Bank charges case: Possible £150 billion pay out if banks lose

7 July 2009

There’s been a curious twist in the ongoing bank charges legal wrangle. As the tussle between the OFT and seven of the big banks hits the House Of Lords, some new language has been introduced into the banks’ withering defence.

The Consumer Action Group have been at the forefront of the deluge of penalty charge claims for almost five years now, and they’re reporting that the banks appear to be shifting the nature of their defence, and attempting to head off what could turn out to be a catastrophically huge payout to customers, describing them as ‘dead men walking.’

For the banks, their major fear is that should they lose the case, they could be forced to reveal how much profit they have made from reinvesting the unlawful charges down the years. This could then lead to claims from customers for their share of those profits made from the money that the banks should theoretically never have had in the first place. Juicy stuff indeed crimefighters.

Additionally, in the event of a loss by the banks, it looks as though customers will be able to make claims dating back as far as 1995, instead of the previous six-year period. Juicier and juicier.

Of course, all of this is hypothetical and the Law Lords may still find in favour of the banks. By the same reasonling, Lewis Hamilton may also go on to win the 2009 Formula 1 Championship. Bundle all of these facts ‘n’ stats together (apart from the Lewis Hamilton one – that’s irrelevant) and the Consumer Action Group are estimating that the banks could eventually be forced to pay back £150 billion to punters.

Super Juicy!

[Consumer Action Group]


