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What do you think of the bank charges verdict?

by Donna Ferguson 25 November 2009 |

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The banks have won the latest case in the battle for outrageous overdraft charges to be refunded. The Supreme Court has ruled that the Office of Fair Trading doesn't have the right to investigate whether the charges are fair. But what do you think? Is this a good or a bad thing? Banks were talking about having to put charges up for responsible customers who don't exceed their overdraft limits because of the lost revenue. Are you worried about what it means for you? If you've already got your money back, are you worried it will be taken away from you?

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59

time2go posted
Justice Prevails??????.....??????
So the OFT are not able to investigate banks, but the government can bail them out with our money at the drop of a hat!!!
Who said the Legal system in this country is not fair?.
The 'Putting charges up' argument was a sham. whenever the banks wants to increase their profit, they introduce a new charge in any event.
Did the Supreme Court have the guts to say WHO/WHAT ORGANISATION has the right to investigate the charges.... Thought not...
Posted on 25 November 2009 | Love 0 loves Report
129

Donna Ferguson posted
We've just published an article looking in-depth at the judgment by the way:
Bank charges: the banks have won!
Posted on 25 November 2009 | Love 0 loves Report
85

ckm4328 posted
Personally I think this is a brilliant result.
Don't get me wrong I hate the banks as much as the next guy.
But look at it this way. People entered into a contractual arrangement with the banks and despite their protestations they new the terms of that contract. If you go overdrawn without bothering to pick up the phone and increase your overdraft limit you get charged.
I can believe the idea the first time you got hit with a £25 fee you may not of known about it but by the time you've run up £2000 you must have known.
I also have to agree with the bank that this seems a fair charge for going overdrawn not because of the administration costs but because of the increased risk on that account. If you go into an unauthorised overdraft it shows that you are not managing your finances well and are therefore more likely to default on the whole debt.
Posted on 25 November 2009 | Love 2 loves Report
16

Mister W posted
I agree, it's a great result for those of us who are able to manage our finances. The banks are business so will try and make as much money as they can. If they can't make it from the people who go over their overdraft limits then they'll try to make it from those of us who don't. I know which seems fairer to me.
Posted on 25 November 2009 | Love 2 loves Report
9

ndf9876 posted
Sad, but inevitable. The poor will continue to subsidise free banking. I don't see the issue as whether or not there should be a charge for an unauthorised overdraft - merely the punitive level at which they are currently charged. Is it right to profit from customers who have debt problems? Or looking at it the other way, How would I feel (as a customer who doesn't go over my agreed limit, ever) if I had to start paying for the privilege of having a bank account, because others could not manage their money?
Anyway, refunds already given prior to the judgement were "goodwill gestures" as far as I'm aware and any I can't see the banks trying to claw these back.
Posted on 25 November 2009 | Love 0 loves Report
16

Mister W posted
This is not about being rich or poor, this is about an ability to manage your finances. It's not the poor who subsidise free banking, it's the careless.
Posted on 25 November 2009 | Love 0 loves Report
20

CaptainFlak posted
Disagree (and I haven't incurred any bank charges) it's about if the charges are fair.
Posted on 25 November 2009 | Love 1 love Report
0

joneil posted
Who is to judge what is fair? Banks should be required to publish their tariffs and then customers can blame nobody but themselves if they incur the relelvant charges. It is rather ironic that we complain because the banks offer credit cards too freely allowing innocents to go into debt. And now we are complaining because they penalise people for going into unauthorised debt.
Posted on 26 November 2009 | Love 0 loves Report
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hermanthehulk posted
Excellent verdict , as someone else said it is the careless that get charged , why should people who look after their finances subsidise people who spend money that isn't theirs?
I believe that in France if you overdraw 3 times that the bank closes your account and no other bank will accept you , in the UK they get charged which is fair
Posted on 26 November 2009 | Love 0 loves Report
59

time2go posted
I thought the matter was concluded by deciding that the OFT does not have the right to investigate whether the charges are fair?
It's about having the ability to challenge the banks who (now) have bottomless pockets thanks to the bail out.
The decision was (like many higher court decisions) a complete cop out.
Posted on 26 November 2009 | Love 0 loves Report
0

andis1 posted
well i think its disgusting that they have ruled for the banks when the banks got into trouble we the public have to bail the banks out with our taxes when we got into finacial difficultys with our money e.g. overdrawn by 3.50 & ended up paying a whopping £35 bank charges talk about rob peter to pay paul its always & always will be the working class people that get stung in this country.
Posted on 26 November 2009 | Love 0 loves Report
85

ckm4328 posted
My solution to the whole issue is for banks to refund the first fee they deducted from individual customers on the basis that the charge was not clear.
Any further fees they can keep because the customer knew about them and choose to accept them.
Posted on 26 November 2009 | Love 0 loves Report
0

busa13 posted
i was 50 pence over drawn and halifax charge me 39 pounds for punishment
Posted on 26 November 2009 | Love 0 loves Report
0

Ranger posted
I totally agree with the Supreme Court verdict. If you run up an unauthorised overdraft you are spending someone else's money without their permission. How can it possibly be unfair to charge for this "service". Furthermore, if the ruling had gone against the banks, the result would have been for them to impose fees on everyone to run a current account. Why should people who run their accounts properly (ie only spending their own money) subsidise those who don't?
Posted on 26 November 2009 | Love 0 loves Report
348

