Bank charges and the compensation some people have received

Discussion in 'Off-Topic Chat' started by Laserbeam bass, Jun 18, 2007.

?

Is getting bank charges back?

Poll closed Jul 2, 2007.
  1. A good thing? I need the money!

    61.1%
  2. A bad thing? I lose my free banking

    38.9%
  3. Not sure either way? I don't have a bank account

    0 vote(s)
    0.0%
  1. Laserbeam bass

    Laserbeam bass Active Member

    I thought I would start this thread with an honest appraisal of why people get charged by banks. I worked for a bank for 13 years, and whilst I did consider that the charges meted out were slightly excessive for the amount of work actually involved in say returning a Standing Order, my main thought was that these people wouldn't be in the position of paying them if they lived within their means.

    I thought I would take the opportunity to have a rant about the recent cases that have been coming up about people getting thousands of pounds back from their Bank, when they have been overdrawn or failed to have sufficient credit balance in their account to be able to pay what they have asked the bank to do on their behalf.

    I, through working in a bank and it being an automatic disciplinary if you went overdrawn, have remained within an authorized overdraft, and in a credit balance ever since I was given an account in 1991.

    My main gripe over all of this is that I am going to lose my free banking facility because the banks are forking out thousands and thousands in out of court settlements. Who will they pass the cost of this onto? Genuine rule abiding customers, who should have took the p1ss like every one else did and gone overdrawn, and got a nice windfall for doing something wrong.

    What a very bizarre world it is we live in.


    Rant Over
     
  2. SuperMosh

    SuperMosh New Member

    When HSBC, amongst others I am sure, make in excess of £5 billion in profit, I am not sympathetic to be honest. If people are getting their charges back, which have been ruled as being unfair, then I think the banks are guilty are taking the mick.
     
  3. Craigsav83

    Craigsav83 Active Member

    Sorry Laserbeam, I must disagree with you.

    The issue isn't that bands charge, but how much, and is by no means quote "slightly excessive" but is grossly excessive. It is these unfair, and from what I understand, illegal charges that are causing people to have cash troubles. Its nothing to do with living within your means, which most people try to do, but can you imagine someone trying to study, and work, which is what most students do, with bills to pay? Lets face it the NMW still doesnt meet the demands of society today, and thats why people are struggling with everyday costs. To pay one of those charges would be equivelant to around 6 hours pay at the NMW.

    In all honesty, I'd encourage anyone who has been robbed by the banks to claim their money back.
     
  4. i too must disagree, i was given back my money after my bank lost my student letter, resulting in loads of charges and overdrawn fees. i was given it all back when they found my letter again, but it was horrible losing all that money and being a student.
     
  5. brassneck

    brassneck Active Member

    What about the majority of people who have bank accounts that don't get charges? Those ones that don't spend money when they don't have it? The costs will be passed on to them with service charges. Remember to ask yourself that the banks in the UK offer at no cost to look after your money, organise bill payments, protection against fraud etc. etc. ... it's mainly a free service if you keep your accounts in credit.
     
  6. Craigsav83

    Craigsav83 Active Member

    Fair points brassneck, I'm not entirely sure you get what I mean though, and why it annoys me so.

    As a student I can only work part time, this, with my student loan barely covers the cost of living, look at the energy bill rises in the past year, not to mention the general cost of living. I wish my wage would go up by 90% like my gas bill has.

    Banks make a huge amount of money, I assume from mortgage and loan interest payments, as well as stocks, shares and property, without taking money from those who need it most.

    With each charge they take, its like you have been penilised twice - I for the same thing. I'm sorry to keep going on, but it is something I'm really bitter about, it's not often my bank has helped me out in my time of need, and I'm sure its the same for many other people.
     
  7. brassneck

    brassneck Active Member

    What I mean is that like Laserbeam bass said, banking services in the UK are generally free if your account is in credit. You may see banks recoup costs by generating service charges for maintaining customers' accounts. It could be that the more you want your bank to help pay bills the more they may charge you for that service. You may have to pay more interest for using overdraft facilities (see here). Remember that most banks offer students an interest-free overdraft facility. I wonder if that could end?

    With reference to bank profits ... you will find that is mainly business that generates most money for banks, not personal accounts.
     
  8. iggmeister

    iggmeister Member

    Following that logic through, if nobody ever went overdrawn or beyond their limit, (which is surely what the banks are there to encourage), the banks still wouldn't have the money they expected to have. The whole logic of the banks argument in this regard is poor. What they are effectively saying is that they rely upon people being overdrawn or going beyond their limits (the very thing they officially try to stop you doing) to keep their profits up. Are they truly budgetting on the basis of customers incurring penalties that at law are deemed unlawful?

    Banks have our money, pay us very little interest but charge borrowers a higher rate to borrow our money. Thats the way it works. Penalties which aren't justified are unlawful and there is no excuse for the banks.

    Igg
     
  9. brassneck

    brassneck Active Member

    As I said before, banks make most of their money from businesses (because of the amount of money that is invested and borrowed), not personal/domestic accounts.

