They target low income families (perhaps, as these are the ones most likely to go use it, but are they to be absolved of all responsibility for their voluntary decisions?) So lets go back to a cash society you appear to suggest (be sensible, electronic payments are here to stay and have made life for the majority far easier) Direct debits are to blame (people incapable of keep track of what they have arranged on DD are they?) It all this government's fault (why the government at all and indeed why this government that has just introduced, and parliament passed, greater controls on credit in the new Consumer Credit Act?)

George, My original intention was to come on for a legal debate, because the law is a fascinating beast. I try to be dispassionate about it, this should not be interpreted as meaning that I agree at all times with its consequences. I have never said that I agree with the Banks' methods of operating or the levels of profit that are made, but do recognise the service they provide and value it. The main point I have made in many posts is that some people have a clear difficulty in managing their finances. This is not a novel view, but one recognised in this country for many years. There are indeed many people who find themselves in a difficult situation, but it is difficult to deny that there are many who have been reckless with their own situation and are merely grabbing at an opportunity to gain some "free cash". I think it is fair to say that they will not use this cash to help themselves out of the situation and regain a bit of self-respect, the most important commodity for getting through our short lives. Listening to contrary views helps us to refine our own and take a step back from our emotional attachment to them. I believe this is very important, espcially when we have a legal system in which objectivity is an important interpretative tool. Judges may try to interpret the law to arrive at a sensible and fair result, but that is not always possible. Where an interpretation provides a result deemed unfair by the many, then it is our legislators job to correct it, if that is what the majority (itself controversial) in our democracy desires. It does not mean that our judges themselves agree with the result they arrive at, rather that they are acting objectively to interpret what our elected representatives have decided to put into law. At times they expressly disagree with the result that our law provides, but it is not their job to change it. I have a pension fund and so no doubt have an interest in the performance of the banks, as they will to some extent provide for my future, and perhaps yours and many others on this site.

Well Bookworm, I do indeed sympathise with your situation and perhaps was harsh in my final paragraph, the result of a bad mood I am afraid. Apologies for that. My general point remains as stated though and I look forward to JonCris' story from high ground. Church is a place for those with faith in the ethereal; I prefer humanity.

The levels of sanctimony are rising in the west. Once again vital spark, you suggest I "tar everyone with the same brush". One person on this forum has recently stated that they wish to be paid by cheque as they still owe money to the bank and if the cash is paid into their account it will merely go to repay their debt. Deary me, what a disgraceful way for the bank to act. How dare they think they have a right to be repaid the money they have allowed this person to spend. Money that, had this person been in control of their finances, they would not have spent. People seeking charges back only to allow them to go on holiday or spend spend spend on luxuries, not, as should be the case, to allow them to gain control of their finances to prevent them having to worry about bank charges in the future. This is the level of irresponsibility that leads these people into this situation and they are incapable of changing their ways. People get into difficult situations through a change in circumstances, but then have to face the fact that they have to adapt their lives to accord for the changed situation they now face. Not easy perhaps, as we are very much creatures of habit, but necessary all the same. You really need to be a little more objective people. I do not tar everyone with the same brush and have recognised time and again here that for some the current system is exploitative. That does not mean that everyone here is in a virtuous position. Quite the contrary. Of course, we "freeloaders" do pay and always have paid for our banking, in the rules which allow banks to retain a small fraction of our deposits and invest the rest. The point is that the profits which the banks now make on charges will, if lost in this form, be found from another. Not a defence of their action, but rather a practical consequence of the reclaiming of bank charges. I cannot help wondering why people who feel this way do not simply go back to holding their cash under the mattress and pay for things in cash. Bank charges will be a thing of the past, but perhaps then you will realise that the banks are providing a service, and to do so employ a large number of people, who need paid. Their wages come from the profits made. Boookworm, 7 differnt claims and you shout from the rafters about the conduct of others. How did you manage to get yourself into such a mess? Perhaps you should reflect on your own level of financial indiscipline. And by the way, I am into people, and do and will continue to eat animals smaller and more vulnerable then me.

