Appeal for price comparisons in space & time

[Mistermind]

Quote:

Originally Posted by AugAussie

 

"I have a question about the fees being disproportionate

If the fees are for a service is there anyone who could assertain if the price for the said fees has increase inline with cpi? if it indeed is a fee for service like dentist fees, then i would have thought the increase would be yearly or bi annualy inline with cpi.

Thoughts anyone?"

 

_____________________________________________

 

An excellent question. Yes, bank penalty charge have risen far faster than CPI, from £2 in 1970 to average £30 today. What would a price in step with CPI be today?

 

Until IT advances in recent years, cheques and credit pay-in slips were physically transported on night One by security vans, from the pay-in branch A to a central clearing hub just like a post office sorting centre. There it is sorted on Day Two and physically transported on Night Two to 10 thousand receiving branches. On Morning Three a cashier or three at the cheque's home branch Z will confirm signatures and dates and things like "words and figures do not agree", then alert the manager to manually decide whether to bounce or tolerate uncovered cheques. If bouncing, then that laborious physical journey is repeated in reverse, from branch Z eventually back to branch A. Hence in 1970 the £2 charge was well justified on grounds of manual cost, even if the bounce involved only a 50 pence cheque.

 

As IT advanced over the last 20 years, the physical travelling was reduced and manual intervention was reduced to a minimum, until today the costs of bouncing have been variously estimated at figures between 50 pence and £5. Instead of a local branch manager who knew about you, it is now impersonal nameless staff at vast Service Centres who in the first instance decide to bounce or not bounce, sometimes incomprehensible telephonists in India.

 

Even as bank costs fell sharply, bank charges rose sharply. Some banker or professor sympathetic to the cause could help us by producing objective evidence filling in the gaps, plotting the year-on-year rise of penalty charges while the OFT slept.

 

As well as comparisons across time, there are also comparisons across space. UK penalty charges are uniquely high. I understand US and Aussie prices are much lower, but I have to hand only a concrete figure of £3 charged in Ireland. Anyone with friends and relations in US, Canada, Aus, Singapore, etc could try and find out. I believe Tom Brennan's team have done research on comparative prices in the EU, so would have comprehensive figures there.

 

Such a credible comparison survey across time and space would be really helpful and would stand up in court. Better than saying to the judge,

 

"This price is too high -- I can really feel it in my bones, can't you?"

 

.

[Mistermind]

Banks know to the penny the true IT cost of penalty charges, but guard it with their lives.

 

As the onus rests with claimants to prove that penalty charges are profit-making and therefore unlawful, the only option would be to draw comparisons across space and time. Claimants need to prove bouncing did not cost £39, or else his claim is not proven. Banks do not need to prove it did. Unless the claimant's case is good, the defendant need not get out of bed, as Kevin's opponent did not. Jog your dad's memories, ask your cousins overseas.

 

This question is not academic. Judges will want it answered in court, as Judge Cooke did with Kevin, i.e. how do you know bouncing a cheque does not cost £39?

 

Price Precedents

 

This question has not been given prominence because nobody had to face a judge until Kevin. That's not completely accurate, as CAGger barcote faced up to Egg in Oxford Court on 21st November 2006 and won. Himself a lawyer, barcote went to court armed with costings studies from USA and Aus pricing the charge at a fraction of the price submitted by Egg. Unlike the House of Commons and BBC evidence which was ruled as inadmissible in Berwick v Lloyds, the USA and Aus evidence submitted by barcote in this hearing was ruled by the judge as admissible. No account of the hearing is publicly availaable, but it appears an arbitrary compromise figure of £5 was agreed between the judge and barcote. Neither party wanted the case to be used by others as a battering ram, so detailed information remained muted.

 

In any recurrence of such a debate ib price I suggest that any claimant arriving without answers prepared will be at a disadvantage. I also suggest that actual prices charged in the marketplace, e.g. by a Dublin bank, will be more convincing than conclusions drawn by academic studies.

 

Success! Judgement AGAINST Egg...

[Mistermind]

 

An appeal for information across space and time

 

e.g. two Dublin banks £3 charge T&C:

 

http://www.accbank.ie/ul_fees_charges.html

 

http://www.aib.ie/servlet/ContentServer?pagename=ROIPersonalPortal/AIBContent_C/pp_article&c=AIBContent_C&cid=1136826345174&channel=P001

[Mistermind]

From news available on the web since yesterday, no Kevin appeal (he will go to FOS instead). Second win by Lloyds in court.