Mike10613 posted
Free banking was scrapped years ago and everyone complained and it was quickly reintroduced. If all charges were dropped for unauthorised overdrafts it could mean an end to free banking. I think many charges are unfair and banks operate inefficiently. I make a purchase and the money leaves my account instantly. I pay a bill and sometimes it takes as long as 9 days for the payment to clear. Cheques obviously clear slowly too and there is no sensible reason they should. They can be scanned in the bank branch they are deposited in and cleared in an hour. The interest earned by slowly clearing these items probably helps pay for free banking and so that is in a way fair. it is sometimes ridiculous when like busa13 you go 50p overdrawn and get a hefty penalty for it. I was buying a very expensive computer once and phoned my bank because I needed to go overdrawn by 20p! They told me to ask the computer company to drop the price 20p. I had already negotiated a sizeable discount and the funds that hadn't cleared my account were a cashier's cheque from the building society that was virtually next door. There is a need for common sense but Britain appears to be on a "work to rule" and you need to go on a course these days to change a light bulb and then it has to be low energy.
Posted on 26 November 2009 | Love 0 loves Report
17

poppasmurf posted
The charges are unfair,

I wouldnt mind paying 50 pence for making a mistake.

So which organisation is allowed to investigate whether the charges are fair or unfair then?

We the TAX payer bailed out the banks, so weres our bail out...?
I would have let the banks go under. But theres to much at stake if that happened.
Posted on 26 November 2009 | Love 0 loves Report
20

CaptainFlak posted
I'll say what's fair, if you go overdrawn then the bank should charge you interest at the same rate they are giving you on your money when in credit, surely they can't argue with that, even double would still be fair i.e. in some cases 0.2 percent or in the case of my Halifax account 2x0.0
If they have to send you a letter then charge you for the letter which in these hi tech days is about the cost of the paper, someone (maybe) to stuff the envelope, the envelope and postage - 50p?
Posted on 26 November 2009 | Love 0 loves Report
0

foolandmoney posted
Patently unfair. I come from Holland originally and received a rude surprise when exposed to the British banking system - which is very inefficient, and finds more ways to fleece you than the Dutch system in an unfair manner, though the Dutch system is not cheap in the sense that they manage to make even more money per customer than the British, but do it in a less obtrusive way, and more especially in a fairer way, where the poor do not subsidise the rich.
As far as this whole mythology of free banking, I honestly do not understand how people can see their banking as free, when it so patently obviously is not to most people, and especially not to poorer people. What this country needs is a people's bank where accounts can be run for the people, and not for the bankers. Credit unions can alas not yet fulfill that role. And btw that does not mean I think the other banks should disappear, but that there should be a fair alternative and a bank of last resort for people so that the process of the self-generating bank charges for overdrafts can be stopped, and people can actually recover and not go bankrupt.
Posted on 26 November 2009 | Love 0 loves Report
85

ckm4328 posted
Its free for me. Don't have a lot of money but I know how to keep my finances in order.
The question who should investigate the fairness of these charges. Answer the Courts under the law of contract.
You choose to enter into a contract with the bank and except the terms. The same way I am stuck into a contract with a gym that I don't use every 12 months. There's no one shouting from the rooftops I should be allowed out of my contract.
Posted on 27 November 2009 | Love 0 loves Report
2

Industryknowhow posted
I'm sorry but I really do believe that the the 'end of free banking angle' has been pushed by the banks PR over the last few months, why...
1) If the OFT won this case it would limit the number of new claims
2) If the OFT lost less people would be motivated to seek out other methods of claiming
The OFT lost this case and the general media consensus is 'that is the end for bank charge claims', however this is a consensus pushed by publications that bank with the banks, are part of empires funded by the banks and recieve millions in advertising revenue from the banks....
Many on this site are good at managing their money (as would be expected by a member of this site), however we should not expect banks to make billions out of those who are less able to manage their money, the excuse that it is 'riskier' for them simply does not wash. For example:
1) The bank switches to the use of on-line debit cards i.e. does not take a couple of days for the transaction to process (an offline card). transaction is immediate and could check against the balance.
2) The bank cancels debit cards for those who cannot manage their money (say after 5 missed transactions in 6 months) and provides a pre-pay card or similar.
Both of the above stop the customer overspending on a debit card. As far as bills etc are concerned, No funds, no payment. By all means send a letter to inform the customer that the payment has not been made but charge what it costs (i.e. less than £1).
The point is that no bank will let you go too far overdrawn anyway. They charge extortionate amounts while you are 'low risk' (i.e. just over your overdraft) then refuse to make payments once the risk becomes too high (i.e. starting to significantly exceed any agreed level) while still charging excessively for the privilege
Posted on 27 November 2009 | Love 1 love Report
1

Tight wad Mark posted
I'm absolutely disgusted by how the banks treat their customers.
The banks are now saying that if penalty charges are to be reduced significantly then we shall all have to pay each time we make a withdrawl from our accounts. I do hope that not all banks will follow suit. If one or more banks refuse to charge for withdrawls then they will have many thousands of new customers, as people will simply switch banks.
I don't agree with the courts view that the public agree to the banks terms and conditions when they open their accounts. If you have a job then your employer needs to pay your wages into a bank account. Every bank has high penalty charges, so you simply have no other choice than to agree with the banks conditions anyway.
Posted on 30 November 2009 | Love 1 love Report