Wednesday, Nov 25, 2009

Court rules in favour of Banks

BBC: Banks win Supreme Court case on overdraft charges

A Supreme Court judgement has struck a grievous blow to the hopes of millions of bank customers to be refunded billions of pounds in bank charges.The court has overturned earlier court rulings that allowed the Office of Fair Trading to investigate the fairness of charges for unauthorised overdrafts. The decision follows more than two years of test case litigation.

Posted by jack c @ 09:54 AM (2107 views)
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28 Comments

1. tenant super said...

I am in two minds about this as a reformed debtor! I could probably claim a few hundred pounds back from the charges I run up when I was in my first job as a graduate. I learned my lesson and never incur charges now and haven't for some 4 years! But if this were to result in account fees (and we are one of the few countries to have 'free' current accounts), though I'd enjoy a little windfall, in the long run I would be worse off if I had to pay for banking.

The system is unfair as the people most likely to incur charges are those too poor to be able to keep a prudent reserve (this is my strategy - I always keep a £200 buffer in my account in case I'd forgotten about any direct debits etc.) But then looking at that vile creature, Liz Jones with the homeopathic vets for her chickens, it is people like her incurring these penalties and she's not on a low income - she's a sickening spendthrift.

We all moan about the banks but they're a business and should be allowed to maximise their profits as they see fit. What was wrong were all the bailouts. If it's the free market argument that "we're an industry not a charity" as one bank spokesperson said recently, then they should not have had state support.

Wednesday, November 25, 2009 10:46AM Report Comment
 

2. tyrellcorporation said...

A lawyers bonanza...again!

Wednesday, November 25, 2009 11:17AM Report Comment
 

3. a saver said...

The system of charging £25 for every transaction when you go into unauthorised overdraft is outrageous.
I did this accidentally when I was just back from abroad and didn't have regular income going into my current account.
Yes, bad management, as I could have transferred money from savings, but I had clocked up £100 worth of charges (by spending only about £50) before I found out. I phoned HBOS and managed to get half of the charges scrubbed but only on threat of withdrawing all of my business (remember the good old days when it seemed fairly safe to have all your dosh in one UK bank instead of 8?)

Wednesday, November 25, 2009 11:34AM Report Comment
 

4. sold out said...

What a surprize.
1 Banks charge outrageous overdraft fees for years and where quite rightly challenged by customers and consumer bodies.
2 Court Case won by consumer's on two occasions (and rightly so in my opinion).
3 Banks go bust and are nationalised
4 consumer's bails out banks and will pay for years.
5 Ruling overturned by supreme court in Banks favour.

Another Win, Win Win for the banks.

This is outrageous and sickening.
But where is the outrage and anger on the streets?

Wednesday, November 25, 2009 11:57AM Report Comment
 

5. Rmbs_trader said...

To be fair, this ruling does not come as a surprise as the case mainly revolved around whether conceptually it is ok for a bank to charge you at all for borrowing money from them when you have not arranged it, ie borrowing beyond your agreed limits.

Whether that charged should be £10, £25 or £100 was not, I believe, covered in this case. Insteead it was a matter of law as to whether they should be charged.

In that case, the charges themselves are 'fair' (the £ is a different discussion) - the alternative being you should simply have been denied the ability to pay when you went over the limit. Perhaps that would be better, but it has never been the popular choice.

Personally, I am more interested to see case law on the enforcement of early repayment charges.

Wednesday, November 25, 2009 12:09PM Report Comment
 

6. Crunchy said...

4, If strong leaked evidence supporting rigged Global Warming data that the BBC hasn't broadcast after knowing about it for weeks now, there is little that will. No wonder we are in the seemingly uncontrollable GLOBAL mess we find ourselves in. The justice system seems to be, in my humble opinion, ran by the waged weak and the corrupt global capitalists.

Let's see whether this major global taxation fraud is PROPERLY investigated.

Wednesday, November 25, 2009 12:31PM Report Comment
 

7. nomad said...

In every other business transaction you get your bill, peruse it for credibility and then pay. Very different for the banks because they hold your money.

Charge and grab!

And what's this Supreme Court? I thought that was a US institution.a

Wednesday, November 25, 2009 12:31PM Report Comment
 

8. sovietuk said...