 

See 7 news links in

Sticky: Lloyds victory in Birmingham - in perspective (Last Page post #181)

[Mistermind]

petcat,

 

While England slept

 

Thanks for your support. Inhabitants of this green and pleasant land have historically been insular in outlook ("Fog in channel, the continent isolated"). It would be unthinkable for a price to stand at 3 euros in France, but 39 euros in Germany. We have exactly that, in £3 for a cheque bounce in a Dublin bank, but £39 in Abbey Bank. I suspect 99% of the population do not know this, 99% of judges do not know this.

 

An ally from space

 

In addition to the essential T&C, I suggest that all claimant bundles would benefit from inclusion of the two Dublin T&Cs printed showing £3, to demonstrate that UK charges are the errant exception, not the norm.

 

An ally from time

 

A historical graph plotting the vertical rise of UK charges over 30 years would illustrate even more sharply how this insular price rise by stealth completely got out of hand while the OFT slept. Hyperinflationary charges are the enemy of the Chancellor, I cannot see who else would be sympathetic apart from the beneficiaries. However, historical prices year by year need to be backed up by documentary evidence, so this pre-internet research back to yesteryear will probably need a journalist or academic with access to library facilities, possibly in the City of London -- unless anybody has kept 30 years worth of back statements including a few bounces over the years, lol.

 

A frightened enemy

 

I suggest the best battle to win is one without casualties, where a demoralised enemy walks away. Even if the Dublin £3 figure does not get a chance to be aired in court, its presence in the bundle helps to enlighten the judge, and gives notice to the bank that topics they least want publicized stand ready to be publicized, by this claimant herself. So fight her at your own risk.

 

Sticky:Is the bank taking your Benefits ? - I trust this is the thread you have read? I do not know this subject, so will leave it to those who do. I recall reading a post from a reputable Mod recently, that a certain letter will ensure the bank will keep their hands off your food money, unfortunately such warning needs to be repeated every week, said the Mod.

 

berwick v lloyds 15 may 2007. This thread last night contained a new Lloyds template letter now going the rounds..................

 

GL

miao, X

[Mistermind]

Curlyben,

 

I believe this type of historical info is extremely helpful, perhaps you could scan it and post same with names/addresses obliterated, also make available to [email protected].

 

Banks would rather die than reveal their true costs, so outsiders have to construct indirect evidence by inference. Price levels can be challenged in two ways:

 

1. It is above cost price contrary to Dunlop-v-Garage ruling. With banks refusing to reveal cost price, the more evidence is presented, the better a judge can decide on the balance of probabilities. If many objective signposts all point in the same direction, then the judge may allow in the absence of proof beyond a doubt that "this case has merit".

 

2. Supply of Goods and Service Act 1982 Section 15 - "Reasonable fee" question raised at Kevin's trial but not adequately answered.

 

Even allowing for a profit component inside a "service fee" the price is anti-competitive, and outlandishly higher than the Consumer Price Index rises, i.e. do UK banking charges reflect a true, free market? AIB which in its Dublin branch charges £3 for a bounce, in its UK branch charges £20, almost certainly carrying the same costs as in Dublin, using the same IT datastore. It could be libellous to suggest a price-fixing cartel in play, so far be it from me to suggest it. No, I have not said banks are operating a price-fixing cartel in the UK, perish the thought.

 

Consumer price inflation, 1947–2004 The National Office of Statistics says a shopping basket costing £18.30 in 1970 would have risen to £152 in 2004. We all know that banking operations, labour-intensive in 1970, have since become infinitely faster, sleeker and cheaper, employing fewer staff. Nevertheless if a bounce charge known to be £2 in 1970, rose at the same rate as household groceries, then by CPI it would have risen to £16.60 in 2004.

 

So where did the price of £39 come from?

[Mistermind]

Robdblynd,

 

Many thanks, I am sure many people would be interested and can use your link.

 

UK banks are one united monolith armed to the teeth, claimants are a spontaneous grassroots uprising, under-informed and under-equipped. All additional ammunition will help. In the absence of proof beyond a shadow of doubt, judges would give consideration to an aggregation of proof, each humble piece of information rowing its own weight.