  • The S.
    We OWN some of these banks, so the taxpayers will be paying money to the financially illiterate who can't be bothered staying within their credit limits and incurring bank charges.
  • Jay D.
    Wouldn't this mean that the banks would be in crisis again, as I doubt they have a spare £150B floating around. This might mean that we'd have to bail them out with taxpayers cash from the government, which we would end up paying back with higher taxes...... oh wait... maybe I see a problem with this....
  • Elias
    Great. Now the banks, and by extension everyone else, will be even more fucked. Consumer revenge my arse, it's quite simple - don't go over your limit, you won't get charged. How nice it is that people who want to have their cake, eat it, then have some more for absolutely nothing will now get lots and lots of money. idiots.
  • Angus G.
    I was charged £133.00 in bank charges after an unauthorised withdrawal of £600.00 was made from my account, causing three direct debits to reject and my account to go into unauthorised overdraft. Despite the fact that I had no control over the shennanigans which resulted in the charges the bank has refused to refund them, and I have joined the queue to sue the buggers. I am NOT "financially illiterate", and it is me that has been fucked by my bank, not the other way around. It is not as simple as Elias suggests; I didn't go over my limit, but the baks jumped at the opportunity to roll me over anyway. The banks in this country have had it their own way for far too long; they've been calling the tune, and bow the piper has come to be paid. It's a big, big bill, and they deserve the lot.
  • DavidW
    Excellent: the banks will stop behaving illegally, but all our coins will disappear. Still, claiming they didn't have the money didn't exactly work out for the Dame Shirley Porter ( did it?
  • Lumoruk
    The government will have to step in surely and say that it's in the country's interest that this does not go any further
  • billybob
    at the end of the day all those bank charges ahve been paid oput to fat cat bosses over the years with thier millions in bonuses.....that money has been spent a long time ago or is being lived in! the banks have been fucked royally over the years by the people running them.......we had to pay then and we'll have to pay again in 1 way or another.....the most probable will be tax rates and interest over the next few years while the economy gets itself right we pay again yet the cunbts that fucked it and took the fucking millions in bonuses get away scott free......the new criminals of this world
  • stephen1976
    WHAT we own the banks, What planet are some people live on, the Government owns the banks, but with very little control. Joe public will not see any profit, the government is not going to say, lets give every one a cheque because we made loads on these shares. Or say lets stop tax for six months, Get real if they do make a profit they will just spend it on what they see fit might even be sent aboard as aid. The only time you have a say in when you vote. And we all know how good the governments are at keeping their pledges. Most just line their own pocket. Cake and Eat it , these people have been royally ripped off. Some have been left we £10 a week to feed a family and pay their bill, so dam right they should have back what was taken from the unlawfully. Sorry but some people really need to take dam hard look in the mirror and stop thinking about themselves. We have enough banker’s and MP’s who do that. Thank god there are decent member of our society who will stand up for others to prevent and put a stop to injustice.
  • Andy D.
    And stephen1976 has the correct answer. Thanks for playing folks!
  • nipper
    Too fucking right!!! Justice will be done....£35 for a computerised letter and a fucking stamp for going 23p overdrawn.....Hope the banks get all that is coming to them
  • Masood S.
    Whatever happens and however you dress it up with "people should stay within their overdrafts". The bottom line is Banks should not behave illegally. I have had these charges occasionally myself and only have a small claim to make but damn right I will want every single penny and interest on it. If someone took £30 from your pocket would you forget about it??? Damn right you wouldnt. I dont care if all the buggers end up on the streets, they had no right to steal this money from the British Consumer.
  • Inactive
    Of course all of us people that don't spend the banks money without their authority will no doubt end up being charged for using our previously free accounts, to fund this lot.
  • negbobsquarepants
    So what happens to the £150bn they pay back to us, where does it all end up eventually?
  • nipper
    LOL @ Inactive.....What about the banks taking our money without our authority!!!
  • jim
    stay within your limit simple for occasions when bank error or fraud has caused this then payout is of course expected and should be chased by persons. having worked in banking until the last two years a lot of these charges were refunded by bank staff and yet these will still be claimed back again no doubt
  • The B.
    I'm with Angus, I'm not financially illiterate but some scrote cloned my card and spent £2100 in JJB (is there even anything in JJB costing that much ffs?), so, not only do the bank think I'm a chav but they stiff me for an unauthorised overdraft, I phone them up and report the fraud, they say they'll refund the money and the charges when the fraud documentation has been filled in, they do. The following month, I get a charged for the interest on the overdraft, which they point blank refuse to refund as the overdraft was unauthorised, same old, same old.
  • The S.
    LOOK you fuckin gimp morons, when you opened your accounts, the bank gave you a list of CHARGES you have to pay for going overdrawn without prior authority!!!
  • CompactDstrxion
    Why on Earth are people on here blaming the people who went overdrawn? They weren't the ones doing anything illegal here! If the banks never put these horrifically unfair terms and charges in their contracts then we wouldn't be facing this situation.
  • Elias
    The Spag has it right. They told you what the charges would be (they're in the terms and conditions, nipper, you cretin, you know, that legal document what you agreed to when you opened your account? There's your authority, right there), and those charges have not yet been found unlawful. If your bank didn't refund you in cases of fraud, that's a problem with the bank, not the charges.
  • stephen1976