But should there be so much lending in the first place? Or should lending only be provided to people who have a long track record of sensible behaviour with respect to money matters? The "small cash buffer" argument is quite a strong one and most of the fees being scrutinised relate to bad organisation on behalf of individuals. On the other side of the argument banks morally are on a sticky wicket at the moment with you and I and your childen and my children essentially being asked to prop them up because they were reckless and under capitalised in the first place. Buck I'm afarid stops at the door of the politicians for providing the environment for the shambles to nuture and grow in the first place.

Wednesday, November 25, 2009 12:37PM Report Comment
 

9. Geoffk said...

I have never had to pay a charge because i respect the fact that if i go overdrawn i will have to pay for taking money that does not belong to me.. today is a good day for sensible people,.why should i pay for having a bank account just because people do not respect the fact that it is not their money to spend.

Wednesday, November 25, 2009 12:48PM Report Comment
 

10. rumble said...

If it's an unauthorised overdraft, why is it authorised? If the balance reaches £0 the bank should disallow the transaction. Oh, right, by allowing the transaction they get to charge a fee. Reminds of a train fine I received: company employee tells me I can buy a ticket on the train, but no one shows up to sell me a ticket. I get off and get fined. I email them and get told that one can buy tickets on board, but if no one shows up to sell you a ticket you will have to pay a fine. Wtf?!? These companies are simply using entrapment to make profits.

Wednesday, November 25, 2009 01:18PM Report Comment
 

11. krustyatemyhamster said...

@rumble
"If it's an unauthorised overdraft, why is it authorised? If the balance reaches £0 the bank should disallow the transaction. "

Exactly. Why don't the banks charge themselves for allowing the overdraft? Oh, wait, they deliberately authorised it just so they could screw someone out of their cash.

Biggest gangster wins society.

Wednesday, November 25, 2009 01:31PM Report Comment
 

12. timmy t said...

Only in the UK could the Office of FAIR TRADING not be allowed to investigate whether TRADING is FAIR...

Probably breaches the 11th commandment - thou shalt not do anything which might be to the detriment of banks...

Wednesday, November 25, 2009 01:36PM Report Comment
 

13. i remember the 90`s said...

Get over yourselves ,the charges are in the terms ,its up to the account holder to manage their money .

Wednesday, November 25, 2009 02:24PM
 

14. letthemfall said...

In the end this is all about the power of the banks. They impose unfair charges on those least able to afford them - low incomes and poor financial knowledge and management skills - while making enormous profits, all the while underwritten by the very people they are stinging. Yes they are businesses, but why should they make their money so easily in return for so little. Several contributors here tell us how efficiently the private sector works. I don't see much value for money in the financial sector. This all bodes ill for the future.

Wednesday, November 25, 2009 02:53PM Report Comment
 

15. rumble said...

@I remember.... I've never been charged for this, so am not speaking for myself. If it's in the terms it's ok? I think it's slimy at best. It's effectively a loan, why not charge loan rates? Or disallow the transaction? It's clear that many people live on tight cash supplies and can easily slip to £0 when half the business world dips into your account at will. The banks are well aware of this, and the opportunity to increase profits. Just like the companies who say "Untick this box if you do want to receive email from us and all our chav relatives." The idiots then describe themselves as shrewd when someone with a life skims over it, perhaps stupidly, expecting the company to play straight - I have another word for them.

Wednesday, November 25, 2009 02:54PM Report Comment
 

16. sold out said...

Its in the terms is it?
So that makes it ok to increase the charges to maximise profits does it?
And where can you go if you don't like "the terms" another bank?

All the banks knew they was on to a good earner and hiked the charges accordingly, whilst at the same time rigging the system to make it more likely to happen. (go overdrawn).

Why is it that a credit card is refused if you reach your limit, but a debit card happily chugs along being accepted everywhere?

Wednesday, November 25, 2009 03:21PM Report Comment
 

17. timmy t said...

i remember@10 - it was up to the banks to manage their (our) money too, but they didn't do too well did they? Difference is they expected to be bailed out by us to stop them going to the wall, yet they will happily send others bankrupt without lifting a finger to help. We're not talking about the odd tenner for a letter, we're talking about victimisation, preying on those least able to defend themselves. I'm lucky enough to have a bit of a stash so they treat me nicely. I have only incurred fees once due to an error, and they happily waived it. They only look after the ones they don't want to lose.