Loan sharks as that term is understood tend to have exorbitant rates of interest way beyind that which the banks actually charge. You are talking 1200%. Loan sharks are taking advantage of people who are unable to afford credit because they, often, have had bad experiences with credit in the past. For this reason they cannot access the sources open to the majority, banks. These people often find they cannot keep making the payments and it is at this point that the figures get funny, although even with the regular payers it is pretty steep price for borrowing. I feel for people who believe they have to use the services of such lenders, but cannot help thinking proper education both in school and, more importantly, in the home would mean that such people had no market for their services. This is a utopian view perhaps, but a goal worth working towards. If people are thinking about using one of these lenders, they really ought to seek the free advice available from CAB. It will be able to show people case studies of what can happen when it goes wrong, or even right. Once people see these figures most, although admittedly not all, will be able to put their desired purchase in perspective I would think. Of course, there are provisions in consumer legislation which allow for exorbitant credit agreements to be challenged, although these would not cover the kind of interest rates and structures applied by banks. These guys are in a different league altogether.

Nothing to prevent you rasing the action in England and therefore using the MCOL service. However, should you require to go to court, which is always possible, even if for a preliminary hearing, you will have to either instruct solicitors/representative, or take a trip yourself.

The sheriff courts are not known for their consistency. Much depends on the sheriff you get. This may go for you, but perhaps not. If you are claming on account X and you owe them money on account X, they have a right to make a counterclaim against you. Depending on the amount you owe, there is a possibility that they could seek to have the case remitted to the ordinary cause roll. There is no limit on the expenses here as there is for the small claims route, although it is always possible to ask to have the other party's expenses "taxed" to ensure that an unsuccessful party is not paying over the top for expensive lawyers used by the Banks. It may be the case that if you owe them money on any account, they could still counterclaim, although I would have to refresh my memory of the rules on this area. You appear determined, I only hope this does not turn out to be a bad experience for you.

Unicorn, Maximum amount of expenses in a small claim is £75, so not £200. Couldn't help but notice that you appear to have been paid though, albeit in a manner you did not wish. You appear to be in prime lawyer's territory. If you owe the bank money have you considered the fact that they may raise a counterclaim against you on Thursday? Whether it is worth it might depend on how much you owe on the account.

Robertxc, Nice to hear from you again, but I am not sure how that answers the question. If the Banks are not allowed to average it out, then there has to be an argument why not. This piece of judicial opinion does not say that. It simply states that there is a rebuttable presumption of fact about lump sum compensation provisions following on from certain events. It says nothing about the way in which an organisation can organise its debt recovery. I am not denying the proposition, merely interested to know how it would be supported.

They will not be able to credit your accounts if they have been closed though?

Yakobb You say: " In other words, the charges on your account (in part, it is admitted by FG) go to subsidise RBSs global debt recovery losses. They are not allowed to do this. I am fairly sure under the law they are only allowed to charge you the losses that YOUR conduct causes them, which are negligible." This is an interesting point, but what makes you sure that they are not allowed to do this?

