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Saving For a Space Ship

Student Sends In Baliffs On Lloyds Bank For Bank Charges Court Win Fee

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http://www.manchesteronline.co.uk/men/news...t_the_bank.html

In the above article and on todays BBC North west news at 1.30, they had an interview with Brian Mullen a student who took LLoyds bank to court for very large and unfair bank charges over bounced payments. Lloyds did not turn up in court to defend the action, so Brian got a judgement in default, meaning the bank have to pay up.

However, they still have not paid up and Brian has just sent in the baliffs.

It looks to me like Lloyds did not turn up to avoid a legal precedent being set and non payment may be a related tactic.The BBC stated a precedent had not been passed as it had not beed discussed in court.

The banks make an alleged 40% of their profits by bank charges, so the matter is very important to them.

From a related article in Feb 06 "Students warned over bank charges" http://news.bbc.co.uk/1/hi/scotland/4722288.stm a bank representative had the cheek to try and justify the charges of around £35-39 as legitmate due to a human decison, whereas it is believed the true cost is approx. 50p. £5 would seem a fair max. fee.

I see bank charges as a tax on the poor and have had personal experience of a bank having a 'profit feeding frenzy' of being very inflexible on charges when a person has cash-flow problems. IMO, it's one of the factors that pushes already very stressed debt -laden folks over the edge into depression, despair and possibly bankruptcy or suicide. Its akin to kicking someone when they are down for maximum profit.

I have always advised people to set up & use another bank account when banks start behaving in this way with charges. IMO, there my be case for complaining against the use of the phrase 'free banking' as they tag on the line of 'for customers in credit'. It seem a mis-representation when an often poor or disorganised person is charged around £39 up to 3 times a day for going £1 over their limit, to allow this 'free banking'.

If the banks are going to behave this way and they bounce a cheque /dd on you. I suggest sending them a draft letter from the link below, stating the alleged overcharging & related legal history.

Should they not reply, do an online money claim (small claims court) for £25 http://www.hmcourts-service.gov.uk/onlineservices/index.htm and charge them for your time & expense at a similar rate to what they allege it costs them, ie £500 to £2000, so if they do not reply and you get a judgement in default, they will have to pay this amount or face the baliffs to take goods. This may force them to address the issue.

From: http://www.glasgowstudent.net/advice/bankcharges/

"Results of our survey showed that many of you are being charged when a direct debit, standing order or cheque payment is honoured by the bank even although there’s not enough money in the account to cover it. For the letter which covers this situation:"

http://www.glasgowstudent.net/files/src_pa...d_bc_letter.doc

For those times when the bank refuses to honour the payment, and still charges you anyway, the letter is slightly different :

http://www.glasgowstudent.net/files/src_pa...ed_bcletter.doc

Forum discussion on this Lloyds story from the litigant himself http://www.bankactiongroup.co.uk/forum/viewtopic.php?t=1762

Excellent Forum on campaign against bank charges http://www.bankactiongroup.co.uk/forum

Mods, I believe this thread is relevant to debt, banks & borrowing, but move it after it has some exposure if you wish.

Edited by Saving For a Space Ship

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I was told some years ago of something similar with what was the Midland Bank, now HSBC.

A supplier, 1 man band had for months been trying to get paid for some work he did. They didnt pay him, he was constantly fobbed off with its at head office, they are sorting it.

In the end in desperation he issued a petition for Bankruptcy having repeatedly invoiced them.

The bill was for around 10k but Midland had to turn up at the court with their company records carried by an army of accountants.

They obviously had to pay the bill, ordered by the court, but the inconvenience of having to get all the records together, and having staff turn up in court was not good, but in addition rumour spread around the city that Midland had a petition for Bankruptcy against them wiping millions off the share price.

If its a true story, how brilliant!!!.

BTW it was a fund manager that told me this, in a pub.

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After a bit more research I've found these excellent links

Organised group to fight charges - www.BankActionGroup.co.uk

Forum for group www.BankActionGroup.co.uk/forum

Site dedicated to fighting charges allied with above group http://www.bankchargeshell.co.uk/

Money Saving Expert.com advice on subject

http://www.moneysavingexpert.com/cgi-bin/v...141050760,24632,

Similar article & another version of a letter to send to banks re: charge refund

http://www.thisismoney.co.uk/saving-and-ba...77&in_page_id=7

Edited by Saving For a Space Ship

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Guest Charlie The Tramp

I was told some years ago of something similar with what was the Midland Bank, now HSBC.

A supplier, 1 man band had for months been trying to get paid for some work he did. They didnt pay him, he was constantly fobbed off with its at head office, they are sorting it.

In the end in desperation he issued a petition for Bankruptcy having repeatedly invoiced them.