 

The 2 Dublin banks T&C links:

 

http://www.accbank.ie/ul_fees_charges.html

 

http://www.aib.ie/servlet/ContentServer?pagename=ROIPersonalPortal/AIBContent_C/pp_article&c=AIBContent_C&cid=1136826345174&channel=P001

[Mistermind]

http://www.consumeraction.org.au/downloads/DL56.pdf

 

Try that, it's where I got the dowload and have printed off to highlight relevant bits in case a bundle is really needed.

 

I've got CMC at Leeds Mercantile on 28th June so have been doing CMI sheet. got most of bundle ready to go but am going to include this report and the Irish one, and will definitely have these two as well.

 

As you say, every little bit helps.

 

Robdblynd,

 

Thanks ever so much, and best of luck in your court date. A man of your thoroughness ought to give them a drubbing.

 

Absolutely fab, all the more significant because this scholarly document was sponsored by the impartial Australian federal govenment.

For those not about to read through this 90-page pdf,

 

cheque bounce cost price in Aus was estimated at £1.50,

cheque bounce charge in Aus averaged at £15.

 

With IT costs comparable worldwide, UK costs ought to be in the same ballpark as £2. Aussie banks are greedy enough. UK banks appear to be more than twice as greedy.

 

This document was dated December 2004, hopefully someone with connections in Aus can update us, have those naughty banks stopped being naughty now?

[Mistermind]

Amber, someone posted shareware on CAG which will convert acrobat .pdf to Word document, out of which cut-and-paste will be possible. I am sorry to disappoint you Amber, but the Aussie pdf is not 40 pages, but only 90 pages. Page 29 contains the Aussie charge prices, page 26 (I think) contains the Aussie cost price estimates. So only 2 pages of screen print will suffice, while providing the full Aussie link to convince any sceptic judge or bank defendant to view for himself.

 

I believe this Aussie report was probably used in Oxford Court, barcote v Egg hearing on 21st November 2006, and was ruled admissible by the judge (having been placed in the bundle?).

 

I am of the persuasion, that if you carry a kalashnikoff in one hand and a Rocket-propelled grenade in the other, neither needs be used as your opponent runs for the hills leaving a settlement sum behind.

[Mistermind]

Very well done midge61, just the sort of research tool.

 

Unfortunately it only covers the period 1870-1970. Up till the late 70's penalty charges were modest and justified. It was in the eighties, nineties, and even more so in the noughties, that IT-automated penalty charges were hijacked as a money-printing press or pocketpicking tool -- while the OFT slept.

 

London School of Economics, or the City Library would be the sort of place to chart the meteoric rise of penalty charges even as the true cost fell like a stone. Unfortunately I do not live in London.

 

Whereas fluctuating interest rates were consistently documented, the level of penalty charges tended not to be included in T&Cs. Repeated rises were generally notified discreetly by leaflets to customers who binned them, while banks stayed below the radar of the financial press.

 

We really need the long memories of oldtime bank staff who want to make a stand for justice and reason.

[Mistermind]

On page 10 of this pdf file, are the charges for the Irish tsb.

 

http://www.permanenttsb.ie/pdf/Personal_and_business_banking_charges.pdf

(page 14 onwards)

 

Page 7 and 14 on the bank of Ireland pdf.

http://www.bankofireland.ie/html/gws/includes/personal/pdfs/fees_charges.pdf

 

 

Page 6-7 on the Ulster bank pdf.

http://www.ulsterbank.ie/content/ri/personal/current_accounts/downloads/Fees_and_Interest_LB019529.pdf

 

Page 4-5 for Northern Ireland Ulster bank pdf.

http://www.ulsterbank.co.uk/content/ni/personal/current_accounts/downloads/Guide_to_Personal_Current_Account_Fees_Interest.pdf

 

Absolutely fab info. Is TSB Permanent in any way connected to Lloyds TSB?

[Mistermind]

The Irish Tand C for Bank Of Ireland, Ulster Bank and AIB are probably the most relevant.

This is because they also have interests in Northeren Ireland (AIB known as First Trust bank).

If you could get fee rates for each, from "both sides of the border" it would definitely strengthen case, since charges in Northern Ireland are just set at similar level to other banks.

How can they argue that it costs less to process these "services" in Republic of Ireland than in Northern.

The difference in cost to customer is startling !!