    Most banking systems run automatically as computer programmes which are tied to the terms and conditions new customers agree to when successfully opening an account. Accounts are scanned on the due dates payments are to be made and if nothing is there to pay them , the system automatically spots the default and makes a decision either to pay or not and then generates a charge. Since the agreement to set up payments on the account is between the customer and retailer, it is up to the former to maintain payments on time, not the bank. If circumstances change, (e.g., change of job and date salary paid), it is up to the customer to arrange any changes set up on the system with the retailer or bank (if standing orders are used). Whilst I am not justifying or agreeing what rate of charges banks choose to levy, it must be remembered that these terms and conditions are still being broken.

    One of the conditions of a current account is the cheque guarantee of usually £100 for card-use. What if someone deliberately decides to flaunt this and continually chooses to use this facility to spend, spend, spend when he/she has no available funds in the account? Does the bank waive the charges for deliberate misuse? The system only picks up debt after a certain amount and then the customer is referred to collections & recovery.

    Although I also question the amounts banks can charge for customers who default from maintaining their accounts, it still makes me shudder a little knowing that people who have mucked the system about and been charged for it are getting a small windfall when some people like myself have had to struggle at times because of lack of funds. What benefits are due for the likes of me who have behaved ourselves and paid all bills on time? ZILCH!!
     
  10. iggmeister

    iggmeister Member

    But they aren't getting a windfall.

    The only one getting the windfall is the banks, each and every time somebody chooses not to recover what they are fully entitled to. Don't forget that the banks can charge a sum if you go overdrawn or over your limit, just not as much as they are trying to do. Its not as if the defaulting customer gets all of their charges back in these cases, only the unreasonable proportion that the bank should never have charged in the first place. Therefore, the bank gets what it is entitled to.

    What doesn't make any sense to me is that the banks refer to something to which they were never entitled to scaremonger about the introduction of bank charges. Its a case of shift all costs to the customer. There is no corporate responsibility here.

    What they are saying is that if they are not allowed to continue to take something that they were never entitled to in the first place, they will recover it by lawful means i.e. charging for an account.

    Not that I'm wanting to pick on Brassneck (;)) but if personal accounts mean so little in the grand scheme of things, why are the banks making such a fuss of this situation?

    Igg
     
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  12. Craigsav83

    Craigsav83 Active Member

    Thats a very good point - on the note of being charged for the use of a current account, there is an easy solution - change banks, there is always someone looking for custom for the above reason.

    However, if the bands charged something along the lines of say, £6 for a bounced direct debit or whatever, I'm quite sure no-one would bat an eyelid!

    It infuriates me, as I'm still struggling at times because of something that happened about 5 years ago, that was completly out of my control, that the bank wouldn't do anything about (I wont ramble on about it) and from when they let someone use my stolen debit card a fortnight after I had cancelled it - I mean, what exactly are we paying for here?
     
  13. brassneck

    brassneck Active Member

    And the card was cancelled? Only way someone could potentially gain from this type of fraud is if they set up an agreed payment scheme using card details rather than one-off payments ... called recurring transactions (and people get them mixed up with direct debits). The company takes money off the account as card transactions. If this is observed by the bank as being bonefide, new card details will be issued to the retailer. This sometimes happens with mobile phone companies.

    http://www.apacs.org.uk/resources_publications/glossary_6.html
     
  14. mjwarman

    mjwarman Member

    Everyone seems to be getting a little heated over this!!

    I am one of the people who has managed to claim back my bank charges, and I had no issue in doing so either. On at least four seperate occasions, I was less than 10p overdrawn for no more than 2 hours and was charged £30 each time for the privilege!! I had even told the bank that this would be happening, but apparently there was nothing they could do. I doubt this very much.

    I agree that some people do flaunt the system, but some people are just unfortunate, it is not always their fault.

    Banks do make most of their money from businesses, but they also make a good amount from their customers cheques, why do they take so long to clear into your bank, if the bank stopped stealing our interest, we might have less charges to claim back and then it would hardly be worth the hassle.

    People that have never been overdrawn, do have one destinct advantage over people that have been....... Credit rating. You can take advantage of better mortgage rates and loan options. This is surely a benefit?

    One thing people do need to understand though, it is not always the fault of the person going overdrawn.

    One final thing in this rant, have you ever tried to phone HSBC customer service and change a direct debit date? Another attempt by banks to earn more and more money by shipping their customers service departments to India/Bangledesh etc. If the question you are asking is not on their script, then you have no chance of getting a decent answer.
     
  15. Horco

    Horco Member

    I was talking to a friend recently who had experienced a problem with his Bank.
    After banking with them in a correct manor for 20 yeras he got it wrong and went £5 over drawn.
    The Bank wrote to him to tell him this and charged him £25.
    Three days later as he had not put the now £30 back into his account he had another letter from the bank with another charge of £25.
    They explained that he was in breach of his account agreement by going over drawn by £5 and then debited from his account the two charges and this was without the Interset they were going to charge him at the end of the month putting him at that point £55 overdrawn.
    He did speak to a person who has reversed the charges as agood will gester.
    But what if he had not complained like many others who just sit and say oh well I wont do that again, until the next time
    Another £50 in profits.
     