We did the same thing with a big national construction company in the early 90s. An outstanding invoice for £1500 was overdue by 4 months with no satisfaction from letters and telephone calls. After sending a letter informing them we would seek a petition for bankruptcy against them together with our costs if payment was not received in 7 days. A cheque for full payment was received two days later. Glad we did, as a month later they filed for insolvency owing £20 million to their creditors. :)

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I see bank charges as a tax on the poor and have had personal experience of a bank having a 'profit feeding frenzy' of being very inflexible on charges when a person has cash-flow problems.

While I have no sympathy for banks making millions of pounds every day, there is something to be said for living within your means and financial planning.

There are a great many 'poor' people who can do this and therefore don't incur these painful charges. Similarly there are plenty of well off and feckless types who don't take the trouble, or have enough money not to let it trouble them.

Many current accounts now come with grace periods, permitting minor indiscretions without incurring swingeing penalties. It can pay to shop around.

To run up £2000 in bank charges is no mean feat even as a student.

Would you trust him with your accounts?

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While I have no sympathy for banks making millions of pounds every day, there is something to be said for living within your means and financial planning.

There are a great many 'poor' people who can do this and therefore don't incur these painful charges. Similarly there are plenty of well off and feckless types who don't take the trouble, or have enough money not to let it trouble them.

Many current accounts now come with grace periods, permitting minor indiscretions without incurring swingeing penalties. It can pay to shop around.

To run up £2000 in bank charges is no mean feat even as a student.

Would you trust him with your accounts?

The real problem is they break their own rules at their own discretion and then impose a fee. If my bank balance is empty then I expect that they will bounce at that point and not pay any standing orders. I am not given the choice to make this decision. I have had this happen about 3 times in 8 years and each time they incurred a fee - they revolked it each time as I rang but it costs about a quid to bounce a transaction and let me know they have done so through automatically generated letters. It probably costs my creditor about another quid in automatically generated letters etc. but they don't charge! I can live with the level of embarrassment, but I am not given the choice.

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I have had this happen about 3 times in 8 years and each time they incurred a fee - they revolked it each time as I rang but it costs about a quid to bounce a transaction and let me know they have done so through automatically generated letters. It probably costs my creditor about another quid in automatically generated letters etc. but they don't charge! I can live with the level of embarrassment, but I am not given the choice.

One of my gripes - a lot of modern day banking is innately dishonest. There was a time when a real person would spend real time writing to chase up such a situation, now the automated letter - charge equivalent the same. Also look at electronic/card banking - instant transaction, no cheques, no processing and send of cheques forward to antoehr bank, yet there are delays of days some times for money to transfer. Effectively it is skimming excessive money out of accounts.

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One of my gripes - a lot of modern day banking is innately dishonest. There was a time when a real person would spend real time writing to chase up such a situation, now the automated letter - charge equivalent the same. Also look at electronic/card banking - instant transaction, no cheques, no processing and send of cheques forward to antoehr bank, yet there are delays of days some times for money to transfer. Effectively it is skimming excessive money out of accounts.

I totally agree. Modern banking practice is totally shameful. As someone who believes in an afterlife I wonder what the temperature of some financiers will be!! :o

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I think the key here is the concept of the 'critical consumer' which unfortunately most people aren't.

The reality is that banks make money by screwing people who allow themselves to be taken advantage of through financial ignorance or carelessness. Banks make money as financial institutions as when someone signs up for a new account they take on liabilities i.e. on overspending penalties etc. which are of benifit to the banking institutions.

Many examples exist of how savy 'critical consumers' can make money through the banks lending practices i.e. 0% interest for 6 months loans invested in high interest accounts elsewhere, but those with the consideration to take advantage of such practices are few and far between.

A 'critical consumer' understands the rules of engagement and where the banks take unfair advantage they should be prepared to be as difficult as possible i.e. media, legal action etc. because the banks will always take advantage of the consumers where possible. To them you are almost certainly a number and not a name (think the prisoner).

They ARE trying to screw you (its actually their business plan)... THEY do make enough money already (HSBC posted record profits recently)... YOU have accepted the terms and conditions (you may not remember this, the banks do)... YOU have the power to not be a contributor towards the bank managers next holiday (stop spending start saving)... BE a critical consumer!

- Pye (Property Speculation Ninja :ph34r: )

Edited by pyewackitt

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http://news.bbc.co.uk/1/hi/england/manchester/4810490.stm

UPDATE: The bank paid up!, presumably to avoid a possible legal precendent (and the baliffs :) ). The downside for me is that they avoided facing the music in court. However, this may not be far away, judging by the momentum and support at the bank /cc charges forum is building. They supported the litigant suing LLoyds and at some point a bank will be forced to test the law.

http://www.bankactiongroup.co.uk/forum

Its specifically discussed here http://www.bankactiongroup.co.uk/forum/vie...er=asc&start=15

The forum has only been going 2 months and seems to have similar causes & aims to Hpc.co.uk, I think we should support them. They are organised with a section for each bank on the forum.

