Bank threats to close your account may be unfair

[MoneyBAGs]

A threat to close your account might be the Bank's big stick. It is more than mere account closure because with the temination notice will come a demand fro immediate repayment of any overdraft. An entry made to the credit register as well as the porblems caused by having to open a new account, overcom the effects of your previous bank history etc.

However, it seems that a contractual term which permits arbitrary closure of your account - and also closure of your account without notice is unfair under the Unfair Terms in Consumer Consumer Contracts Regulations

 

There is a very readable analysis of the Regulations by John Carruthers at:-

http://www.journalonline.co.uk/article/1001153.aspx

 

Extract:-

 

Unilateral Termination Terms

Terms which allow the supplier to unilaterally terminate all or part of the contract may be unfair. Terms which allow termination on an arbitrary basis will be always be difficult to justify. Terms which state that the contract may be terminated in the event of a material breach of contract may be fair. For example the OFT upheld a clause which allowed a canal boat operator to unilaterally refuse to release a boat where the renter was an unsuitable person. Unsuitability could include drunkenness and inability to operate the boat or for general safety reasons. If this type of term is used then an illustrative list of good reasons for refusal to perform should be included.

 

Termination of a contract without notice

Clauses allowing the supplier to terminate a contract of indeterminate length without notice will usually be considered to be unfair. In Falkirk Sunbeds, Bulletin 1 Case No 6, the term provided that management could refuse entry without providing reasons. This term was found to be void. But in American Golf, Bulletin 5 page 18, a term allowing a consumer to be suspended or expelled from the golf club for acting illegally or bringing the club into disrepute was held be acceptable

[kevin.philips]

Terms which state that the contract may be terminated in the event of a material breach of contract may be fair

 

Very difficult to defend against, the bank are stating that there has been a breach and can/will close your account and demand full payment of any os borrowing. Even before you have the opportunity to create a claim you may be hindered by the situation they place you in. However that said it doesn't look good for customer services.

[Guest]

However, it DOES explain why any GENUINE bank error (and yes, they do occasionally make a mistake, even if most of the time it's deliberate) disappears without trace from statements, because obviously if push comes to shove the banks don't want you to be able to prove that they've been JUST as guilty of breaking the contract as they're accusing you - and therefore can't shut your account for that reason.

[kevin.philips]

However, it DOES explain why any GENUINE bank error (and yes, they do occasionally make a mistake, even if most of the time it's deliberate) disappears without trace from statements, because obviously if push comes to shove the banks don't want you to be able to prove that they've been JUST as guilty of breaking the contract as they're accusing you - and therefore can't shut your account for that reason.

 

Not sure where you're going with this..

 

You start with one approach and end with another - banks like all UK organisations are still under the same jurisidiction in maintaining customer records (DPA) and I don't think they could or would ever delete a transaction - it goes against rules in auditing and financial accounting standards, if you can prove they've ever done this then you could add very serious weight to the motion of this group.

 

EDIT - In fact your reply to this topic goes against your statements in claiming against NATWEST in a different thread regarding the DPA that I have just read - If you are a helper you should at the least be consistent http://www.invictadigital.com/bank/phpBB2/viewtopic.php?t=23

 

Aside from that in putting a few words together on the back of your comments....

 

If a bank feels you have breached the contract THEY can shut your account, it would be up to the consumer to bring a claim to prove otherwise, either through the courts or the financial omnudsmen.

[MoneyBAGs]

Hmm

I have difficulty imagining that bank statements would be tampered with.

Do you have any evidence of this because it would be a very serious thing to do.

[Guest]

Nothing was tampered with, per se.

 

Last year on one occasion the natwest made a geniune mistake on my account. I drew their attention to it, and because they had charged for it they refunded that charge immediately without contest, because it was clear that a genuine error had occurred.

 

My point was that when I next received a statement it didn't give the charge and the refund. It simply didn't show the event at all. This is the problem, when the statements arrive, they don't mention the transaction at all and these tend to be the only records people keep - certainly I can't produce paper evidence to the contrary, because I can't control the account myself, I can only watch. As for tampering, since the statements haven't been produced at the time technically nothing had been tampered with, but I did find it curious that when the statements WERE produced, there was no record of the mistake that caused my account to become overdrawn, or the charge, or the refund, or the correction of the mistake. It was all done over the phone with telephone banking.

[Guest stephen]

Most banks will always leave the option to close your account in there contracts, and i delt if any court would find that unfair, but I would love to be proven wrong.

 

To be honest when I sued abbey National I expected them to close my account, it just so happens they did so at Christmas, so I got even more media coverage for that,

 

However even after all the media attention my case received I walked into another bank and opened a new account, so all I say is don’t worry if the close your account you soon get another.

[BankFodder]

I would recommend opening an account with another bank preparatory to acting against your bank. This prudent step will allow you to open an account befoe your existing bank dishes your credit rating and makes life tough.

[gothicf0rm]

wouldnt your bank dissing your credit rating be defamation?

[BankFodder]

The issue of defamation certainly had occurred to me as well.

I'm trying to think of reasons why it shouldn't be and I can't come up with any at the moment.

However, there may be a defence of qualified privilege which relates to duties in making reports. However, I can't remember all of the details of this and need to look them up at some point.

Maybe you could search this and see what you come up with.

