Supreme court case not the end of the world

[einyuk]

I'm not here to defend the banking system, but you're wrong in saying "without being asked for it". By the very nature of using your card, setting up a direct debit or standing order, you're issuing an instruction to make a payment on your behalf.

 

I agree that if an account reaches zero, the simplest thing would be to not pay out for you. No fees, no charges, just no payment. The problem is that the sheer volume of transactions each day makes this practically impossible.

 

Most banks employ an exceptions process that takes care of minor overspends based on your previous credit history with that bank. If you're a good guy who's salary comes in each month, they'll probably pay your mortgage even if your account can't cover it. Conversely, if you're not so financially astute, they will probably reject the payment.

 

The true cost of this process is totally irrelevant in all of this, and is probably impossible to calculate accurately. The point is that they decide what they will charge if you break their rules.

 

I can remember when we were charged for using our bank accounts if the balance fell below a certain level. IIRC it was 30p for every cheque, and 20p for each direct debit or standing order. In today's money that would probably be more like 50p or £1.00 a time.

 

If they went back to that system they would probably make a lot more money but the argument is why should those who live within their funds subsidise those who don't?

 

Think you will find that it was said in the supreme court ruling that it is the charges that fund free banking £2.6bn a year i.e. "robin hood in reverse"

[renegotiation]

Think you will find that it was said in the supreme court ruling that it is the charges that fund free banking £2.6bn a year i.e. "robin hood in reverse"

 

They could easily turn a profit with free banking and no rip off charges. And if they all earned a bit less too? Even bigger profits. It's not like they are underpaid is it?

[rickyd]

They could easily turn a profit with free banking and no rip off charges. And if they all earned a bit less too? Even bigger profits. It's not like they are underpaid is it?

 

I guess it all depends on who "they" are? Most branch staff earn about the same as retail staff, as most people on here already know I have several friends who work within RBS and who provide me with inside information from time to time.

 

If you're referring to the main board, the foreign executives, traders in Canary Wharf, then I'd have to agree with you, but in reality most of the bank workers you ever come face to face with earn way less than you'd believe.

[rickyd]

Think you will find that it was said in the supreme court ruling that it is the charges that fund free banking £2.6bn a year i.e. "robin hood in reverse"

 

That's exactly my point!

[renegotiation]

I guess it all depends on who "they" are? Most branch staff earn about the same as retail staff, as most people on here already know I have several friends who work within RBS and who provide me with inside information from time to time.

 

If you're referring to the main board, the foreign executives, traders in Canary Wharf, then I'd have to agree with you, but in reality most of the bank workers you ever come face to face with earn way less than you'd believe.

 

You are quite right and I was indeed referring to the 100k plus club. Believe it or not I saw some highly paid tosser on TV a few months back trying to justify keeping bonuses. His argument revolved around the thousands of low level staff who would miss out on their £1,000 bonus which is a lot to them. My jaw actually dropped in disbelief. How about pay them all £1,000 more and then cancel the bonuses?! Anyone else see that?

Edited November 26, 2009 by renegotiation

[rickyd]

You are quite right and I was indeed referring to the 100k plus club. Believe it or not I saw some highly paid tosser on TV a few months back trying to justify keeping bonuses. His argument revolved around the thousands of low level staff who would miss out on their £1,000 bonus which is a lot to them. My jaw actually dropped in disbelief. How about pay them all £1,000 more and then cancel the bonuses?! Anyone else see that?

 

Very well said! I think its obscene that certain individuals receive bonuses in excess of £1million when the thousands of staff at the sharp end get paid less than £13k with no golf breaks, trips to Formula One events, expense accounts, oh and not forgetting a fairly massive salary to begin with.

 

Those pour souls really empathise with the customers as they try to implement the policies of their masters, and they get rewarded by being threatened with redundancy......

