Bank Charges Consumer Charter

[pward33]

So what's the Scotland situation? Our laws are different?

 

Taken from the Martin Lewis site:

 

Q: Is the law the same in Scotland?

 

A: Things are a little different in Scotland as the contract laws are not quite the same. Also anything decided by the High Court is only persuasive in Scottish law and will not result in a ‘sist’ of proceedings (equivalent to a ‘stay’ in the rest of the UK).

If you want more details on the specific law in Scotland, the Govan Law Centre is a very useful resource

[kog]

The following point is on one of the other threads I posted but I also strongly think this should be included in the above list.

 

why it is banks haver the right to access my account and take whatever charges they impose without my consent. Not even the government, or any other company have this privilage so why on earth do the banks get it, just because they look after our cash?

 

The banks should be made to send out a bill like any other company, and if the bill isn't paid then the bank should apply for a court oder to retreive the money.

 

THEY SHOULD NOT JUST HAVE THE RIGHT TO TAKE IT!

 

The very fact that banks just take money out of customers account for these charges and without sending a bill or having a court order can plunge many people into even deeper debt troubles.

[bobtail]

Very valid point kog

[Vital Spark]

Extremely valid, Kog, especially when they charge us for being overdrawn, often only because they have taken money from our accounts.

 

They charge us for unauthorised borrowing, so why can't we do likewise, since taking from our accoutns without our say-so is tantamount to borrowing without our authorisation?

 

They don't take our, or anybody's, money and leave it sitting in a vault. No. They invest it to earn fat profits for those who are sufficiently wealthy to get their banking free and can even afford to buy shares in the banks.

 

I don't mind anyone making an honest profit, in fact, I congratulate those who do but this is not an honest profit: this is, in true dyslexic fashion, Dooh Nibor: robbing the poor to give to the rich.

[nickyc]

Excellent work on the Charter - well done to all concerned

 

Fair point well made Kog! Perhaps something to incorporate into the Charter?

 

nickyc

[steven4064]

Some comments from another thread:

So, is that it then, it's £5?

 

http://www.consumeractiongroup.co.uk/forum/announcement.php?f=&a=108

 

I think £5 is a hostage to fortune. It might be about right for bouncing a cheque which is done manually, but for DDs and SOs which are done automatically the figure should be a tenth of that.

 

The cost to the bank of a customer going overdrawn is zero because they charge interest at nearly 30%.

 

Clearly these letters and our defaults do have a cost, but it is still far short of £5 and it's also less than 50p.

 

Data processing is cheap, somewhere in the order of between 0.2 to 0.6 of a penny per record or between £2 and £6 per thousand records if done by an external company - and remember, these companies also make a profit on that too. The banks do it in-house and therefore enjoy cost savings there.

 

Then, if the bank send a letter (many do not) the paper and the envelope have a cost, as does the postage. Paper is around £3 per thousand sheets and white DL window envelopes are £11.49 per thousand from a well known stationery supplier, so it is doubtful the banks pay anything like this for their paper and envelopes.

 

So the total cost per letter? Approximately 1½ pence for the paper and envelope, 34 pence for postage and maybe ½ a penny to process the data. They are printed, folded and inserted by machine at a cost of a fraction of a penny each again, as the process is fully automated.

 

There simply are not armies of operators sitting hunched over terminals keying in data all day to manually pay or decline cheques or DD's. Only in a small minority of cases does a person actually do anything - the vast majority of bounced payments are completely automatic.

 

I think that if we are allowing a "mark-up", the we are agreeing with the bank that it is ok to flout the law on penalty charges, and open the door to a very dangerous way. Let's say the sum is set at £5... For how long? 6 months, 1 year? Then it will go up again, and again, and again, and before you know it, voila, we're back to paying £20, £30, and guess what? It has been agreed that it was ok to apply a mark-up on penalties!

 

Talk of signing a pact with the devil...

 

In most business a 10-15% markup is acceptable, in retainling it can be 100%. So my estimate of 38p becomes 76p - let's go with that

[bob m]

Agree totally with Nic Sussex/Destiny of Souls. Re 6 year limitation on claims. Why? I have received 10 years worth of statememts from an account of 23 years, a restriction would affect any claim I may have.

No restriction would benefit everyone concerned, if a restriction is to be enforced we must negotiate the longest term possible.

Agree totally with Kog. bob m

[bobtail]

My Mortgage company doesnt charge me for sending out letters.

Egg dont send out letters at all unless you ask for them (they charge)

 

I think we can safely assume that banks dont charge you for sending letters out (YB havent sent me one in ages)

 

Indeed how much must it cost them to send out all that junk mail with offers?