Wednesday, November 25, 2009 03:26PM Report Comment
 

18. sold out said...

£35.00 charge for borrowing 80p for 24 hours. Thats what mrs sold out got charged for her one accidental incident of "missmanagement".

You get better rates from a Loan Shark.

Wednesday, November 25, 2009 03:46PM Report Comment
 

19. doomwatch said...

I agree with rumble @7. Entrapment or drugs pushing.

If this was France, there'd be overturned cars burning in Paris now and the big metal doors of banks welded shut. Here, the apathetic British slaves get what they dererve.

Wednesday, November 25, 2009 03:50PM Report Comment
 

20. krustyatemyhamster said...

But how else are banks expected to make money? They'd have to think up some clever scheme whereby they lend at higher interest rates than they pay on the money deposited with them in order to cover costs and create a margin. But what would happen to house prices?

Wednesday, November 25, 2009 03:54PM Report Comment
 

21. jallan said...

I am in favour of a reasonable monthly charge for a bank account, just like internet access. If ISP's used the free banking model, we would all have free internet access, they could part fund it by charging the most vulnerable people in the UK 35 pounds every time they breach there download limit. The reality is free banking is a luxury for the better off and 33% of the banks profits are being paid for by pensioners, the disabled, the unemployed, single parents, students and minimum wage workers.

Wednesday, November 25, 2009 04:15PM Report Comment
 

22. shipbuilder said...

What's everyone moaning about? It's a free market with plenty of competition - you just move your money to the bank that doesn't charge overdraft fees, don't you?

Wednesday, November 25, 2009 04:30PM Report Comment
 

23. sold out said...

Just been reading a bit more about this.
It seems the banks have been able to get this ruling based on their argument that the OFT are not allowed to make an assessment on whether bank charges are fair or not.
This is more serious, not only do the banking cartel get away with it and don't have to pay the money back, but this ruling means they can charge what they like in the future for anything they like.

What a disgrace.

Wednesday, November 25, 2009 05:57PM Report Comment
 

24. tom101 said...

Really feel sick at how the banks have created such division in our society. Savers vs Risk takers. (Check out the comments on related articles in telegraph and times). There's a time for saving and speculating (to a degree). Arguments like 'You shouldn't spend what you don't have' vs 'you try living off 12kpa!' whilst banks are unsurprisingly charging exorbitant fees. All because we let them.

Social respect and responsibility has completely eroded. Personally I try to treat others how I want to be treated. Running my own company I have LOST REVENUE by pointing out when work has not been needed, whereas competitors steam in charging usually more and wasting clients money. This attitude needs to change.

You have to leave you computers, tv's, housepricecrash site to protest guys.... Anyone here EVER demonstrated in their lives. I haven't, but I'm feeling the urge.

Wednesday, November 25, 2009 06:42PM Report Comment
 

25. shipbuilder said...

tom101, clearly you need to get with the programme - as many on here will tell you, business is about making money, nothing else. Social responsibility only applies to the consumer. It's what is best for the economy and as we all know, what is good for the economy is good for us all.

Wednesday, November 25, 2009 08:20PM Report Comment
 

26. tom101 said...

shipbuilder, Sorry I'll make the effort to rip someone off.

Wednesday, November 25, 2009 09:02PM Report Comment
 

27. wiltshire said...

"If the campaigners win, it'll spell the end of free banking". In terms of propaganda that's nearly as good as the claim the UK was 45 minutes from Sadaam's missiles.

Do people really believe the banks would wait for a moment to end free banking if they thought they could get away with it? They are the greediest, most manipulative businesses on the planet and we're supposed to believe that they're playing fair free banking is concerned.

I agree that many people in this country should have a bit more responsibility where spending is concerned. However it'll never happen because neither the government nor the banks are interested in people being responsible. Infact arguably, without the reckless the banks wouldn't have proved to themselves they're untouchable and Gordon Brown wouldn't have been able to convince half the population that he's (in his own mind (and theirs)) the saviour of capitalism. It's quite surreal the situation this country has got itself into.

Wednesday, November 25, 2009 11:03PM Report Comment
 

28. letthemfall said...

I now understand what the trickledown effect really is - being p****ed on from a great height.

There has never been free banking. How much interest does your current account pay? How much does the bank lend it out for?

Thursday, November 26, 2009 11:52AM Report Comment
 

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