    nope the banks have just lost two major Court cases, and about to lose the third they are their last leg you you carry on with your dream. that because in the contract its legal. WAKE UP MAN the law does not work that way!
  • stephen1976
    Eilas if you signed a contract when you opened your account, and the terms said the bank manager could walk in your house, slap you, and if he felt like it take your car without your permission, then shot you! Does that mean its legal? Well, using your arguments yes! But thankfully the LAW does not work that way, We have the Unfair terms in Consumer Contracts Regulations, which prevent terms like those mentioned above and terms which the bank's impose on us I.e the charges are unlawful. Once the House of Lords Judgement is received . People will finally start getting back what was taken from them by unlawful means. You see your argument has no standing, you're singing from the same hymn as the banks, I would change your hymn if I was you, because that hymn is going to cost the banks Billions. What is more when the final judgement is out your suddenly find you have been supporting the crooks and assaulting the innocent, not a nice place to be.
  • nick
    problem is when the Banks Lose, and i am not saying they shouldnt as they could prevent everyone going over drawn if they really wanted to, we are all going to get fucked over when they introduce bank charges for having an account. I am not for it as i have looked after my money and made sure i would not go over drawn but i am not against it as they could prevent customers taking out too much money and there for the rather large fines for doing so.
  • bob
    Sounds good to me, Nationalise the whole lot of them. That way every tTom, Dick and Harry knows wtf is going on. with these halfwit bankers, The greed of these banks is something that just isnt on, And even now they are still doing the same practice over and over again.
  • Nikki1972
    Some people dont actually go overdrawn, the bank refuse to pay something - because you are on a basic type bank acct (usually because you are low income), you could be pennies short, and they charge you £35 for the letter to tell you they couldnt pay it. Maybe your wages were late going in, your ex stopped paying you maintenance, or you split with husband and his wages are no longer going into the family acct and you are waiting to get some income from the state to feed your baby, or your partner died, or lost his job. Lots of things can happen but unfortunately you need to have a bank acct nowadays so hence you cannot escape these contracts you have to sign to get a bank acct. Once you get hit with the charges, these eat into your money the following month and it turns into a vicious circle you cannot get out of. Companies you bounce things with then charge you late payment fees or no longer accept monthly direct debits and instead install extortionate card meters or demand quaterly payments or payment by another method. Council tax add about 10% charge onto your annual bill and demand payment in full. Dont tar everyone with the same brush, some people struggle to survive on benefits or low incomes in this country which I understand people in higher income areas\secure family units just cannot comprehend. these payouts could help people climb out of the hole they currently find themselves in and get some dignity back.
  • Tony1968
    Why should bank charges be subsidised by a few people who may go overdrawn by a few pence now and again, why should you not pay for the banking service that you use? Bottom line is that banks have been ripping these people off - fact. This has been proved in the courts since the banks have already lost two court cases - fact. Terms and conditions that I signed up to in 1984 when I opened my account are unrecognisable from the T&C's now in force. The banks change them continually and let's face it they're all the same anyway so what's the point in moving between them? The fat cat bosses have been remunerated handsomely in the form of huge bonuses and have systematically rinsed our bank accounts to pay for them. They are nothing more than criminals and should be brought to justice. You obviously do not need to wear a hoodie to rob someone...........hope they get what they deserve.
  • Sparkly
    Picture this- you park your car at the side of the road in a designated parking bay. You come back 30 mins later to a parking ticket. It turns out your back tyres are over the line by 5 mm. You dont like the fact that you have been fined but have no choice but to pay it, its the law. You later find out that the lines on the parking bay you had parked in were actually marked up incorrectly and the space was 20 cms shorter than it should have been. Therfore if it had been marked up correctly your tyres would not have been over the line and you would not have had to pay the hefty parking fine. Do you ask for a refund on the fine you paid because the person who marked the lines made a mistake or do you leave it? Afterall you knew the terms and conditions of parking when you parked and your car was theorectically 5 mm over the line. When people sign up to a bank account there is a huge element of trust involved. Yes there are terms and conditions but we belived that the terms and conditions were fair and lawful. If the banks are found to be fair and lawful so be it. But if they are found to have taken advantage of a situation in order to unlawfully profit they should rectify the mistake. As for your comments regarding banks going into crisis again if made to refund the charges, if you do your homework you will find that ever since the issue was first raised the banks involved have been putting money to one side to use in the event that they lose the case. One bank was even said to have told a number of its employees that they will drag the case out as long as possible in order to raise the most amount of funds possible before the payout. If banks win the case do you think they will turn around and say lets reinvest this money we have been saving for a payout in the economy to help get us through this recession by givng customers better banking and higher rates. No. It will go towards making banks bigger profits and no doubt a very expensive champagne lunch to celebrate. If anything it would help the UK economy more if the banks did lose as instead if the money being invested for profit by banks the money reclaimed is likely to be spent in shops or put towards reducing individuals debt.
  • Nicos