[steven4064]

Indeed how much must it cost them to send out all that junk mail with offers?

And I'm certainly not going to pay for that!

[caro]

This has been posted on both Penalty Charges and MSE:

 

This is just one part of a cohesive strategy. Penaltycharges.co.uk is joining the CAG and MSE in working together on this. Collectively we aim

 

i. To officially request to be a party in the OFT case

ii. To lobby using the above charter to ensure a decent outcome

iii. To test whether the stay will actually hold in the courts. It is very doubtful it will

iv. Anything else that comes up - there is a meeting to discuss action very soon.

 

 

Bank Charges Consumer Charter

What's it about?

 

Below is a rough draft of a bank charges consumer charter, being worked on in conjunction with consumeractiongroup.co.uk and penaltycharges.co.uk. The aim is to create a petition (probably via the Govt website) to ask for the following key points to be incorporated in any settlement with the banks. This is a very rough draft; I wanted to open it for feedback and suggested improvements. Please remember this is deliberately a broad brush approach.

 

Martin

 

The Bank Charges Consumer Charter

DRAFT, DRAFT, DRAFT

 

The OFT and banks have agreed to go to the High Court to decide an case in principle. In the meantime a virtual moratorium has been put on reclaiming bank penalty charges. All the relevant parties should take on board the following Bank Charges Reclaiming Consumer Charter. We do not believe the moratorium should’ve been enacted, however it is important safeguards are put in place to protect consumer rights.

 

• New charge levels must apply to past as well as current customers. The bank charges settlement shouldn’t follow the OFT credit card ruling, which indicated a maximum £12 charge, yet omitted to infer that those who had previously been charged more should be allowed to reclaim it. When a new settlement figure is reached, customers must be allowed to reclaim all amounts above that for the prior 6 years. or earlier under the Limitations Act Section 32.

• Payouts should be made automatically, without request. Banks have taken money from their customers without asking; when the Courts rule these charges are unlawful, they should be made to pay them back without the need for customers to request it. If this does not happen, there’s been little benefit to consumers of this test case and moratorium.

 

• Repayments should include 8% statutory interest. Repaid charges should include interest at 8%, in an identical way to that applied for successful reclaimants in Courts. Better still the rate of interest charged on the overdraft, but perhaps the 8% could be allowed as a concession.

 

• All credit file defaults from penalty charges must be deleted. Banks must agree that all default records that have been placed on credit files due to unathorised overdraft charges/penalty charges should be wiped.

 

• The Consumer Groups behind this revolution must be represented. The lack of consultation with the three main consumer groups involved in bank charges reclaiming (penaltycharges.co.uk, consumeractiongroup.co.uk and moneysavingexpert.com) prior to the test case announcement was reprehensible. The relevant groups, who between them have helped millions of consumers, should be allowed to play a full part in any settlement and negotiation discussions.

 

• Bank charges should be stayed. The act of reclaiming bank charges has been put on hold while we await the high court decision. Considering the banks are estimated to have paid out over £500 million in penalty charge reclaiming so far this year; this tacit admittance of a problem means it is inappropriate to put a hold on those reclaiming, without putting a hold on the banks continuing to pay out.

 

• There should be an immediate moratorium on all default entries. During the period of the OFT litigation we require there to be an immediate moratorium on the placing of defaults on the credit record of any customers in respect of any sum which is comprised either wholly or substantially of charges. We will not accept the continuation of this practice under any circumstances.

 

• Five pounds is a fair maximum amount for bank charges. The banks have been charging £30 for bank charges, an amount that is totally disproportionate to their actual costs. Most generous estimates are that £2.50 is the appropriate cost, yet by allowing a five pound charge this gives banks the appropriate 100% mark up which is the typical reasonable markup f any other UK High Street business.I absolutely disagree with 5.00, as that would still be a penalty. Most banks don't send letters these days and according to CYNthesys the cost of the defaults is much less then 2.50.

 

Submitted by Martin Lewis of MoneySavingExpert.com, Marc Gander of Consumeractiongroup.co.uk and Stephen Hone of penaltycharges.co.uk

 

Don't forget this is a draft folks so please feel free to comment. I've added mine in red as some others have.

[steven4064]

• Five pounds is a fair maximum amount for bank charges. The banks have been charging £30 for bank charges, an amount that is totally disproportionate to their actual costs. Most generous estimates are that £2.50 is the appropriate cost, yet by allowing a five pound charge this gives banks the appropriate 100% mark up which is the typical reasonable markup f any other UK High Street business.I absolutely disagree with 5.00, as that would still be a penalty. Most banks don't send letters these days and according to CYNthesys the cost of the defaults is much less then 2.50.

