A little "heads up"

[rubisco]

Just a little heads up about some banks that have started to change their terms and conditions.

When someone engages in unauthorised borrowing, this represents a breach of contract. When this happens, the injured party (the banks) are entitled to recover the costs incurred to them as a result of the breach. However, it is unlawful for them to charge more than the costs they incur and make a profit from these charges. This is the legal basis of all of the claims against the banks.

What many banks (including Lloyds TSB and HSBC) have now done is to change their terms and conditions so that unplanned overdrafts are within the terms of the contracts with their current account customers. Therefore, the fees they charge for these are no longer penalty charges for breach of contract and are therefore perfectly legal.

Whether you think these fees are fair or morally justifiable, they will now stand up in court. The banks are beginning to close the loopholes in their terms and conditions which have allowed so many people to get back their charges.

Basically what I’m trying to get across is that people who habitually go over their overdraft limits can’t rely on getting these charges back in the future. If you are at risk of incurring these charges, you need to do one of two things to avoid these charges:

a) Manage your finances very closely so that you don’t go into an unplanned overdraft or

b) Close your current account and open a basic account that does not have any credit facilities attached

[Lula]

most of them changed this last year

[indebtstudent]

Well done your post was more balanced than most of the 'manage your money better brigade' but point B above is flawed. I have seen many cases of people WITH basic accounts being hit with charges.

 

This is the point I make over and over again much of the money which people dispute is to do with transactions which were not paid. That is to say they didn't cost the bank anything of note.

 

The courts are accustomed to this kind of tactic to disguise penalties, they even have a name for it - cloaking. If the circumstances are the same but the wording has changed it would be a very show IMO if a court did not see through this.

 

In any event Nationwide remains steadfast in not changing its T & C's. Somebody has to be wrong.

 

Sorry to undermine your two keys points but I must also say the Citizens Advice Bureau says most debt problems are to do with a sudden change in circumstances.

 

I hope this doesn't sound too harsh but if you work for a bank you should openly declare it rather than claiming to offer some kind of sudden insight.

 

If you are not a banker I am sorry to make such a grave insult!

[rubisco]

I do work for a Bank, yes.

 

At some point bank charges are going to be non-reclaimable. When that happens, people need a contingency so as not to get into serious debt problems. Do I think this sucks? Absolutely.

 

The point I was trying to make is this: at the moment a lot of people are using the fact that they can reclaim charges as a safety net, but this won't last.

[madjj111]

thanks rubisco - nice post with sound advice.

 

If this is what all the banks are doing then its only good news for those who have claimed charges and waiting to hear - the banks are acknowledging they have been caught legally and have found there way out for future cases.

 

I have many friends working for banks but none can shed any light on what the banks are thinking - so agin thanks for that

[Fullycharged]

Hi there - I have a question that I can't seem to find the answer to anywhere on site and yet its quite an important one . . . there seems to be a case pending, the decision of which will confirm whether or not more people can make claims against their banks for unfair charges. Does anyone know how or where I can keep track of this case so that in turn I know when I can make my claim? (if indeed I can)

 

Many thanks in advance for your help

[noomill060]

http://www.consumeractiongroup.co.uk/forum/oft-test-case-updates/135299-oft-case.html

 

The case was heard back in January and the judgement isnt expected until July.

 

It will be for the High Court to decide whether overdraft charges are lawful or not, not the banks themselves.

[noomill060]

You would be advised to start reclaiming your charges now anyway, as when/if the judgement is made, there is going to be an avalanche on top of those claims already in the pipeline!

[Bookworm]

Have I just stepped back in time? :-?

[Fullycharged]

I see - many thanks for that useful information. I will get started then. I only just heard about this believe it or not so I'm still learning and trying to figure it all out.

 

Appreciate your speedy response.

[PGH7447]

Quote "b) Close your current account and open a basic account that does not have any credit facilities attached"

Untrue, you still get hit with charges.

[Gez]

I do work for a Bank, yes.

 

At some point bank charges are going to be non-reclaimable. When that happens, people need a contingency so as not to get into serious debt problems. Do I think this sucks? Absolutely.

 

The point I was trying to make is this: at the moment a lot of people are using the fact that they can reclaim charges as a safety net, but this won't last.

Saying it won't last and that they won't be reclaimable at some point is plain wrong. How do you know that? What information do you have that will comfirm this? Personally, I'll wait & see what Mr Justice Smith has to say about it. As far as I know, he is the only bloke who can make such a statement with any authority.

Your original "heads up" might be news to you, but its very old news here and has been debated for many months now.

 

That said, at least your sentiments appear to be on the side of the consumer so I for one would welcome anything you could bring that could help in some way.

[breeze1996]

I always get told no refund today I was offered one without even asking and he refunded the charges for any items from this month too.

I had phoned up about something different and he offered the refund.

Then there is the barrister who said he knew the banks had got it wrong on another thread...

[midge61]

Which bank was that breeze?

[breeze1996]

It was Abbey in both case. That's why it seems odd, they hate paying out.

[indebtstudent]

The whole charges system is too skewed against the consumer, how is it possible that the fee for an unpaid item can be put onto an account with NO OVERDRAFT thus taking it overdrawn?

 

The only way to avoid charges is to use a savings account for payment in but on these you cannot have standing orders or direct debits etc.

[noomill060]

They will try anything they think they can get away with.

 

Our job is to stop them, or at least claim back what is ours. (plus interest.)

[dave]

The whole charges system is too skewed against the consumer, how is it possible that the fee for an unpaid item can be put onto an account with NO OVERDRAFT thus taking it overdrawn?

 

The only way to avoid charges is to use a savings account for payment in but on these you cannot have standing orders or direct debits etc.

 

...or stop using banks altogether.

[Fullycharged]

If only - but what are the alternatives? Almost anything you do these days requires you to have a bank account.

[dave]

Not so. I haven't had an account since August - and it's a lot easier without.

 

My wages are paid into a friends account and withdrawn in cash the same day.

[breeze1996]

I heard a whisper that Natwest expect to pay everyone back the charges and interest within the next 8 weeks, has anyone else heard anout this?

they have written up the paperwork and are just waiting for the judge to report back as they just don't want the charges know. Seems odd after all the talk about fighting it. I was told they know they don't have a hope in Heck but the other banks arn't happy giving in.

[indebtstudent]

"My wages are paid into a friends account and withdrawn in cash the same day."

 

I'm sure banks aren't too keen on this, not sure if it is prohibited thought. In any case it doesn't solve the problem, the entire population cannot adopt this approach!

[Fullycharged]

I agree indebtstudent. A banking system is very useful and I don't think it's removal will improve matters. What we need is a bank that charges its customers reasonably. If such a bank existed I would certainly take my business there and I'm sure thousands of others would too. So it's not likely to suffer from low profits as it would make up for the low charges with a higher number of customers.

 

Anyone here with ambitious plans to set up a financial institution anytime soon on such terms??

[noomill060]

How about the entire working population of Britain having our wages paid into Dave's mate's bank account and withdrawing them in cash each week. That would sort it.

 

As they say in Germany:

 

Ein Reich

 

Ein volk

 

Ein bank account.

 

 

Yeah ok, daft idea...

[breeze1996]

We could always do a run on the banks at the same time and day, that would put the wind up them. just think if there was no cash in our accounts for 24 hours....