Banks win Supreme Court case on overdraft charges

[Mekrel]

The only thing I don't get with bank charges is what are they really for?

I believe banks say it's cost of admin and lending the money that's not been agreed, but the last time I went overdrawn was when a large sum of money was taken out of my account fraudulently.

They were really quick in cancelling the oncoming charge with no hassle what so ever. Surely if it was cost of admin and lending - it would have taken a few weeks for them to clear it and I would have been charged and then refunded?

Seems more of a fine to me and an easy way to make more money?

 

[gambitt]

Seems more of a fine to me and an easy way to make more money?

Of course it is! Banks, like most other businesses are only interested in money and how to get more money. They will dress it up with double talk about customer service and making a difference but this is all a means to an end - money.

 

[Matteysan]

Thats the thing i didnt have an overdraft.
Somehoe a transaction got authrorised when it shouldn't have.

Same thing happened to me when I was 17 banking with Natwest.

 

[Meaker]

But I got charged for not even borrowing money, just rejecting an request (I did not even get a letter since i'm paper free, just email). £35 I might add. How is that fair?

All their computer did was say no, how do they justify billing me £35 for that? The charge has to cover the expenses incurred to the bank due to my claim (about a nano second of computer time) and no more as they are not allowed to fine you (only the government can do that).

 

[cymatty]

I'm not asking for your sympathy, I couldn't give two *****. I have plenty of money, but then again so do banks. I think HSBC made £800m profit last year. That's a lot of bubbly at the investors party.

HSBC has reported a 62% fall in profit for 2008, to $9.3 billion (£6.5 billion).

Hopefully more this year as well, go share price.

 

[Tute]

/shrug

It's not over by any means anyway.

 

[Hairybudda]

But I got charged for not even borrowing money, just rejecting an request (I did not even get a letter since i'm paper free, just email). £35 I might add. How is that fair?

All their computer did was say no, how do they justify billing me £35 for that? The charge has to cover the expenses incurred to the bank due to my claim (about a nano second of computer time) and no more as they are not allowed to fine you (only the government can do that).

They're allowed to charge you that because you requested an instant overdraft and as per their price list it is how much you pay for that. You signed a contract with the bank agreeing to this, so you have no recourse.

Disproportionate? Sure! Can you challenge that? Nope, not with the latest blow. Think of it as your contribution to the free banking system most people have but only people who barely scrape by have to pay for.

Fortunately most banks are lenient enough to write off one charge a year which is about what your average person gets a year.

 

[singist]

So ...... let me get this straight; the banks **** up and mismanage their finances by billions; using loads of money that they don't actually have and ....... we give 'em money to help 'em out.

If we **** up by a few quid, we get charged a disproportionate penalty charge .... Yeah! I see how it works now.


And why are all those perfect people out there prepared to just roll over and pay whatever the nice banking person says when talking about charging for ATMs or account charges? are you all just total wimps? ..... vote with your feet.


Most people are in the black and get little or no interest yet the nice banking people are using their money to lend at a squillion percent interest and still asking for a fee .... are these people who live in ivory towers absolutely ******* mad as well as spineless wimps?

 

[Wicksta]

lol students

 

[cymatty]

lol students

I know, there is so much wrong with his/her statement.

 

[Vonhelmet]

So ...... let me get this straight; the banks **** up and mismanage their finances by billions; using loads of money that they don't actually have and ....... we give 'em money to help 'em out.

You didn't give them any money. The government gave them money which just happened to have been yours at one point in the past.

If we **** up by a few quid, we get charged a disproportionate penalty charge .... Yeah! I see how it works now.

Yep. If you violate the terms of the contract you have with them, they penalise you.

And why are all those perfect people out there prepared to just roll over and pay whatever the nice banking person says when talking about charging for ATMs or account charges? are you all just total wimps? ..... vote with your feet.

The only ATMs that charge these days are the little toy ones they have in newsagents, and the only account charges I pay are for an agreed overdraft to avoid this sort of nonsense.

Most people are in the black and get little or no interest yet the nice banking people are using their money to lend at a squillion percent interest and still asking for a fee ....

A squillion percent, eh? I'm curious to understand the disconnect between interest rates on opposite sides of the counter.

are these people who live in ivory towers absolutely ******* mad as well as spineless wimps?

Who are you referring to? The banks can charge what they like as far as I'm concerned - I'm taking reponsibility for my finances so that I don't get charged. If that puts me in an ivory tower then so be it.

 

[Dolph]

So ...... let me get this straight; the banks **** up and mismanage their finances by billions; using loads of money that they don't actually have and ....... we give 'em money to help 'em out.