 

Absolutely fab idea. The banks present a united front, that front needs to be broken. All judges who have ruled in favour of Lloyds have pointed out that a "service fee" at the market price is by definition "reasonable" being the only game in town.

 

This "market price" appears to be determined not by actual costs, or by competition, but by the Eire/Ulster border and the Irish Sea. Obviously there will be no CAG members in Eire(?). I shall try and see if Ulster CAGgers can be encouraged to focus on these contrasting prices -- at their expense.

[Mistermind]

Hi

Here is two links that may be of interest

 

http://www.competition-commission.org.uk/inquiries/ref2005/banking/prov_find_app_4-4.pdf

(page 13 of 14)

 

Provisional Findings report -Northern Irish personal banking

(page 16 of 28 )

 

Both documents are of interest in any submission to court, questioning the legitimacy of charges allegedly (be careful with possible libel) kept at artificially high levels (compared to Eire) in Ulster and UK by an alleged possibility of price-fixing cartels, i.e. this allegedly may not be a true and competitive market.

 

It could be libellous to suggest UK banks are in a price-fixing cartel.

Far be it from me to suggest UK banks are in a price-fixing cartel.

[Mistermind]

daimo, the OFT went to sleep for 20 years. This is not libellous I hope.

 

Upon your question UK bankers' faces have gone a shade of crimson -- the same shade as a parent trying to give a child a Sex Education lesson.

[Mistermind]

Mumof4, yes I believe it would be helpful to collate information and form a wider view in a globalised world. Aus and USA consumer groups also actively campaign against excessive penalty charges, even though their level is only half ours.

 

UK has the most exhorbitant penalty charges in the developed world, and coincidentally the highest level of consumer debt, enough to worry the Bank of England and the Chancellor. Possibly because UK has the highest ratio of homeowners, and ever since WW2 automatic house price appreciation year on year has been taken for granted, so that people got used to high mortgage payments, credit card borrowings, loans and overdrafts. Presumably it would all work out alright in the end, thanks to house price growth.

 

From that point it was only a short slippery step towards tolerating penalty charges which continuously increased by stealth. Until the past year there had been in place a conspiracy not to discuss penalty charges in public, least of all to confess, God forbid, that one was a member of "Cheque Bouncers Anonymous". Bankers shrewdly reinforced this psychology, using loaded descriptions like "dishonouring cheques". Anybody caught in such a predicament was subtly persuaded by social convention to suffer in silence, not to protest in public. Every person thought his exploitation was an isolated case and it was his fault.

[Mistermind]

It is all because of the magic of the shamrock that Dublin banks can charge £3.

 

Without it the Abbey Bank needs to charge £39 and only barely meet their costs.

[Mistermind]

bally35, I always say Dublin because most people in UK would struggle to name a second city in Eire.

 

I visited Dublin once via Ryanair and found it a most charming and optimistic place. Judging by the humane penalty charge a most civilized place.

[Mistermind]

Yes I did check if P/P was necessary.

This would be a mental legacy left behind by decades of The Troubles. I would not have liked to have been confronted with questions while I carried no official ID on me.

 

During the dark years I was told that any brit who got off the plane in Belfast was stared at by Special Branch heavies on the tarmac scanning for faces. No doubt all visitors would have been logged on MI5 computer as having been there.

 

When I visited Dublin on a spring day I saw optimistic young faces confident of the future, and spending in the shops. I never found out why until now -- they only paid £3 penalty

[Mistermind]

Our cr*p banks can beat your cr*p banks.

[Mistermind]

Hi

 

Have read this post with great interest. I have been trying to search on the net for archives and have come across some pages from a journal about Uk banking reforms.

 

I'ts just a thought but would it not be worth contacting somewhere like the London School of Economics where they might hold archives with the sort of data you are looking for?

 

A very good idea, unfortunately LSE Librarian confirmed to me they do not allow external visitors to their library. They did recommend the following as a likely source to provide evidence charting the unjustifiable runaway inflation of penalty charges -- for anyone living in London with a little time available, unfortunately I am too far away.

 

 

 

City Business Library

http://www.cityoflondon.gov.uk/Corporation/leisure_heritage/libraries_archives_museums_galleries/city_london_libraries/cbl.htm

[Mistermind]

Yes midge61, I do see value in exposing the history of UK penalty charges, the highest in the world.

 

They were not created along with Adam and Eve.

They were concocted in recent years by bankers tiptoeing past slumbering watchdogs.