It was also discussed at length on BBC's working lunch today - re-watch it here http://www.bbc.co.uk/bbctwo/programmes/?id=working_lunch

They are also doing an online debt test

http://news.bbc.co.uk/1/shared/spl/hi/busi.../html/index.stm

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The real problem is they break their own rules at their own discretion and then impose a fee. If my bank balance is empty then I expect that they will bounce at that point and not pay any standing orders. I am not given the choice to make this decision. I have had this happen about 3 times in 8 years and each time they incurred a fee - they revolked it each time as I rang but it costs about a quid to bounce a transaction and let me know they have done so through automatically generated letters. It probably costs my creditor about another quid in automatically generated letters etc. but they don't charge! I can live with the level of embarrassment, but I am not given the choice.

Are the banks breaking their own rules?

The overwhelming majority of current accounts will charge hefty fees for unauthorised borrowing or for bouncing payments, including standing orders or cheques and these will be laid out in the terms and conditions that you have to sign up to when opening the account. It may be nice to think of a bouncing payment generating little cost to the bank, but if they bounce a payment and then charge you the agreed, if exorbitant fee, then they are not breaking any rules. Don't 'expect' them to do anything that isn't explicit in the small print!

Most will charge exorbitant amounts if items or paid or unpaid, so either way it is very bad news. The banks may also consider that some items such as debit card transactions or guarenteed cheques are 'forced to be paid.' Similarly when you enter agreements with mobile phone networks, utilties, subscription services and other enterprises, they will come with their own lengthy sets of terms and conditions, including more exorbitant fees for bouncing or missing payments.

Of course all these contracts are subject to discretion; if you only transgress once every 32 months they may well decide it is preferable to waive the charges and retain your goodwill; but this is not necessarily an admission that they have broken their own rules. Some current accounts even have grace periods or provision for a limited number of transgressions in their terms and conditions.

There are laws, aimed especially but not exclusively at loan sharks, against unfair terms and charging extortionate rates, but we are talking more about 100%+ interest p.a, than £30 fees, ostensibly for writing snotty letters.

I totally agree with the point about delaying payments and transfers. I can withdraw cash one one ATM, walk across the road and get a statement 2 mins later, with the withdrawl already deducted from my account. Yet transfer money by direct debit using the phone or internet and it takes 3 working days to appear at the other end.

It is very much buyer beware out there....

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I've not seen what the student was studying.

Do you think he was training to be an accountant or a lawyer?

Having never suffered bank charges due to keeping accurate independant track of current accounts I am in no position to offer comment. Other than if you keep a track of what you have got and what you have spent its not so difficult to avoid charges. (and before someone jumps on their soapbox yes I have scrimped to the last penny on a naff wage with family to support), but still no "oops well the cash machine said I still had £50 so I spent it again, and now they are charging me for spending their money the bar stewards".

It is their money and you are spending it and you signed the t&c. Any more to it than that?

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I've not seen what the student was studying.

Do you think he was training to be an accountant or a lawyer?

Having never suffered bank charges due to keeping accurate independant track of current accounts I am in no position to offer comment. Other than if you keep a track of what you have got and what you have spent its not so difficult to avoid charges. (and before someone jumps on their soapbox yes I have scrimped to the last penny on a naff wage with family to support), but still no "oops well the cash machine said I still had £50 so I spent it again, and now they are charging me for spending their money the bar stewards".

It is their money and you are spending it and you signed the t&c. Any more to it than that?

On a bit of a high horse there!

I too have never been charged or gone overdrawn. But I have to take a more empathic view of my poor, fallable fellow human beings.

Carelessness or sheer incompetence cant justify the banks profiteering. They are a greedy shower.

They stretch out transaction times (how does electronic transfer of money, or indeed cash payments at the desk take 5 days to clear?) to increase their chances of getting the chance to charge you.

Edited by geneer

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Sorry about the high horse moment, but I do stick by it.

I have full sympathy for anybody who by accident fall foul of the rules but not keeping track of the money they have?

Do they really trust the banks that much not to make errors?

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Maxine Richard, who lives with daughter Tiahnna on £97.60 a week, went overdrawn by £41.19 for two days - and was hit with a £68 charge by Alliance & Leicester bank. That works out at 70% of her weekly income

http://money.guardian.co.uk/saving/banks/s...1733386,00.html

"I was devastated by the £68 fine. It wiped out my shopping for a week. I skipped meals and ate a lot less at other times. Tiahnna missed her teatime meal after school. It was food or the rent," she says.

