Banks win Supreme Court case on overdraft charges

[gambitt]

I don't use DDs out of habit from my IT contractor days. The agency "forgot" to pay me one week and 2 direct debits failed and unauthorised overdraft fees ensued. So now I pay all bills manually via debit or credit card. If I didn't have those then I suppose we'd be back to cheques.

What are everyone's thoughts on "service charges" for when the bank makes an error? Back when I was a student I had an overdraft of £1500 (yes very kind of the bank). I did a standard university course of 3 years. At the end of my 2nd year the bank decided to take my overdraft away without any notice whatsoever. Apparently "the computer" had assumed that my degree was over and that I was no longer entitled to an overdraft. My balance went to about -£1200 and I received a letter asking me to pay this back immediately. A few days later I received the computer generated unauthorised overdraft "service charge" letter. A phone call didn't do the job, I had to write to the bank with proof that I was still a full time student.

So, in this instance should I be allowed to take a "service charge" from the bank for the letter I had to send to clean up their mistake? The same applies for any mistakes the banks make that requires a letter to be sent. Your thoughts?

 

[Stretch]

They are, the fair amount is the amount determined by the market as part of the overall package.

The market doesn’t always provide perfect equity, especially where banks are concerned.

I'd go as far as saying there's a certain level of collusion on this issue, formally agreed or otherwise.

 

[RDM]

So, in this instance should I be allowed to take a "service charge" from the bank for the letter I had to send to clean up their mistake? The same applies for any mistakes the banks make that requires a letter to be sent. Your thoughts?

Certainly as long as both parties have agreed up front what the charges will be.

 

[Dolph]

I don't use DDs out of habit from my IT contractor days. The agency "forgot" to pay me one week and 2 direct debits failed and unauthorised overdraft fees ensued. So now I pay all bills manually via debit or credit card. If I didn't have those then I suppose we'd be back to cheques.

What are everyone's thoughts on "service charges" for when the bank makes an error? Back when I was a student I had an overdraft of £1500 (yes very kind of the bank). I did a standard university course of 3 years. At the end of my 2nd year the bank decided to take my overdraft away without any notice whatsoever. Apparently "the computer" had assumed that my degree was over and that I was no longer entitled to an overdraft. My balance went to about -£1200 and I received a letter asking me to pay this back immediately. A few days later I received the computer generated unauthorised overdraft "service charge" letter. A phone call didn't do the job, I had to write to the bank with proof that I was still a full time student.

So, in this instance should I be allowed to take a "service charge" from the bank for the letter I had to send to clean up their mistake? The same applies for any mistakes the banks make that requires a letter to be sent. Your thoughts?

In situations where the bank has made an error, it should be refunded without question IMO. Whether you should be able to charge them is a contract issue.

 

[bam0]

Certainly as long as both parties have agreed up front what the charges will be.

Good luck negotiating an individual banking contract, banking is a closed cartel that cares little for it's customers, why should it when there is virtually no competition.
Also it's untrue that banks would have to start charging for banking services, even if they charged nothing at all in "service charges", they made more last year investing your deposits than they took in service charges.

 

[Dolph]

Good luck negotiating an individual banking contract, banking is a closed cartel that cares little for it's customers, why should it when there is virtually no competition.

Citation needed for accusation of illegal activity. That most banks operate on a similar approach is not evidence.

Also it's untrue that banks would have to start charging for banking services, even if they charged nothing at all in "service charges", they made more last year investing your deposits than they took in service charges.

Citation needed that the banks would happily reduce their income by that amount.

 

[bam0]

Citation needed for accusation of illegal activity. That most banks operate on a similar approach is not evidence.

Can I get a banking license? No I cannot, it is a closed market. Are they a strict cartel with implicit agreements, maybe not, they behave as though there is collusion in certain areas, thus I'm inclined to believe there is.

Citation needed that the banks would happily reduce their income by that amount.

I never said they would be happy to do so, I was just pointing out it would not be necessary to charge for consumer banking if there were 0 service charges.

 

[growse]

I never said they would be happy to do so, I was just pointing out it would not be necessary to charge for consumer banking if there were 0 service charges.

Except for the fact that shareholders would remove the board of directors. If you're running a company, you don't just wilfully cut revenue for no reason, unless you particularly fancy the ire of your investors.

 

[Dolph]

Can I get a banking license? No I cannot, it is a closed market. Are they a strict cartel with implicit agreements, maybe not, they behave as though there is collusion in certain areas, thus I'm inclined to believe there is.

You can get a banking license if you satisfy the necessary criteria. That the criteria is set high is a high barrier to entry, not a closed market (an example of a closed market would be anything handled by the civil service).

With regards to collusion, a functioning market will produce a range of similar services, with similar charging structures with minor variations. That is pretty much what we have. That a minority aren't happy with those charges doesn't necessarily make them attractive customers to create a tailored product for.

I never said they would be happy to do so, I was just pointing out it would not be necessary to charge for consumer banking if there were 0 service charges.

Necessity doesn't dictate the charges though, customer desire does, and the number complaining about bank charges is much much smaller than those happy with free in credit banking.

 

[gambitt]

Certainly as long as both parties have agreed up front what the charges will be.

That's a "no" then?

 

[Dolph]

That's a "no" then?

How is that a no? It's a simple reaffirmation of contracts. If the contract says you can do it, then you do it. If it doesn't, then you don't. Just the same as the rest of the obligations under the contract that both parties have agreed to. I'd be very sure that you'd not be happy if the bank started introducing new terms without notification and time to reject the contract due to the change...

I do wonder how some people manage to cultivate such poor relationships with companies with which they do business...

 

[gambitt]

If the contract says you can do it, then you do it. If it doesn't, then you don't. Just the same as the rest of the obligations under the contract that both parties have agreed to.

