OFT test case

[nobodys fool]

 

My feeling is that each and every bank has changed their terms and conditions in some way or another, in an effort to dilute what may be coming and cover their backs. I sincerely hope that this goes the OFTs way and am trying to follow the case in the media (sometimes tricky, as there's plenty of mis-information around).

 

Which actually means even if the attempts by the banks to have current and future "charges" seen as not being penalties; it doesn't set a precedent in relation to earlier fees that were imposed under older, even more blatant terms and conditions.

 

No matter how they try to reword it, the substance is still the same...however they're trying to move it to greyer areas via legal "shenanigans" - in some old terms and conditions it was black and white... The terms being an agreement to manage the account within agreed parameters... the response to failure to do so being penalties and threats to close accounts.

 

The banks may deny having records of these old terms... if all record of such terms has disappeared it would seem to be extremely "convenient" and have the appearance of a deliberate attempt to conceal evidence from customers and the courts... but on the flip side it could potentially make debts incurred under old terms unenforceable... after all without the terms and conditions where's the proof of the substance of the contract?

[nobodys fool]

Just tried asking a supervisor at LLoyds TSb What the diference between a bank account and a credit card charge is.

 

He could not get passed the standard defence.

 

Whats going on i don't remember being that stupid when i worked in northern rock.

 

 

They're being told to tow a party line to avoid weakening their case further...

 

I recall a member of Halifax several years ago when pressed on penalty charges stating "its to stop you doing that"... which seems like a blatant admission that its a penalty and not a "charge for a service" to me...

 

In the current climate such a statement from bank staff would be suicide for the banks case...

[JOSH_IOU]

I asked him what a penalty charge was.

 

He said it was a charge for going overdrawn.

[nobodys fool]

Can somebody tell me why the "it'll mean we'll have to start charging for accounts" argument is even being heard...

 

What relevance does that have to the legality of the current penalty charge method?

 

That would be a commercial decision of the banks if its current business model exploiting a certain element fell apart... its a potential knock on effect, but I fail to understand how such speculation about the impact of an (from their perspective) adverse judgement has any bearing whatsoever as a legal argument.

[nobodys fool]

I asked him what a penalty charge was.

 

He said it was a charge for going overdrawn.

 

If only you had that recorded... its practically an admission

[dave]

I still don't understand this 'floor limit' thing.

 

If I try to buy something (or when I actually had a debit card) for £10 and I only had £9 in the bank, the transaction would have been declined. It's happened. Using my debit card anywhere has never been allowed to take me over my limit, so I don't understand why each retailer would need to phone the bank to check the balance, when clearly it's doing this already electronically.

[pford]

I still don't understand this 'floor limit' thing.

 

If I try to buy something (or when I actually had a debit card) for £10 and I only had £9 in the bank, the transaction would have been declined. It's happened. Using my debit card anywhere has never been allowed to take me over my limit, so I don't understand why each retailer would need to phone the bank to check the balance, when clearly it's doing this already electronically.

 

As i understand it most shops set a limit before they need to phone the bank to get the balance of your account

 

floor limit = 0 phone the bank

floor limit = 10 no need to phone bank if you spent less than this

[nobodys fool]

As far as I'm aware the electronic checking actually goes through a couple of 3rd party processors who check against the bank...

 

Not all debit cards check every transaction (or at least they didn't) but "online" ones do...

There is no reason that all debit cards couldn't operate this way.

 

As far as I'm aware Solo & Visa Electron cards are 100% online and check every transaction...

Other cards may not check as often.. or update balances as quickly...

[Justforfun]

And there's more

 

on 29th August 2006 the balance of your account was £33.81, which you intended to cover a £28.00 charge, However our collections Department transferred £33.80 to reduce your outstanding personal loan arrears. the "28.00 charge was debited taking your account £28.09 overdrawn. as the debit balance was caused by a charge, no further charges were incured..

[nobodys fool]

"We have always believed that what we are doing is correct and legal," said a spokeswoman for the British Bankers' Association (BBA).

 

Getting the defence in early against potential theft charges???

 

[HONESTKNOB]

What about Lloyds 'trap' of allowing you to go £50 over your account limit and then hammering you with charges when you do. It doesn't matter what you have in your account or how much the floor limit is. I've had £80 in my account before and spent £110 in Asda and it goes through no problem. I nice little earner for Lloyds though. If they declined the transaction as soon as you got to your limit they'd never make all their lovely charges!

[johnnyjoeflyer]

I still don't understand this 'floor limit' thing.

 

If I try to buy something (or when I actually had a debit card) for £10 and I only had £9 in the bank, the transaction would have been declined. It's happened. Using my debit card anywhere has never been allowed to take me over my limit, so I don't understand why each retailer would need to phone the bank to check the balance, when clearly it's doing this already electronically.

 

Funnily enough I picked up on this yesterday and emailed OFT to point out that RBS barrister was incorrect and misleading on this and used similar explanation to yours.

 

Awaiting to hear back from them.

The banks even now are attempting to deceive and manipulate the situation and I really do hope that OFT continue to come back hard on them. This highlights exactly how banks and the banking industry works, why not just rely on the facts to put their case rather than mislead.

[Viano]

As I remember it a 'floor limit' is a limit imposed by the credit card company on the trading company -the shop, garage etc- based on an average purchase. It is supposed to protect both the trader and the card company from fraud !!!!

