the feeling some court or other agreed with me today although I could be wrong.... :D
  • Pizza_D_Action
    @ Andy Dawson - "Ha ha ha ha. Idiot." As soon as you can't rebuke a post except with "ha ha ha" and a petty insult, you've already admitted defeat.
  • Marty P.
    Bus Companies If I dont have the far I cant ride on the bus. I dont expect the other passengers to pay for me, but equally if I get caught fare dodging I dont expect to be subsiding the other passengers. Most importantly I am not surprised that the bus company exists to make a profit. It doesnt drive up to my door for my personal pleasure, it runs buses on routes where it makes the most profit and exists for the shareholders. Happily it provides a service and most are willing to pay ( or have to choice if they need to get to work) and thus both provide a service and makes lots of money. If you want to borrow for free go to a library - bot dont be overdue......
  • Pizza_D_Action
    @ Andy Dawson - I at least appreciate your courtesy in a sensible reply this time :) Are the charges fair - have a look at the comments on the Tesco "Muddy Fox Mountain Bike" article.... same applies here. The banks are businesses, IMHO they are entitled to charge whatever they wish for their services. If customers don't like it then they are perfectly entitled to move their custom elsewhere. Every time I read a comment (on other forums as well as here) from someone with bank charges its always "I was 1p over my overdraft and they charged me £30", "I was 50p over", "I was a couple of quid over". Where do you draw the line? You are made aware of the charges up front, IMHO that makes them fair whatever they are.
  • Ryan
    @Pizza_D_Action - If an overdraft is for emergencys only then why do they chuck overdrafts of around £3,000 to new students?! Because they want you to be in an overdraft because it pays when you go over it.
  • James
    @ Andy Dawson I believe that everyone without fail thinks the charges are too high. The issue is that they are lawful. Fair or unfair really don't have much place in consumer law though the OFT can become involved in some issues. This is clearly not one of them. You are correct that the unfair terms in contracts legislation exists to ensure that contracts are balanced and free from legal jargon where possible. However this relates to onerous clauses and does not cover the setting of charges, penalties or costs for a service. However, stating that if you exceed your overdraft limit you will be liable to a penalty of £xxx is not exactly taxing legal jargon. A similar case is being trumpeted over Foxtons but in fact the victory to-date is only that Foxtons terms were inherently unfair and not that agents cant charge for renewal fees. I think that regulation for fees should come in but at the same time if the banks really did make £2.5 billion a year in fees, I hardly think the matter is limited to those few unfortunates with mitigating circumstances but more likely the tens of thousands out there (me included at times) who like to spend what they dont have. When they use money no theirs knowing the penalty why do they then cry foul.
  • James
    @ Ryan The point was that 'you' should be using it for an emergency. The banks don't give shit what you do as they want to earn money from you. What is trying to be stated in this thread is that you need to look after your own situation and not expect the OFT to come and dig you out of a hole no matter how unfair you perceive the charges to be. And the government are hardly in a position to talk about reducing charges when parking fines, clamping and all other local authority imposed fines and charges are fucking outrageous.
  • Darren
    @LUTIN DARREN “I love how its all the SKINT people moaning about these charges…” LUTIN Na, na it’s not. I’ve never been overdrawn in my life. Never had charges. So whats the problem then? any charge from the bank is a sign of being penalized for something you shouldn't have done... but you wouldnt know that you havent been skint. Look 2 years ago we would have all kicked up a right stink about how we should look after our own pennies and thats a fact. but what the banks should do now is say, look we are still right to charge you, which I agree with, but as you the public bailed us out, this is what we are going to do... and they should look at reducing the cost of the fees for all your skint people out there.. instead of £15 its £5 etc.... at the end of the day, you got yourself into this mess, why should the bank help you.. but seeming as we bailed the banks out, then they need to give a little return... I haven't seen one bank say thanks to the british public, or offer any sort of new service in return.
  • Nobby
    @Ryan If an overdraft is for emergencys only then why do they chuck overdrafts of around £3,000 to new students?! Because they want you to be in an overdraft because it pays when you go over it. It is also because banks realise that students in particular might have good reason to use an approved overdraft. For example, student loads this year were late for many, and so a pre-approved overdraft which was free or with low fees was useful in this situation. Why do they do it? Becaude, for some reason, many people are loyal to their bank and never switch. So to get someone early, when they are just starting out as an adult, is good for banks as chances are they will stick with them for years. I'm not sure why people are loyal, it is easy to switch if your bank pisses you off. I always find it funny when people complain that they don't get rewarded for their loyalty and only new customers are rewarded. Loyal customers are just ones that are too lazy to switch.
  • Si
    You're more likely to get arrested than switch banks. FACT.
  • stinkybeard
    To all those people who are relieved that they will continue to receive free banking as a result of this decision; Don't most other countries have banks that charge for current accounts? So, why should the people who can least afford it in the UK, subsidise those who can by paying extortionate fees? I think everyone should pay a small fee for their banking so that the banks stop pilfering from the poor.
  • Brizoh
    Here's a thought. When I signed up for my first ever proper bank account many, many years ago a bank charge was £9. Yes, £9!! So, tell me what the fuck has ever happened in the banking industry to justify a near 450% increase? And you never had any choice in the matter. The bank would simply write and say: "Oh by the way, we're going to put up the charges we levy against you to £x because we can and we need to pay our shareholders, and we don't have enough money for our own nefarious needs." If you tried to switch banks, you got hit with the same shite wherever you went and whenever one bank put charges up the rest would follow soon after. The banks have a collective monopoly on the market, charging what they want because they can, safe in the knowledge that you HAVE to have a bank account of some form in today's world. I did not - and never did - sign up for a charge of £39 and the bank never, ever gave me the option to say no whenver they decided to put their charges up. Simply, "we're going to charage you £39 whenever you bounce a direct debit." and with all the banks doing the same, there's nowhere for a consumer to go.
  • Holly
    Sorry to all you "people who hug bankers" but there is a new dawn approaching in the fight against the Bank Charge SCANDAL. Wallow in your smug-trough for a bit whilst we re draft all the court case papers to incorporate section 5 of UTCCR (amongst other things). Cheers to Lord Pip for the top tip! Lets hope we can get it properly tested at court before the OFT/FSA get their power struggle back on track and lead us all along the scenic route again for 2-3 years!
  • saxo_appeal
    @dp No your the idiot !!
  • Eugenio L.
    Twilight is definitely one of the times when I preferred to read instead of going to the movies.

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