Maxine is not alone. Millions of bank account and credit card holders who go beyond their overdraft limit or are late with repayments (it can be by as little as £1 for one day) are hit with fines each year, adding up to an estimated £2bn.

But many are fighting back, since Guardian Money revealed the charges could be challenged in court. Websites such as those from bankchargeshell.co.uk and bankactiongroup.co.uk offer instructions and the banks seem reluctant to defend these actions. Most concede on the court steps rather than risk losing.

Earlier this week, Stockport accountant Brian Mullen, 29, recovered £2,000 in contested penalties paid to Lloyds TSB when the bank did not turn up to defend a small claims court action.

Last month, Gary Clay won back just over £2,000 from Nationwide when the building society conceded the case hours before the court was due to sit. And there are many others.

The legalities pivot on whether the charges represent the real loss to the bank or are a penalty charge intended to deter customers. Most banks maintain the fees - up to £38 a time - are real costs. This is disputed by campaigners. But some argue privately the fines keep customers disciplined.

ABOVE IS EXCERPT TAKEN FROM ARTICLE-QUOTE AND BOLD THINGY NOT WORKING

Edited by Baz63

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"Banks face legal challenge over £3bn penalties on overdrafts "

http://business.guardian.co.uk/story/0,,1713395,00.html

He is prepared to go bankrupt if necessary like the Mc Libel legal pair did to prove the case. IMO, the momentum this is reaching will affect HPC as the banks make 40% of their profits from charges, so these will be hit as this anti-bank charge lobby snowballs. Banks will then increase charges to other customers like homeowners to maintain profit levels.

The litigant, Stephen Hone's own website detailing his crusade against 8 banks & their excessive charges on accounts, cc's & store cards. http://www.penaltycharges.co.uk/

'Eight of Britain's biggest high-street banks including Barclays, HSBC, Lloyds TSB and NatWest will face an unprecedented legal challenge today. The action could end the lucrative penalty fees imposed on account holders who exceed their overdraft limits, estimated to bring in up to £3bn a year to the banks.

It could also allow bank customers to claim refunds of past penalty payments for up to six years. Banks typically charge up to £38 if they bounce a cheque - a sum that can be repeated if the cheque is re-presented - plus monthly service charges of up to £10. If an unauthorised overdraft crosses into a second calendar month, the £10 service fee is often repeated.

Stephen Hone, 29, a law student from Plymouth, Devon, and a member of the anti-charges Bank Action Group, is seeking a "declaration" from the high court that the banks' imposition of penalty charges is unlawful. Mr Hone's targets are Alliance & Leicester, Barclays, Co-op Bank, Halifax Bank of Scotland, HSBC, Lloyds TSB, Nationwide building society and NatWest.

"I am seeking a legal declaration from the courts that the contractual terms and conditions which the banks use to justify these penalties are unfair under the unfair terms in consumer contracts regulations 1999," said Mr Hone. "This case is not about reclaiming money.

"Customers have taken banks to the small claims court over penalties, generally winning because the banks settle on the courtroom steps," he said. "Instead, rather than all these piecemeal actions, I want the courts to settle the legal basis of this once and for all. This case is in the public interest."

The legal argument will revolve around whether banks can charge more than the real costs incurred when a customer passes an overdraft limit. One bank has told the Guardian that the charges are needed to "discipline customers who would otherwise have free rein".

Mr Hone realises he is taking on the combined firepower of the major banks. "This could be the biggest legal case the banks have ever faced and I am aware of the difficulties if I lose. But I have no assets, am willing to go bankrupt and I shall be legally aided. I already have a solicitor and barrister ready."

20th Feb 06

Edited by Saving For a Space Ship

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http://www.manchesteronline.co.uk/men/news...t_the_bank.html

is this why the banks have recently increased their penalty charges,£39 if you go a penny over your limit with one bank.this must be in antisipation of slashing it by say 80%!

i have been hit with many charges over the last 6 years but have managed to avoid them in the last year or so thanks to internet banking and juggling between acounts.then it was only £20 a pop,but it has a snowball effect as their penalty charge puts you more into the red and you get another charge the next month.

apparently under the freedom or information law or something you can demand six years worth of receipts for max cost of £10 or £20 ! so don't take any of their £5 per statement nonsense.

if everyone claims back 6 years worth of charges it'll cost the banks a fortune,but then again it's money they've dipped into your account and just taken.seems strange that with any other company they send you a bill and you then have to pay it or not depending on wether you actually owe it,but with banks they just take it!!!

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • up 5%



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