JonCris, From an objective standpoint, the reason people get into debt is easy: they are spending money they do not have. Try telling that to the kids I hear you say. As a kid it was kind of obvious to me that money did not grow on trees, and as an adult I am eternally grateful for seeing a bit of financial discipline while I was growing up. Learning certain lessons can be difficult at the time, but with hindsight we see their worth. As to my understanding, it is heartbreaking to be involved in evicting families from properties because they are unable to pay the rent. But appalling to see that they have plasma tellies and every gadget and game in the boxes they leave the house with. Who is at fault here? Yes people can get into debt through a change in circumstances. It is unfortunate that you have highlighted certain of my thoughts without accepting that they are not absolutes. They are tempered with an understanding of how easy it is to fall into the trap of debt financing debt. The people on these boards who have found themselves in this situation have my utmost sympathy and if the Banks are indeed targetting these people, then it is morally satisfying that they have an opportunity to strike back. Your comment about tax breaks is interesting, although as while companies can write off bad debts against their 30% tax liability on profits, I am sure they would rather have the 100% of the debt repaid and pay the tax on the profit made. Simple capitalist economics...what makes more profit. Your point about the influence of judgements in both jurisdictions is well made, but if you read my post with care you will see that I said exactly the same thing. In this area, however, we have a Scottish statute and Scottish principles. The differences need not be great, but manys a case won and lost on a nuance. My position, and profession, allows me to look at both sides of an argument. The Banks perform a very valuable function in all our lives. No longer do we have to pay the gas man as he comes round our house, the Bank does it for us, sometimes, it seems, with their own money. Through credit cards and bank accounts we have access to multifarious products and services to enhance our lives. Through personal loans we can buy now and pay later, but we must pay, or other borrowers will. I do not have your subjective anger, so perhaps I can afford to be a little more objective. I am, however, delighted you managed to succeed in your quest for educational achievement. We appreciate things more when we have to struggle for them don't you think?

If they are closed, how could they put money in them?

Presumably, though, as you are not using these accounts, you will now be in credit and so can simply withdraw the money?

In order to be able to claim contractual interest, you must in the first instance have right under the contract to interest. in terms of your contract, you are only entitled to interest when ou are in credit. When overdrawn, the Banks have the contractual right to charge you interest. Second, you would have to point to a term of the contract that has been breached by the Bank. I am interested to know which term it is that you believe you can point in support of the argument that the Bank are in breach of contract. It seems to me that, on the contrary, they have applied the terms of the contracts between themselves and the consumer strictly in accordance with its terms notified to the consumer in the terms and conditions. There can be no breach of contract. Your remedy here lies, if at all, on other legal grounds.

JonCris, The Limitation Act is, of course, an English Statute. We have our own legal system up here which, while similar and often influenced by yours, is based on principles and not, as in England, remedies. Not only do we have separate legislation on this matter, our judges approach problems in different ways. I confess it irritates me when people fail to make the distinction and seek to spread "knowledge of the law", which does not apply in this jurisdiction. It is misleading for people. If you are someone who has managed to get a bank to settle beyond the Limitation period in England and Wales (6 years), congratulations to you. However, this does not necessarily imply that the law in relation to the postponement of the beginning of limitation period is in your favour. The reasons for not fighting such claims could be multifarious, and may indeed least of all be that the Banks consider the law to be on the side of the consumer. One extrajudicial settlement does not mean the law is on your side. We are overtaxed and need to borrow you say. I would be interested to hear what all this borrowing is required for, although I sense that you are saying it is all the banks' faulty for entering into commercial arrnagements with a view to securing profit from the consumer. If this is abhorent, stand for election on a platform for change. Fact is, we are all better off in terms of meeting basic needs than at any other point in our history, yet we have more than twice the levels of consumer debt than in any other country in the EU. Personal sequestrations/bankruptcy is at an all time high. Whose fault is this, Sky tv for making such an irresistible if not indispensable product? People are living beyond their means, it is essential that this is recognised if people are to be proactive about dealing with their levels of debt. Life in our society is not about fairness, it is about survival first and foremost. BTW been unemployed, been a student, I was always overdrawn, but never charged. It can be done.