As said above, the banks will never agree to it and will turn you away if you try to amend the contact when opening an account. Perhaps if you are an important customer with millions of pounds to invest with them then maybe.

I await your next theoretical obtuse response sprinkled with buzz words to make it sound like that you are actually trying to make a relevant point.

 

[growse]

As said above, the banks will never agree to it and will turn you away if you try to amend the contact when opening an account. Perhaps if you are an important customer with millions of pounds to invest with them then maybe.

I await your next theoretical obtuse response sprinkled with buzz words to make it sound like that you are actually trying to make a relevant point.

I'm struggling to see what your actual 'relevant point' is. Contracts are a two way street. If either party doesn't like the conditions, they can walk away before signing.

If you're moaning about lack of diversity in the market with the contracts offered by banks, then that's a result of the market and a rather basic lack of demand for the things you want.

I'd love a 125cc motorbike in fluorescent green, but no-one makes one because not enough people demand it. Is that also unjustified and the result of a colluding cartel of motorbike manufacturers?

 

[Dolph]

As said above, the banks will never agree to it and will turn you away if you try to amend the contact when opening an account. Perhaps if you are an important customer with millions of pounds to invest with them then maybe.

So now we've established that you can't get everything you want, how is that a relevant complaint again? I want a great many things that I can't have, but I realise I'm not entitled to have all my wants filled.

I await your next theoretical obtuse response sprinkled with buzz words to make it sound like that you are actually trying to make a relevant point.

And I await your next moan about how your perceived entitlements aren't just handed to you, if we're going for a reductio ad ridiculum presentation of the opposite position.

 

[gambitt]

I'm struggling to see what your actual 'relevant point' is. Contracts are a two way street. If either party doesn't like the conditions, they can walk away before signing.

Which brings us back to "without a bank account you are living in a cave". So you have to take what is on offer.

If you're moaning about lack of diversity in the market with the contracts offered by banks, then that's a result of the market and a rather basic lack of demand for the things you want.

Firstly I'm not moaning about anything. I asked a question, namely for your thoughts on the fairness of charging banks for their mistakes. Right, blame "the market" for everything. Good answer.

I'd love a 125cc motorbike in fluorescent green, but no-one makes one because not enough people demand it. Is that also unjustified and the result of a colluding cartel of motorbike manufacturers?

Kawasaki KX125. Although this is hardly a fair comparison because you can buy a bike in any colour and then "agree a contract" with a body shop to spray it whatever colour you like. Or you can do it yourself. Plenty of choices, unlike with banking.

 

[Yas786]

Quick question: Do you think the number of people getting charged will increase, stay the same, or decrease if they lowered their charges to £10?

I dont know bit of a stupid question dont you think??. I mean how would i know if they will charge more people, stay the same or decrease??.

Its all dependant on how many people stay within their limits i suppose...if the banks decreased their charges to £10 say for instance then i imagine most people would just accept it without much fuss.

But thinking on it i suppose you have a point or can see what point your making...i guess the reason why these banks charge so much is to deter people from going overdrawn which is fair enough. But when they are charging people who go overdrawn once in a blue moon stupid amounts is the problem i have...like i said i dont go overdrawn at all...but last yr i was 10p overdrawn and was charged a lovely sum of £30 to which my bank would not waive as it was a one off :/....anyhow i took it on the chin and left it at that even though tbh it wasnt my fault...the direct debit that caused me to go overdrawn was supposed to be cancelled but obviously wasnt done in time as the payment was taken..mind you i was only overdrawn for a grand total of 2 hrs...

 

[bam0]

I'd love a 125cc motorbike in fluorescent green, but no-one makes one because not enough people demand it. Is that also unjustified and the result of a colluding cartel of motorbike manufacturers?

Tbh a fluorescent green motorbike is not a requirement to function in a modern society and you're free/capable of respraying/had resprayed any other bikes panels, your analogy fails.

I do wonder how some people manage to cultivate such poor relationships with companies with which they do business...

You as an individual do not matter to your bank, you're kidding yourself if you think otherwise, referring to the unequal dealings you have with a bank as a relationship is a misnomer.

 

[gambitt]

So now we've established that you can't get everything you want, how is that a relevant complaint again? I want a great many things that I can't have, but I realise I'm not entitled to have all my wants filled.



And I await your next moan about how your perceived entitlements aren't just handed to you, if we're going for a reductio ad ridiculum presentation of the opposite position.

I'm sorry but you won't get anything further after this. My point regarding fairness and morality has been made but you keep dancing around it with talk about how everyday customers can obtain a banking license if they wish! A practical solution indeed. In a court you are allowed to counter claim which seems a fair system, I suppose the banks are above that though.

You sound like a solicitor but then I wonder how could one have the time to post on an internet forum at 10:30 on a Friday morning so I'll just assume you are a busy body with not a lot to do. Please excuse me but my break is over and I must get back to work like the rest of the working population.

 

[RDM]

Can I get a banking license? No I cannot, it is a closed market.

You can, you need to fulful certain criteria but banking licences are availble. M&S got one when the set up M&S Financial Services, I dare say Tesco and Sainsbury's also have banking licences. Do you need a lot of money to get one? Yes, but that is pretty much the nature of banking.

That's a "no" then?

You can't make service charges unless it is agreed in contract, neither can the bank. Do you really want to change it so that anyone can charge a service charge without first gaining agreement in a contract?

I'd love a 125cc motorbike in fluorescent green, but no-one makes one because not enough people demand it. Is that also unjustified and the result of a colluding cartel of motorbike manufacturers?

To be fair, Kawasaki are bound to do something in floursecent green...

 

[beachBOYken]

hi

where does the money come from when you go overdrawn?