    If I go to a cash machine and try and get money out and my account hasn't got enough in it, the bank sometimes refuses, though it doesn't charge me. If a company try's to get money out of my account via a direct debit and there is not enough funds, the bank refuses the direct debit and charges me £35. The back end process is the same as the ATM. When was the last time a company (apart from a bank) charged you for not providing something? The banks could quite easily not allow people to go overdrawn, however they want people to go overdrawn. That way then can charge crazy fees and crazy interest. Banking is not 'free' at the moment, this is bank 'spin', you for go the interest on a current account as payment for the account. In Ireland, HSBC charges £3 for going overdrawn, the banks used to say the charge covered admistration costs (as you can see, thats bull), they've given up this argument now and have resorted to threats like - we will have to start charging for current accounts if we lose. They already are!!!
  • Ian
    This doesn't come down to people mis-managing their fanancial affair's, it come's down to banks having the authority to peanalise you and in turn fine you. If not one person in the world went over their agreed over draht limit this would still be a out rage. Fining people is a punishment that only the law is able to use, ie. Speed camera's'/court issue's etc. The banks are not the law, and are not above the law. Bank fine's and penaltys are so seriously against the law that the people responsible for implementing them should be in serious trouble, not just simply paying back the money. No body has the right to take your money against your will and this is just what it is. Surely if you have £0 in your account then nothing can go in or out and that's that. If any of the courts rule in favour of the banks then where does it end? Bigger fines? Being charged for every time you use to much credit on your phone? Im sure other companies will abuse this if nothing happens. Its a joke that whilst the OFT have put the ban on claims the banks are still stinging people for hundreds of pounds a month. Yes, people should be in better control of their finances but if you have just lost your job, you are off work with a serious illness, have a new child etc it is very hard to make ends meet and once that first £35 charge has gone from your account its a difficult circle to get out off
  • rob
    It really does make me laugh when high horse zombies come on websites like this and start banging on about "dont go overdrawn" "read the terms" and all the other motos that the moral sheep seem to quote BAAAAAA !!!!! , have a fucking word with yourself and think about whos in the wrong or actually lets look at it like this , why have you got free banking (if you can call it that) because the banks keep screwing people over with charges , if anyones going to moan it should be people getting charged , why should they pay for your free banking , you are the ones who are scrounging off us , if everyone kept in their limits they would have to abolish free bank anyway so really you should be thanking anyone who gets charged as they are the one who keeping our "free banking system" going.
  • Loopee
    Here here nikki1972! My husband walked out on his family, took everything, it was the summer hols and no childminder available. He cancelled all the bills in his name and put them over to mine. It took 6 weeks for my claim to benefits to go through and when it did we had about £40 to live on. When I could get out to work they stopped the benefits and I had to wait to get paid. All this time my bills were mounting up and I was getting charged late payment fees by utility companies, even when I checked my account everyday to ensure there were enough pennies to pay bills due out, my online banking info was not up todate and I'd be a few pennies short of what I needed so the bank would return the D/D or S/O and charge me. Even when I ask for a small OD to cover the bills they refuse because they know they can charge me excess. You get into a viscious circle and the costs spiral out of control, and not only have I lost the bank charges in my income but then have to find the money to pay the original bill! I asked the bank at one point to close all my D/D and S/O which they didnt and it snowballed leaving me with £1500 in bank charges over a couple of months. It's now been two years since the bastard left and i'm STILL trying to put finances right. The bank played the biggest part in all my financial problems, my families unfortune circumstances have added to their pockets. I even got charged £30 because a charity D/D that I paid to monthly was retunred! DISGUSTING! We're on a small income and rely on every penny.
  • small f.
    Financially illiterate? No money don't go over limit? What a bunch of tossers you lot are. My bank paid out a DD for £10 taking me into the red and then charging me £20 per day for the privilege. Anyone can have an oversight like that except those that have fat buffers on their accounts. I didn't ask for the payment to go out, in Europe that payment would simply not have been made, just like a credit card would be declined in a shop when you have insufficient funds. The banks are disgusting and even more disgusting are the brown noses commenting in favour of the banks. You're so far up the fat cat's arses you can't even see the world around you.
  • Banks B.
    [...] we reported recently, the banks’ tactics have shifted away from arguing their legal position on the charges themselves [...]
  • royal m.
    shut the fuck up you sad clowns weeping about banks paying back money they shouldnt have taken in the first place. all those whinging about us common folk taking back what's our must be bankers(wankers) or fat cats themselves who conveniently have forgotton where their profits and ridiculously high wages come from in the first place....oh yes the peasents. fuck the banks and any twat that backs them. i hope the big foriegn banks that are lending to lower income households these days piss all over the 'big' four when the house of cards falls.
  • How L.
    This is the beginning of my Internet Life. I have reitred from the grind. There are a lot of topics on the Internet and I am reading on many of those and commenting. I don't understand everything that is in all the blogs that I read, but I like your presentation here in this blog. Well you know I have my own blog and website now. It is fun, to be sure. My email and site are included with this post. Is this acceptable? I hope this is allright. TheVeryBest2You 13 3

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