JonCris, The Limitation Act is, of course, an English Statute. We have our own legal system up here which, while similar and often influenced by yours, is based on principles and not, as in England, remedies. Not only do we have separate legislation on this matter, our judges approach problems in different ways. I confess it irritates me when people fail to make the distinction and seek to spread "knowledge of the law", which does not apply in this jurisdiction. It is misleading for people. If you are someone who has managed to get a bank to settle beyond the Limitation period in England and Wales (6 years), congratulations to you. However, this does not necessarily imply that the law in relation to the postponement of the beginning of limitation period is in your favour. The reasons for not fighting such claims could be multifarious, and may indeed least of all be that the Banks consider the law to be on the side of the consumer. One extrajudicial settlement does not mean the law is on your side. We are overtaxed and need to borrow you say. I would be interested to hear what all this borrowing is required for, although I sense that you are saying it is all the banks' faulty for entering into commercial arrnagements with a view to securing profit from the consumer. If this is abhorent, stand for election on a platform for change. Fact is, we are all better off in terms of meeting basic needs than at any other point in our history, yet we have more than twice the levels of consumer debt than in any other country in the EU. Personal sequestrations/bankruptcy is at an all time high. Whose fault is this, Sky tv for making such an irresistible if not indispensable product? People are living beyond their means, it is essential that this is recognised if people are to be proactive about dealing with their levels of debt. Life in our society is not about fairness, it is about survival first and foremost. BTW been unemployed, been a student, I was always overdrawn, but never charged. It can be done.

Robertxc, Consumer debt in the UK is estimated at £1,000,000,000,000. Bank charges make up only a fraction of that. I do not take you to seriously suggest eliminating Bank charges will rid us of this difficult situation. I know people with £30k on credit cards. Do you believe the banks are responsible for this?

Interested to know what your legal basis is for asking for compound interest (contractual). Your contract with the bank does not allow you compound interest and, at least in Scotland, compound interest has only ever been allowed in a miniscule number of situations?

Thanks for that George, Indeed, the charges may have been subsidising my free banking and if so, then I cannot support that. Obscene profits and fatcats salaries are again not something I will argue for, although profit and executive salary are necessary at some level to ensure our system operates. whether that is the best system is a long running political debate, and one which I am surprisingly perhaps on the left rather than right. You will note that I have accepted the situation of SOME is CAUSED by the banks' charges. However, the plain fact in our society is that some people are living beyond their means and must evaluate what really is important in their lives. We have more consumer debt per head of population than anywhere else in Europe and while the financial institutions have encouraged this, I cannot accept that they are entirely at fault. Our society provides choices and people must accept responsibility for the financial decisions they take. Perhaps spending more time with the kids rather than buying them the latest attention distracter would be cheaper and generally better for our society's welfare in the long run? I must reiterate my point when you say they have had it coming. It will not be profits that suffer, but other consumers and whether right or wrong, they will feel aggreived that they are to suffer because of the acts of others and people should be conscious that their actions in claiming back charges are not without consequence for many innocents.

Vital Spark, The guarantee system is in place for the benefit of the third party receiving the cheque and not for the customer, who is still required to ensure they have sufficient money in their account to meet the payment when the cheque is presented. I think you are reinforcing my argument that individuals are not always exercising personal responsibility in these matters. It has been argued that by writing a cheque in circumstances where the customer knows they do not have sufficient money in their account amounts to a knowing false pretence in order to secure a gain. Sounds very much like fraud, albeit not yet declared to be so. You appear to make assumptions about my personal status which are not founded on fact. I am well aware of what it is like living in a household where meeting the monthly bills is a problem. I remember well the icicles on the inside of my windows. My family simply did what they had to do in order to live within their means. This has caused a lifelong aversion to eggs, amongst other things! I paid my own way to get to where I am and worked throughout my entire period of education. My point regarding alanfromderby was simply that. Of course people have problems, but part of our difficulty in this society is tht people thing they deserve to have big tellys, sky dishes, playstations, trendy clothes, tesco finest, foreign holidays. If you cannot afford it, then you surely you should not be spending on these things and if you need more money to fund your lifestyle, then perhaps you need to work towards putting yourself in a position to do so. It is within all our capabilities to be a lawyer, doctor or entreprenuer, although it is very hard work and takes a great deal of deterimination, particularly where you are not blessed with parents who will pay for all the books and other materials you require and subsidise your lifestyle to allow you to study.