I absolutely disgree too and even £2.50 is only reasonable if there is manual intervention, for example in handling a cheque. Automated transactions only cost pence.

[MacBoy]

I second the earlier poster about the pre-6 years. What are they going to do in the event of a settlement that is going to re-award them the protection of the Limitations Act that we contend is forfeit to them now?

 

Are we trying to re-write the Act? I bet Martin Lewis wrote that bit.

 

I think it's far too early to be drafting truces.

[mrsfoot]

My honest opinion of this is great work but a couple of questions!

 

This case could take years....will we then be hit with Limitations Act and be unable to claim back?? I know we have this covered but I would imagine this will be a section of the case that will be fought to the death over and therefore is something we need in writing before the case begins.

Will benefits / Social Security Admin Act being included? Or yet again will they be put to the back of the queue?

OFT should be working impartially...so why is there a ban on repaying the amounts and not on the charging of them? This point must be clafified urgently before the case begins to gain momentum.

[MacBoy]

Hi mrsfoot

 

What annoys me about this is that Martin, whom I admire greatly in a lot of respects, has taken it upon himself to speak for those of us fighting + 6year cases by trying to get an agreement together that would make it even more difficult to claim these charges.

 

You only have to listen to him on TV (it's the same set of catch-phrases every time and soon enough it will cycle round to the 'six year rule')

 

Yes he does an awful lot of good. But he shouldn't presume to speak for all of us as he does - we do not all agree with him on this.

[kog]

This case could take years....will we then be hit with Limitations Act and be unable to claim back??

 

Take a look at the following document

http://www.twoyou.co.uk/upload/direction_disp.pdf

 

the following is of particular interest.

 

(12) the firm must not take into account the period during which this direction is in place for the purposes of relying on any limitation period (or periods) or time limits within which complainants must:

(a) make relevant charges complaints;

(b) refer relevant charges complaints to the Ombudsman; or

© bring claims before the court; and the firm must not otherwise limit any redress that may be due to the customer, when complying with DISP or otherwise, because of the period of time this direction is in place;

[MacBoy]

That's fair enough kog and a great find too - well done!

 

However it doesn't protect all those people that now think they wil be unable to claim beyond six years, because Martin said so on Richard & Judy.

[kog]

Don't get me wrong MacBoy I hate the waiver and all it stands for. But if we have any chance of having it removed we need to understand it.

 

Know thy enemy!

[mrsfoot]

Thanks Kog, the fog is clearing!

 

"Keep your friends close, and your enemies even closer"

 

I have to admit I am not a huge huge fan of Mr Lewis, but he does lend himself to gaining publicity. We have to remember that he is able to get media coverage and this will help our fight for the consumer. Ok he may say obscure (my opinion) things at times we also have to realise some of what he says ends up in the papes as something else. We also have to remember he may be partially spearheading the fight, but we all know its not the spearhead that brings the meat home, its the armies that carry it on their shoulders!!!

[Vital Spark]

Yip, Mrs Foot. I'll be a foot soldier.

[Vital Spark]

Hi mrsfoot

 

What annoys me about this is that Martin, whom I admire greatly in a lot of respects, has taken it upon himself to speak for those of us fighting + 6year cases by trying to get an agreement together that would make it even more difficult to claim these charges.

 

You only have to listen to him on TV (it's the same set of catch-phrases every time and soon enough it will cycle round to the 'six year rule')

 

Yes he does an awful lot of good. But he shouldn't presume to speak for all of us as he does - we do not all agree with him on this.

 

Hmm, well said, MacBoy.

 

Perhaps YOU should write in to the relevant program and suggest this to them. Let them know that there are CAG voices to be heard as well as others who don't even meet here.

 

A wee note to Martin Lewis with your/our reservations and fears of his missleading our quest, as well, might not go amiss.

 

I, of course, leave it to the more able among us. It takes me screeds to expalin a small matter and hours to try to c orrect spelling (often unsuccessfully).

 

But I can send hugs and Xs to all those able folks who DO.

[muggyno1]

The Bank Charges Consumer Charter

DRAFT, DRAFT, DRAFT

 

The OFT and banks have agreed to go to the High Court to decide an case in principle. In the meantime a virtual moratorium has been put on reclaiming bank penalty charges. All the relevant parties should take on board the following Bank Charges Reclaiming Consumer Charter. We do not believe the moratorium should’ve been enacted, however it is important safeguards are put in place to protect consumer rights.