If we **** up by a few quid, we get charged a disproportionate penalty charge .... Yeah! I see how it works now.


And why are all those perfect people out there prepared to just roll over and pay whatever the nice banking person says when talking about charging for ATMs or account charges? are you all just total wimps? ..... vote with your feet.


Most people are in the black and get little or no interest yet the nice banking people are using their money to lend at a squillion percent interest and still asking for a fee .... are these people who live in ivory towers absolutely ******* mad as well as spineless wimps?

This is all irrelevant, this is a matter of contract law and whether people are responsible for their agreements. The supreme court has confirmed that they are. That is the end of the matter.

All the other appeals to emotion and other fallacies should not and do not matter to this case.

A very good, common sense victory for responsibility from the court.

 

[dowie]

Good. I can manage my finances and not go into the overdraft. why should I be punished for obeying the rules?

this tbh...

Also I did once temp in a bank after uni - they're perfectly willing to waive fees if its the first time - or a while since you've been charged - basically if it happens only once or twice a year then chances are they'll just refund you - tis only the really disorganised people who are affected by this.

I'm pretty happy with free banking tbh.. if people didn't want to get charged then they should just be a bit more careful with thier finances.

 

[Amp34]

Being an 18 year old 20 years ago is a hell of a lot different from being one today, sure. You experienced no where near the influence the teenagers of today do.

I'm 21 and have debt, plenty of it. Not proud of it, but I consider myself someone of above average intelligence, pretty street smart and grounded. I own my own apartment too, and my monthly income cuts close to my expenses, and on some months even tops it. In the last 2-3 years I've probably been fined £4,000 odd. Sometimes it was my fault, sometimes that is questionable. The fact is that my bank profits from it.

Do you have cable or sky?
Do you have a contract phone, if so how much a month?
Do you have internet (obviously), if so how fast and how much?
Do you go out, if so how many times a week and how much do you spend?
Where is your apartment? Share or move somewhere cheaper?
How much do you spend on luxuries? Sweets, chocolate, cake, biscuits, TV, computer, games etc...

These are the first questions I would ask...

Also I don't get how people get unauthorised overdraft fees. Why not get an oerdraft just in case, most banks/building societies will give you a couple of hundred pounds automatically when you open an account. That way you have a couple of hundred pounds just in case a random payment comes out at the wrong time if you are that close to £0. That way you only pay a few pence interest a month for the overdraft. Is it the case you are already in your overdraft? In which case why?

The overdraft is supposed to be a fallback if you are desperate and used occasionally, not something (which is VERY common for students) that increases the amount of money you have. If you are that far into your overdraft on a regular basis then look at my first points as you are obviously spending too much and living a lifestyle you can't afford (the only exception is when you suddenly loose your job and have contractual agreements, and even then they can usually be reduced (eg. phone contract for one)).

Having £4,000 worth of fees means you really can't be very good with money, the occasional fee is fine in my eyes, could be because of an oversight, but into the hundreds and thousands shows systematic abuse of the system and the complete lack of ability to control your own money ESPECIALLY when you have a job.

However, having said all that I do think some banks charge way too much, £8? Fine. £39? now that is taking the ****.

 

[dowie]

So ...... let me get this straight; the banks **** up and mismanage their finances by billions; using loads of money that they don't actually have and ....... we give 'em money to help 'em out.

If we **** up by a few quid, we get charged a disproportionate penalty charge .... Yeah! I see how it works now.

Well you can't have it both ways - either banks reduce access to credit and penalise people for abusing the line of credit they've been extended or they just act blase about it, don't penalise people , just let them take a larger overdraft than intended with no penalty and thus encourage a bunch of disorganised people to effectively borrow more than they can afford.....

I think the whole sub prime fiasco/credit crunch has already illustrated that giving chavs more money than they can cope with isn't a good idea.... I reckon sticking to strickt overdraft limits and penalising people who abuse it is probably a good idea (lets face it it doesn't take that much organisation and living right next to your limit is just plain dumb tbh....).

 

[Sawell]

Do you have cable or sky?
Do you have a contract phone, if so how much a month?
Do you have internet (obviously), if so how fast and how much?
Do you go out, if so how many times a week and how much do you spend?
Where is your apartment? Share or move somewhere cheaper?
How much do you spend on luxuries? Sweets, chocolate, cake, biscuits, TV, computer, games etc...

These are the first questions I would ask...

Also I don't get how people get unauthorised overdraft fees. Why not get an oerdraft just in case, most banks/building societies will give you a couple of hundred pounds automatically when you open an account. That way you have a couple of hundred pounds just in case a random payment comes out at the wrong time if you are that close to £0. That way you only pay a few pence interest a month for the overdraft. Is it the case you are already in your overdraft? In which case why?