 

Viano

[HONESTKNOB]

I even wrote to Lloyds and asked them to remove the £50 'buffer' off my account as I didn't want to incur any more charges. Never got a reply and the 'buffer' is still there

[mailmannz]

Surely lying in court is purgery?

 

Well to be honest, if you strip all the emotion away what the guy is saying is essentially correct from the banks point of view (hahaha). So he isnt telling fibs at all, jus telling it like it is from their pov!

 

Having said that, setting all cards "floor limits" to zero would negate this arguement anyways!

 

The other thing is this...if the banks could make more money from "authoriosed" overdrafts, do you reckon they would keep allowing people going for "unauthorised" overdrafts or do you reckon they would push everyone in to having an "authorised" overdraft???

 

Regards

 

Mailman

[dave]

If I go to a supermarket and pay for something for which I do not have the funds in my account for, and thus taking me overdrawn, then the bank have authorised that overdraft. There can be no such thing as an unauthorised overdraft.

 

Incidently, this has never happened to me - if I have tried to pay for something and haven't had the funds, the transaction has ALWAYS been declined.

[JOSH_IOU]

If I go to a supermarket and pay for something for which I do not have the funds in my account for, and thus taking me overdrawn, then the bank have authorised that overdraft. There can be no such thing as an unauthorised overdraft.

 

Incidently, this has never happened to me - if I have tried to pay for something and haven't had the funds, the transaction has ALWAYS been declined.

 

 

Yup I think i know why you were thrown out of that meeting lol good on ya.

[mailmannz]

Dave,

 

I think you are splitting heres hair

 

If you dont already have an overdraft arrangement with your bank in place and you spend money you dont have in your account, thus taking you in to the red then there is no way you can consider that an "authorised" overdraft.

 

Just because they let you do something, doesnt necesarilly mean its ok. Just as in just because your cat lets you kick it doesnt automatically make kicking your cat right.

 

However the simple solution here is to NOT let people draw money out they dont have in their accounts! Its not rocket science BUT I guarantee you the banks wont make any money out of that!

 

Mailman

[Gez]

Dave,

 

I think you are splitting heres hair

 

If you dont already have an overdraft arrangement with your bank in place and you spend money you dont have in your account, thus taking you in to the red then there is no way you can consider that an "authorised" overdraft.

 

Just because they let you do something, doesnt necesarilly mean its ok. Just as in just because your cat lets you kick it doesnt automatically make kicking your cat right.

 

However the simple solution here is to NOT let people draw money out they dont have in their accounts! Its not rocket science BUT I guarantee you the banks wont make any money out of that!

 

Mailman

 

That analogy doesn't really relate properly to the authorised/unauthorised argument. It is not a question of whether or not it is "ok" to attempt to spend money you don't have, it is to establish if such a thing as an unauthorised overdraft can even exist. IMO it can't. If it is unauthorised, then it should not be paid. If it is paid, then it is authorised & interest should stay at the same rate..

[Justforfun]

But the most insulting of them all is

 

I have noticed your comments regarding funds debited from your benefits, However as stated, the terms and conditions of your bank account confirm where money is overdue for payment on any other account we may take the money you owe us and we can do this without giving you notice

[nobodys fool]

They have however authorised the transaction... and could easily verify whether that puts you in an authorised position or not...

If the position isn't authorise, why allow it to go through...

They are authorising the position but classifying it as something different due to it not being within agreed parameters... not as a service, as a way to make money... its almost deception...

[dave]

...but the magic word here is 'let' - they 'let' me do it, so therefore they have authorised it.

 

The cat analogy isn't a good one - no offense, but I didn't ask the cat first if I could kick it, unlike when you go to pay for something. I have asked the bank if I can pay for this "thing" - they check (or their computers do) my account and see that I haven't got the funds, yet it makes a decision based on who-knows-what, to let me go over the limit (or not).

 

It's either a service or it isn't.

 

I would say it isn't. Also, when the card is declined, I fail to see how this is different from a DD failing.

 

I don't get penalised for attempting to use the card, so why would I for attempting to pay something by DD?

 

Just FYI, it's largely academic for me in any case. I have no debit card, cheque book, or pay anything by DD or SO any more. The only thing left for me to get rid of is the bank itself.

[nobodys fool]

But the most insulting of them all is

 

I have noticed your comments regarding funds debited from your benefits, However as stated, the terms and conditions of your bank account confirm where money is overdue for payment on any other account we may take the money you owe us and we can do this without giving you notice

 

A good argument for having another account, somewhere else, to have benefits paid into

[nobodys fool]

...

 

I would say it isn't. Also, when the card is declined, I fail to see how this is different from a DD failing.

 

I don't get penalised for attempting to use the card, so why would I for attempting to pay something by DD?

 

 

The computer rejects them both... but there's nobody in front of you that you can see robbing you for refusing to do something with a DD unlike if they tried it with rejected card payments.

[think of the chaos in the stores]

 

With a DD its a nice impersonal earner... for refusing to do something...

 

... an interesting "service"!

[Conniff]

Well it's not just the UK and cag any longer:

 

 

 

Bank charges attacked around the world

 

Bank customers in numerous countries around the world have been complaining about the cost of having an account.

The Israeli government has just agreed that the country's central bank should regulate commercial bank charges. In the UK tens of thousands of people have, successfully, been suing their banks for the return of overdraft charges. BBC correspondents report from South Africa, the Czech Republic and Australia about the growing consumer revolt.

 

BBC NEWS | Business | Bank charges attacked around the world