Robertxc, I do not disagree with your analysis of the term "unauthorised borrowing", although I must say I am not sure of the mechanics of how the banks process these payments. What about the cheque guarantee system though, is that not unauthorised. I understand the banks are required to make the payment and thus are not accepting inthe true unfettered sense required for entering into contractual relationships. As for the quote, fact is you can be pretty certain about much of the law currently governing our lives, certainly in the area of regulatory control through criminal penalties and fines. In the commercial sphere, however, things are different and as we have a system which often relies on precedents set down and interpretation given in a different age, it is quite proper that judges are able to reflect on the suitability of a legal rule to govern a completely different society from that which existed at the time of the case in question. Makes it difficult for laypersons to know when a case is ripe for challenge, but then that is what lawyers are for, and not a bad thing too (at least for some of us!). I do have to ask, however, how AlanfromDerby managed to amass so many bank and building society charges. That is an annual salary!

Eubo, There are two limits, 5 years and 20. The starting date for the five year limit can be postponed in certain circumstances such as where the claimant was not aware and could not with reasonable diligence have become aware of their right to enforce an obligation on another. The twenty year limit applies irrespective of knowledge, i.e. it cannot be postponed. In most cases the five year limit will apply, and in those cases where the puruser could have pled the postponement of the five year period, their claim will prescribe in twenty years regardless of whether they knew or could have known etc. It is confusing, I know, but five years does apply in these cases.

Vitalspark, First off, our legal system is primarily set up to defned people's proprietary rights, not to defend the vulnerable in society. There are many laws which do have that latter aim, but the considerations underlying them are often as much to do with maintaining the primary prorietary concern as they are with giving the disadvantaged a help up in certain circumstances. I agree that some people will find it more difficult to deal with their financial situation than others and this is perhaps something which is beyond their physical and/or mental capabilities. Discretion should be the order of play in such circumstances and this is not always wisely exercised by large financial institutions. If people are suffering from real disabilities, then perhaps the Banks have a duty under the Disability Discrimination legislation to take measures in order to make it easier for such people to access and use their services. However, there are a great many stories on these boards which do not appear to fit into the categories that you describe. These are instances of quite simply innapproriate spending, assisted by the banks' overgenerous, and ultimately profit driven, lending policies. Therefore the majority on these boards are, I would guess, not in the situations you discuss, although I agree there are some who are and they deserve this to be recognised and approriate assistance given. I further agree that these people and their difficulties are not always fully recognised by our financial institutions. However, our economic system is based on competition and, to a large degree, survival of the fitest. That may seem unfair, but that is the present system...until the revolution perhaps?

Ropey, This is "the law" and, unfortunately, all that I can give is a considered opinion. Only our judges can state what the law is, the rest of us simply argue how to interpret words and phrases used in Acts of the Parliaments and the real application of a particular judge's judicial reasoning in a particular case. There is an argument that the charges are unlawful, and indeed many lawyers have said as much in the press. This may succeed, but likewise, there will be an argument for the Banks as well and only our judges can make the determination of what the law is and whether the factual circusmances surrounding the application of bank charges falls foul of their interpretation of the law in this area. Typical legal answer I hear you say, but there is no such thing as being 100% certain of the law applying in a particular case. The facts will determine. For example, A stabs B outside the pub and B dies. This is murder is it not? Well maybe is the lawyer's reply. The circumstances may show that it was actually self-defence, or that it was an assault provoked by another. It may be the accused was acting under some mental incapacity which could excuse his actions, it may be that he was medically insane, in which case he is not responsible for his actions. I have never said the charges were lawful and could not without more information. I suspect they may not meet the legal test for fairness and legality, but cannot state that with any certainty and could not argue it without first knowing the other side's response. That response is difficult to know without a real legal debate before the judges in the supreme, rather than small claims, courts. At present this is unlikely to happen. This thread started as a discussion about prescription, which is a fascinating area of the law. I have a mate who has been repaid by a bank and he told me about this site, I popped along and saw an opportunity to clarify an understandable confusion over the limit that applies in such cases. You may not want to agree with it and indeed I would never expect you to rely on it, that is why you have high street lawyers, but it is an honest opinion based on my research.