[Unholy Alliance]

The SC would seem to be denying consumers their rights, by deciding in advance what the merits of each case was. If the laws that are created to protect consumers are invalid, or cannot be applied, then this raises questions about the whole nature of the relationship between consumer/citizen and state, English law and European Law. There has got to be room somewhere in that for some decency and common sense to be exercised. Anyway, just because the SC says this matter cant be taken to Europe doesnt mean it is so. After all, 2 previous successful judgements have been overturned (and I still cant fathom out why!) so why cant the SC be overturned? Who are these people, and how are they in a position to decide what is fair? My message to caggers is never say die. Never. Between us and other interested parties I am sure a way can be found to overturn what I believe to be a decision based on political expediency, rather than Law. If Law is the administration of justice, then in this case it has surely failed, and in so doing, I believe has underestimated the possibiliity of real backlash from an already beleagured overtaxed, spied upon and lied to GB public.

[einyuk]

Throughout the case with the OFT the banks played heavily on the fact that if they lost it would be the end of free banking as we know it. But i would guess that they make far more out the paultry interest that they credit to accounts, how it takes 4 days for monies you pay to arrive in accounts etc etc.

[sonofthefairhead]

This is my first contribution,I was thinking the exact same thing , as I understood that the Robber banks had intended going to the European Court if they hadnt got their way yesterday.If those OFT tossers had stayed out of the situation people were getting money back from the crooks

[SurlyBonds]

 

I agree that if an account reaches zero, the simplest thing would be to not pay out for you. No fees, no charges, just no payment. The problem is that the sheer volume of transactions each day makes this practically impossible.

 

No true at all. When you use a debit card and there are insufficient funds, the payment is refused. that's it... it's just NOT paid.

 

However, did you incur a bounced Debit Card Use fee??? No.

 

The same can be applied to the systems that issue DD's... If the money's not in your account, then bounce it the same... just don't pay it... but why does this process cost £25-39 when a 'bounced' debit card transaction costs nothing? It's an identical process... presentation, validation, reconciliation, refusal, notification.

 

Computer mainframse and bank CBS's can easily be tweaked to reject ANY payment where there insufficient funds.

 

The banks just try it on becaase they think the Great Unwashed knows no better. I've been putting these sytems in for years, and know precisely how they work.

[renegotiation]

However, did you incur a bounced Debit Card Use fee??? No.

 

You 'll be giving them fresh ideas!

[Zamzara]

I've always thought that the real disgrace is the model of piling charges on charges, as if the charges were themselves borrowed money. This is what spirals people's debt out of control. If someone accidentally goes into a £10 overdraft, making a £30 charge is steep ,but legal it now seems legal.

 

What is still clearly to me wrong, and wide open to a regulation 5 challenge, is when the person pays back the £10 to treat them as still overdrawn by the £30, because they never borrowed the £30, it's not real money and the person never had the use of it so it should't be charged as an overdraft. It can be collected, but should be treated separately from the overdraft balance.

 

It's this practice that traps people into the quicksand of inflating charges, and should have been the focus of the OFT (rather than amount of the charge being higher than cost, which was flawed.) It's the term allowing charges to be treated as money borrowed that is the actual Regulation 5 unfair term.

 

It's a bit like giving someone a £30 fine for fare evasion. Then if it is still unpaid the next three times they travel that week, even if they pay the fares this time, giving them another three £30 fines because the first is treated as oustanding fares.

[SurlyBonds]

You 'll be giving them fresh ideas!

 

 

But, it absolutely dismisses their claim that they can't pick and choose which items to reject.

[themadcap]

Ive gone and sent the template letter yesterday and seem to have jumped the gun a bit can anyone help

http://www.consumeractiongroup.co.uk/forum/general/234687-do-we-really-need.html

[rickyd]

No true at all. When you use a debit card and there are insufficient funds, the payment is refused. that's it... it's just NOT paid.

 

However, did you incur a bounced Debit Card Use fee??? No.

 

The same can be applied to the systems that issue DD's... If the money's not in your account, then bounce it the same... just don't pay it... but why does this process cost £25-39 when a 'bounced' debit card transaction costs nothing? It's an identical process... presentation, validation, reconciliation, refusal, notification.

 

Computer mainframse and bank CBS's can easily be tweaked to reject ANY payment where there insufficient funds..

 

Sorry to rain on your parade but you are wrong.

 

First of all the systems are nowhere near sophisticated enough to keep a live running balance to prevent debit card transactions and second, retailers are notoriously fickle when it comes to collecting their payments.