 

The problem with defamation, of course is that although getting your charges back you are generally protected from costs by the Small Claims procedure rules, in defamation there is no such protection.

 

If you lose, you will lose a LOT

[nailson]

Hmm

I have difficulty imagining that bank statements would be tampered with.

Do you have any evidence of this because it would be a very serious thing to do.

 

Last Christmas I went 27p over my limit on a joint account, the day before my wages went in (easy mistake to make) - got clobbered with a £30 charge. My wife complained and the charge was lifted - literally, didn't appear on the statements or anything. Like it had never been there...

[BankFodder]

Well yes - but No - it's a metter of discretion.

[BankFodder]

Go and tell Kate Wicox at the OFT, then

[BankFodder]

put bizou bizou from me, then

[martinwhite]

Two points.

 

1. Since we know all banks are the same, and they won't NEGOTIATE with us on equal terms, what are the chances of someone, e.g. Stephen, having an account closed on them every year, following another claim? Eventually (taking things to their logical conclusion) that person would be effectively banned from all banks!

 

2. Suppose 100 Nationwide customers take legal action to reclaim unlawful charges, and all 100 have their accounts closed by the bank, won't that look odd to the press, OFT, and the Banking Ombudsman? Surely it would then be plain intimidation/bullying (choose your own phrase) and obvious as such to all concerned? When dealing with individuals, the banks can always claim their discretion in closing an account for "commercial reasons" however the steadily increasing number of people claiming (and having their accounts closed because of this) will create a very obvious trend.

 

Martin

[Bookworm]

They could call "streamlining" Unfortunately, at this point, I don't think there is much anyone can do, they still have that much power, even if it's quite obviously nothing more than throwing toys out the pram.

[Mgizmogpc]

They can call it "Streamlining" and dress it up any way they want, but there is something you can do: Before handing back any Cheque Books, etc and terminating dealings, get yourself a big banner or placard and stand on the pavement outside your bank and describe your beef in big bold letters. Don't obstruct the entrance or pavement and exercise your legal right to protest in person. The internet is fine and this site is excellent, but dont ever forget the impact of direct action and physical protest in person. People will even ask you what you are doing, if you explain logically, then a pound to a pinch of pig s**t they will realise they are also being screwed and there's another recruit for the cause.

Don't forget to advertise this website on the banner, and you might also want to inform the local press of your intention.

This is what I intend to do, because as sure as eggs are eggs my account will be closed when I finish my court action ( in progress ). :twisted:

[lee6370]

My Nationwide account is due to be closed on 28th June, following my court action against them.

 

Is there nothing i can do?

[sazz]

Two points.

 

1. Since we know all banks are the same, and they won't NEGOTIATE with us on equal terms, what are the chances of someone, e.g. Stephen, having an account closed on them every year, following another claim? Eventually (taking things to their logical conclusion) that person would be effectively banned from all banks!

 

I'm in the lovely predicament of being able to only try & open a new account with LLoyds, Co-Op and IF as I am banned from the rest....

[lee6370]

Well i'm working my way though them, Nationwide down, lets see who will have me next.

[mechs]

they lose a few customers for taking action against them and they gain a few from other banks for the same reason ... hey guys we're all swapping banks!

[Guest Alison82]

What about this?

 

PART TWO

 

SCHEDULE 2

 

INDICATIVE AND NON-EXHAUSTIVE LIST OF TERMS WHICH MAY BE REGARDED AS UNFAIR

 

1. Terms which have the object or effect of-

(q) excluding or hindering the consumer's right to take legal action or exercise any other legal remedy, particularly by requiring the consumer to take disputes exclusively to arbitration not covered by legal provisions, unduly restricting the evidence available to him or imposing on him a burden of proof which, according to the applicable law, should lie with another party to the contract.

[thecornflake]

 

2. Suppose 100 Nationwide customers take legal action to reclaim unlawful charges, and all 100 have their accounts closed by the bank, won't that look odd to the press, OFT, and the Banking Ombudsman? Surely it would then be plain intimidation/bullying (choose your own phrase) and obvious as such to all concerned? When dealing with individuals, the banks can always claim their discretion in closing an account for "commercial reasons" however the steadily increasing number of people claiming (and having their accounts closed because of this) will create a very obvious trend.

 

Martin

 

I find this scarily intuitive since A&L just publicy announced they would close accounts of all people who instigated court proceedings against them to reclaim charges.

[goldiea]

I have been reading this thread and although not super experienced I was interested in Bankfodders and others discussion about defamation - Surely defamation relates to the way in which others view you, i.e with a default from the bank after closing your account? therefore may mean other banks would think less of a good bet and think or you as a bad risk

 

As the default was permanent record (well six years anyway!) which would obviously be concidered and available for other institutions to view not mean that it could possibly fit the criteria for libel? Not sure but I cant think of why it could not be concidered as applicable.... it would also be there to see and therefore surely does that not mean no further proof is needed to bring an action?

 

Just a thought.....be nice if that really was the case

 

xx

 

Just thought I would add that I am just entering into conversation, not giving professional advise - if I am required to put a disclaimer or something on the end of posts? I will happily do this.....

[joneshousehold]

My Nationwide account is due to be closed on 28th June, following my court action against them.

 

Is there nothing i can do?

 

Did anything happen about this. I have just had a letter threatening to close our account and I don't want to give in without a fight.