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Legal duty to keep losses as low as possible


martinwhite
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If I am not mistaken (and I will look for some legal authority for this later) each party in a contract has a duty to keep their potential losses in the event of any breach as low as possible.

 

Therefore if the banks say that the high fees are due to manual intervention, then in this day and age, I would have though that they were not fulfilling their legal duty to keep their losses as low as possible.

 

Returned items is such a common event that they should have designed an automated system if they have not already. (Which we know they have)

 

So we have the banks with a self-defeating argument.

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I'm sure you haven't forgotten as well that at the same time the level of charges have gone up enormously! I noticed this when compiling my claim. Some of the fees were £10 and have gone up to nearer £30 over the 6 years. The arguments about reasonable costs look ridiculous even without this requirement. I have hurrumphed about this several times over the last week and glad I have finally got round to putting it down. I feel better already.

Nice one!

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Exactly, and as the costs of computer hardware has gone through the floor in the last ten years, and computer power multiplied even more than the banks charges, the costs should have gone down by a huge %

 

It would be interesting to see the number of returned items etc plotted next to the cost of charges?

 

I admit that returning items is probably a pain in the arse for the banks so would it be sufficient to show that the increase in charges has had a deterrent effect?

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You are referring to the common law duty to mitigate losses. In any contract if there is a breach the person suffering loss has a duty in law to make that loss as small as possible.

 

So if you think it through - how much less does it cost NOT to pay something that would take you overdrawn than to pay it, charge you for the unauthorised o/d and for a paid referral fee - not paying it would result in just a returned DD, etc fee. Clearly the banks deliberately augment their loss. No doubt this might get argued if a bank ever gets before a court.

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  • 12 years later...

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