 

I used to work on systems maintenance and can assure you there are huge holes in the real-time processes which is why banks have introduced card misuse fees.

 

As an example - you purchase goods during late night opening in M&S (one of the worst offenders) on a Friday night and spend your last £50. Next morning you check your balance and find you still have £50 available so you withdraw the money from a cash machine.

 

On Tuesday, after M&S have processed their sales backup from the weekend, £50 is taken from your account and hey presto you're now overdrawn resulting in a £20 maintenance fee for going into the red and your debit card transaction creates a Card Misuse Fee @£15 per transaction) and you're now owing the bank £85. If you don't repay this on time you'll incur interest and probably further charges next month too.

 

There is no "bounced debit card fee" because they don't bounce, if approved at the point of sale they are always paid, irrespective of what's in the account. If there's not enough to cover the transaction, they are refused at the point of sale. There cannot be a bounced card transaction fee because there's nothing to charge for. Its a simple "no", the sale doesn't go through as I'm sure we've all experienced at least once. The problems really lay with everyone's reliance on the not-so-perfect systems.

 

The Direct Debit systems are more sophisticated as they are generally pre-notified by nature of their regularity. This enables the so called "smart" systems to reconcile regular payments against regular credits giving customers the benefit of the doubt if a credit is delayed. The aim being to protect credit scores by returning fewer payments for good customers.

 

For those with poor scores, a decline decision is made automatically, subject to review if the customer puts the account into credit on the day the payment is due.

 

I agree that it would be far simpler to not pay in any instance where funds are unavailable but the banks do for some people and that's the situation we have to live with.

Edited November 26, 2009 by rickyd

[Bookworm]

The banks weren't told they couldn't go to the Supreme Court as it didn't exist at that time, it only came into being in October this year.

That's not answering the question, it was still called the House of Lords then.

 

The banks WERE refused leave to go to the HOL, but did it anyway. Then the HOL became the Supreme Court, but the reasoning remains the same.

[SurlyBonds]

Sorry to rain on your parade but you are wrong.

 

First of all the systems are nowhere near sophisticated enough to keep a live running balance to prevent debit card transactions and second, retailers are notoriously fickle when it comes to collecting their payments.

 

I used to work on systems maintenance and can assure you there are huge holes in the real-time processes which is why banks have introduced card misuse fees.

 

I know precisely how they work... my company has spent the last 22 years putting mainframes and U/CBS's into said banks and other companies... we're over here in the Caribbean putting a new one in here for a global group.

 

I disagree with your overall point... it's a bit generalistic, and might cover off some fo the older systems. But hey, I respect your right to disagree.

[rickyd]

I know precisely how they work... my company has spent the last 22 years putting mainframes and U/CBS's into said banks and other companies... we're over here in the Caribbean putting a new one in here for a global group.

 

I disagree with your overall point... it's a bit generalistic, and might cover off some fo the older systems. But hey, I respect your right to disagree.

 

I didn't understand either until I tried it myself, it is entirely possible to spend your last cent and yet find funds in your account through an ATM the next morning - and that's where the problems begin. If you went into a bank branch they would point out that you were stony broke and refuse your withdrawal request. The problems seem to seem to centre on the ATM network.

[kog]

As an example - you purchase goods during late night opening in M&S (one of the worst offenders) on a Friday night and spend your last £50.

 

The problem maybe with M&S having a slow or delayed system not the bank.

[rickyd]

I've always thought that the real disgrace is the model of piling charges on charges, as if the charges were themselves borrowed money. This is what spirals people's debt out of control. If someone accidentally goes into a £10 overdraft, making a £30 charge is steep ,but legal it now seems legal.

 

What is still clearly to me wrong, and wide open to a regulation 5 challenge, is when the person pays back the £10 to treat them as still overdrawn by the £30, because they never borrowed the £30, it's not real money and the person never had the use of it so it should't be charged as an overdraft. It can be collected, but should be treated separately from the overdraft balance.

 

It's this practice that traps people into the quicksand of inflating charges, and should have been the focus of the OFT (rather than amount of the charge being higher than cost, which was flawed.) It's the term allowing charges to be treated as money borrowed that is the actual Regulation 5 unfair term.