The overdraft is supposed to be a fallback if you are desperate and used occasionally, not something (which is VERY common for students) that increases the amount of money you have. If you are that far into your overdraft on a regular basis then look at my first points as you are obviously spending too much and living a lifestyle you can't afford (the only exception is when you suddenly loose your job and have contractual agreements, and even then they can usually be reduced (eg. phone contract for one)).

Having £4,000 worth of fees means you really can't be very good with money, the occasional fee is fine in my eyes, could be because of an oversight, but into the hundreds and thousands shows systematic abuse of the system and the complete lack of ability to control your own money ESPECIALLY when you have a job.

However, having said all that I do think some banks charge way too much, £8? Fine. £39? now that is taking the ****.

I'm not in any financial trouble, the £4,000 would have been nice... I could have bought a nice holiday

I'm just very casual with money. The reality of the situation is I'm not cut up about still having to pay the fines, I just think the amount they charge is extortionate. I'll pay it, like most people do. That doesn't mean the cost is justified though at their end.

I have to admit I haven't had a fine in about half a year, I went through a period of having multiple MMORPG subscriptions that kept tipping me over before one of my income streams came in. I think one month I racked up about £150 in fines because I simply didn't check my account and I hadn't actually been paid on the right day I made about 6 transactions in the day, lol.

I'm not great with my money, no. I've gotten better.

 

[v0n]

My beef is - banks facilitate these penalties.
On one hand it's the cheques that take 7 days to materialize on accounts. It's the halifax current account transfers to halifax credit card that takes 5 working days and used to take 15 seconds few years ago. Or the built in safety systems that lock you out while paying restaurant bill on holiday abroad but conveniently ignore evident errors, like the same company withdrawing the same sum multiple times in the same minute via direct debit (happened to me with mobile company before, was charged 3 times - it didn't look suspicious to the bank).
On the other hand it's the sudden availability of unrequested overdrafts and credit lines to people who clearly shouldn't have them - students, unemployed, people without regular income paid into their accounts.

Let's make no mistake about it - it's a setup.

If going 50p overdrawn is a crime worth £57 (Lloyds) or £63 (HBOS) penalty, then why isn't it worth a simple phone call to the account holder? Why isn't overdraft or credit line an opt in service? What was so wrong about lady at the till in Tesco telling some poor retired schmuck "I'm sorry sir, but your bank denied payment at this time, please contact them for clarification" that it had to be turned into situation where going over the account balance by few pence snowballs penalty charges and that poor old schmuck finding out about it with the next statement?
And finally why is there no way to opt out of the "unauthorized overdraft facility" in many cases, especially when you never authorized availablity of that unauthorized line of credit in the first place?

 

[Indy500]

On the other hand it's the sudden availability of unrequested overdrafts and credit lines to people who clearly shouldn't have them - students,

That's been the case since students received large government loans into their account 3 times a year

While I don't agree with the system necessarily, the idea is that graduates will soon earn a lot of money and therefore put a lot through the account each month.

 

[CaptainComedy]

great. hsbc fleeced £1000 out of me, now they get to keep it. stupid ******* court. Just because banks threaten to charge people for using their banks, doesn't mean their initial approach to fleecing money was acceptable. they shouldn't give unrealistic charges for a piece of paper, some ink and a stamp.

they shouldn't need to charge for having a bank account - they use your money to invest regardless.

I had to pay 170 bank charges per month because I couldn't afford to pay the same charges the previous month. even when I did, they still charged me 170 regardless. asking for an overdraft and they refused me and told me to use THEIR credit card. I even got charged when there was money in my bank, and in some cases not allowed to take out money because a direct debit was going out in 3 days time, even though tripple the amount of money was coming into the account 2 days before it was to be taken out.

ripped off, blacklisted and defeated. Thank you system, you know how to help me out.

 

[Meaker]

They're allowed to charge you that because you requested an instant overdraft and as per their price list it is how much you pay for that. You signed a contract with the bank agreeing to this, so you have no recourse.

Disproportionate? Sure! Can you challenge that? Nope, not with the latest blow. Think of it as your contribution to the free banking system most people have but only people who barely scrape by have to pay for.

Fortunately most banks are lenient enough to write off one charge a year which is about what your average person gets a year.

Errr they never actually paid out any money, they just charged my account (which put it negative) and refused to pay anything. There was no overdraft or lending of money. They "charged" me for refusing a transaction.....

All because paypal was pointing to the wrong account.

My other account was with the same bank btw, so the bank itself had my money I wanted to pay out, but because it was in the wrong "box" they charged me and refused to pay out untill paypal switched over to the second account.