 

• New charge levels must apply to past as well as current customers. The bank charges settlement shouldn’t follow the OFT credit card ruling, which indicated a maximum £12 charge, yet omitted to infer that those who had previously been charged more should be allowed to reclaim it. When a new settlement figure is reached, customers must be allowed to reclaim all amounts above that for the prior 6 years. We should not be limiting this to 6 years. It's also a bit pointless to be saying what the ruling should not do, we should be putting together coherent arguments about what it must do.

 

• Payouts should be made automatically, without request. Banks have taken money from their customers without asking; when the Courts rule these charges are unlawful, they should be made to pay them back without the need for customers to request it. If this does not happen, there’s been little benefit to consumers of this test case and moratorium. The headline is absolutely correct.

 

• Repayments should include 8% statutory interest. Repaid charges should include interest at 8%, in an identical way to that applied for successful reclaimants in Courts. 8% is an arbitrary amount, more can be argued. What is vital, however, is that the banks must pay back all of the interest taken due to these charges and the 8% (or higher) applied to both the charges and the interest. This needs to be clarified.

 

• All credit file defaults from penalty charges must be deleted. Banks must agree that all default records that have been placed on credit files due to unathorised overdraft charges/penalty charges should be wiped.

 

• The Consumer Groups behind this revolution must be represented. The lack of consultation with the three main consumer groups involved in bank charges reclaiming (penaltycharges.co.uk, consumeractiongroup.co.uk and moneysavingexpert.com) prior to the test case announcement was reprehensible. The relevant groups, who between them have helped millions of consumers, should be allowed to play a full part in any settlement and negotiation discussions. I entirely agree. Has anyone looked at whether it is possible for us to be represented in the court case? Even if this is feasible, who would do the representing?

 

• Bank charges should be stayed. The act of reclaiming bank charges has been put on hold while we await the high court decision. Considering the banks are estimated to have paid out over £500 million in penalty charge reclaiming so far this year; this tacit admittance of a problem means it is inappropriate to put a hold on those reclaiming, without putting a hold on the banks continuing to pay out. This is one reason why it is inappropriate. Another is natural justice and a third the fact that the FSA is acting against its own charter by applying the waiver and unjustly penalising one side - the consumer.

 

• There should be an immediate moratorium on all default entries. During the period of the OFT litigation we require there to be an immediate moratorium on the placing of defaults on the credit record of any customers in respect of any sum which is comprised either wholly or substantially of charges. We will not accept the continuation of this practice under any circumstances.

 

• Five pounds is a fair maximum amount for bank charges. The banks have been charging £30 for bank charges, an amount that is totally disproportionate to their actual costs. Most generous estimates are that £2.50 is the appropriate cost, yet by allowing a five pound charge this gives banks the appropriate 100% mark up which is the typical reasonable markup f any other UK High Street business. Absolutely not not not!!!!! Firstly these are penalties not service charges. Looking at it in the way this paragraph does plays nicely into the Banks' hands and undermines the argument that these penalties are unlawful. They can only recoverwhat the breach costs them full stop. This is, in most cases, pennies.

 

Submitted by Martin Lewis of MoneySavingExpert.com, Marc Gander of Consumeractiongroup.co.uk and Stephen Hone of penaltycharges.co.uk

 

Does anyone have any idea what is happening with this charter?

 

Cheers

 

Muggy

[tnook]

Why does this charter read like a capitulation? I agree with all the changes proposed in the above post.

[muggyno1]

Hi tnook,

 

I have mildly butchered the document and put what might be a better version here if you want to have a look.

 

Cheers.

 

Muggy

[zootscoot]

Originally Posted by MacBoy

Hi mrsfoot

 

What annoys me about this is that Martin, whom I admire greatly in a lot of respects, has taken it upon himself to speak for those of us fighting + 6year cases by trying to get an agreement together that would make it even more difficult to claim these charges.

 

You only have to listen to him on TV (it's the same set of catch-phrases every time and soon enough it will cycle round to the 'six year rule')

 

Yes he does an awful lot of good. But he shouldn't presume to speak for all of us as he does - we do not all agree with him on this.

 

All the comments from this thread were forwarded to Martin on 4th Aug. Responses on penalty charges site were also forwarded.

[jules1973]

i agree with muggy1, the banks should not be making a penny from our charges (therefore I dont agree with a £5.00 charge), they should charge us exactly what it cost them, and not a penny more. they are either lawful or unlawful, they should not make a profit at our expense.