 

It's a bit like giving someone a £30 fine for fare evasion. Then if it is still unpaid the next three times they travel that week, even if they pay the fares this time, giving them another three £30 fines because the first is treated as oustanding fares.

 

Bravo! The real nub of the issue is exactly that.

 

The fees should not attract interest on themselves, rather, if they exist at all they should sit separately from the account balance and not make matters so much worse for eveyone.

[rickyd]

As an example - you purchase goods during late night opening in M&S (one of the worst offenders) on a Friday night and spend your last £50.

 

The problem maybe with M&S having a slow or delayed system not the bank.

 

You may be right, but it is a fact that they do no data processing at weekends and now they're open 7 days (at least in Scotland) perhaps its time to change this. The sad fact is that they are not the only retailer that does this.

[kopstar1965]

Well the ruling by the SC certainly livened things up again.

The OFT got it wrong in pursuing the "unfair" bit of the T&C

Personally I think the whole banking crisis has led to the decision to find in favour of the banks, Government is pouring in Billions, making another hole in the system to let it out again now would look bad.

Anyone who thinks the House of Lords would have come to a different conclusion is delusionary, where do most of them work or keep their cash huh?

The main victory was the lifting of the hold on claims, the banks WILL NOT want to get into court any more now than 2 years ago & press coverage that "the banks have won" is designed to blow away any more interest in future reclaims.

There is still a case to prove on this & some way to go, but from the start the banks have been obdurate, stubborn & downright nasty, every peice of literature is bullying to get YOU the consumer to back down.

Not me, no chance.

[renegotiation]

You may be right, but it is a fact that they do no data processing at weekends and now they're open 7 days (at least in Scotland) perhaps its time to change this. The sad fact is that they are not the only retailer that does this.

 

I've used a visa debit card on a Sunday and the amount I used came off my available balance instantly. They do have the systems in place. Sometimes you have to wait to see the transaction come up on your online statement, but the amount does always comes off your available balance when the card is used.

 

 

 

They could easily turn a profit with free banking and no rip off charges. And if they all earned a bit less too? Even bigger profits. It's not like they are underpaid is it?

 

David Davis just said exactly the same thing on Question Time.

 

I digress a little, but LOL at Lord Falconer trying to save his bacon. He is telling big porkies.

[davefirewalker]

No true at all. When you use a debit card and there are insufficient funds, the payment is refused. that's it... it's just NOT paid.

 

However, did you incur a bounced Debit Card Use fee??? No.

 

 

 

Hi Surlybonds

 

ermmmmm....yes

 

I paid for something on the internet....£2.00 yes two pounds, on a saturday

 

it was authorised and paid there and then come monday they took out the previous months charges and then the £2 guess what ???? the £2 put me over and I got a £28 maintenance fee and a £35 gurantee card payment fee

 

thats £63 for going overdrawn by less than £2.

 

the point is they must have known that there would be insufficient funds when it was authorised and they let me do it anyway. !!!!!

 

A prepay card would not of let me do that....why cant the banks do that ??

 

debt engineering ....thats why

 

B?*7^%stards

 

rgds

 

dave

[SurlyBonds]

The OFT got it wrong in pursuing the "unfair" bit of the T&C

Personally I think the whole banking crisis has led to the decision to find in favour of the banks, Government is pouring in Billions, making another hole in the system to let it out again now would look bad.

The main victory was the lifting of the hold on claims, the banks WILL NOT want to get into court any more now than 2 years ago & press coverage that "the banks have won" is designed to blow away any more interest in future reclaims.

There is still a case to prove on this & some way to go, but from the start the banks have been obdurate, stubborn & downright nasty, every peice of literature is bullying to get YOU the consumer to back down.

 

Well done... it is precisely that... a fair amount of bullying and now downright lying about how the case will proceed from here ... in their view only. Honestly, these ****ing banks think the courts are their exclusive domain... well, having said that... after yesterday's laugh

 

As Steve Hone has put in his summing up post... we are simply back to square one as of two years ago.

 

We now hit back with a new attack and new weapons... and I think we can also use the very case that was handed down yesterday to our advantage. They have actually created a bit of an Archilles' heel for themselves.

 

THE BANKS CAN'T HAVE IT BOTH WAYS!