  16. Craigsav83

    Craigsav83 Active Member

    In this case, my wallet fell from my pocket when I was cycling home from work, I had retraced my steps and couldn't find it, so I called up and cancelled it within 2 hours. Someone obviously picked it up and tried their luck in Stirling 2 weeks later, which annoyed me lots, as they spent my remt money for the month in the space of half an hour! It took the bank 4 months to get my money back to me for what was their mistake. :mad:
     
  17. brassneck

    brassneck Active Member

    - sorry to hear that, but either the card wasn't cancelled by the bank or it was used in the short time before you reported it lost and the authorisations were late coming through! Card cancellations cannot be reversed. One question though ... why didn't your bank reimburse you at that time until the investigation was complete? :confused:
     
  18. brassneck

    brassneck Active Member

    - By law, banks have to offer bank accounts to the general public as government departments such as the DWP no longer issue pensions and income benefit over the counter at post offices. Personal accounts also give clues about the individual who has them and their income. It's not rocket science to see why greater benefits are offered to those who demonstrate large, regular credits monthly. Customers at the higher end of that scale may be offered services such as their own personal relationship manager who is available to assist 24/7 if necessary. The more money one has, it is likely that he/she is tied with business or material wealth and it is common sense for banks to attract all their money to them.

    - why the fuss? Since there are so many account holders tied to the major banks, the costs do mount up. An average £5 overdrawn for 500.000 customers amounts to £2.5M at that particular moment. Any system faults that delays payments in or out of accounts can mean large loss of business profit in a short moment of time. Business and personal banking tends to be run on separate computer systems.
     
  19. iggmeister

    iggmeister Member

    So when the Courts have said what is being charged by the Banks is excessive (or rather, that the Banks have not been able to justify their charges) and doesn't reflect the true cost to the bank by someone going overdrawn, are you saying they have the wrong information? If so, is it not the case that the banks are just poorly prepared?

    This is a big issue for the banks because it affects so many people. Surely they must have got themselves in order to defend this class of claim by multiple claimants?

    Igg

    P.S. I dont see this as heated debate - its actually quite interesting. No offence intended etc etc
     
  20. brassneck

    brassneck Active Member

    It's just a good discussion ... talking about the banks shying off going to court ... District Judge Cooke, at Birmingham County Court, dismissed a claim for £2,545 & decided the bank's charges were in fact legitimate fees for servicing an overdrawn account. Since this didn't happen at a higher court of law, this doesn't create a precident. I don't have a scooby about why the Banks have not rallied together to get their legal heads to challenge claims directly in court! :confused:

    http://news.bbc.co.uk/1/hi/business/6657025.stm

    The recent investigation into late fees for credit card charges and the fixed upper limit of £12 for charges may illustrate that bank charges are not illegal in application but prove to be excessive once this probe is complete. The decision about them will be made before the end of the year. This could roll-off into other areas where people feel that charges are unjustified ... car parking penalties, speeding fines etc. How do these administrators justify such amounts?
     
  21. Di B

    Di B Member

    At the moment, most claims against banks are not being taken to court and through the legal proceedings. Banks are being asked by their customers to explain why they charge the amount they do. They cannot come up with a valid answer and so offering settlements.

    If they could provide a breakdown of genuine and legitimate costs, people would not be able to claim charges back. This shows the bank are unofficially admitting they are liable.

    To be honest, I would expect a financial institution to be able to accurately detail their charges based upon basic accounting guidelines so I am surprised that so many banks seem not to be able to do this!

    I agree that not all people who get charged ridiculous amounts are at fault.
    I had a bad experience when I was 20. My employer at that time paid me by cheque. They had a cashflow problem and the cheque bounced. All my direct debits (7 of them) were rejected and cost me £22.50 each.
    I then got a charge of £25 for the bank to write me a letter to tell me I was overdrawn and another £25 for unauthorised overdraft, plus interest on top.
    I was only on a salary of £6k a year and had no money to eat/pay rent that week as there were no funds in my bank account and I was now just over £210 overdrawn.
    Fortunatly, my employer was legally obliged to cover all bank charges I had incurred, but the bank was very unsympathetic when I explained the situation and wouldn't even offer me a temporary overdraft. I ended up going to the bank of Mum to give me £30 to tide me over and my landlord was understanding.
    I have never ever set foot into that bank since that time and I still feel angry at how I was treated as a nothing by a large corporation. Nowadays, I prefer small banks and building societies :)

    So, why do banks charge £20-£35 for one mistake? What is this cost made up of? I'd love to hear someones explanation on this as I think it would be an eye opener. (I know how much the IT systems cost by the way - I work for a company that deals with that sort of thing!)
     
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