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Originally Posted by Chrysalis
Ok I think there has been a misunderstanding then, I was calling it a pentalty fee when I meant admin fee. So its legal to charge for the admin costs involved but not legal to add anything on top for profit and penalise the customer.
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Yes, exactly. Where they are falling down is that they refuse, point blank, to be drawn into a court and asked to account (no pun intended) for the administrative element of the fees. Given that the industry is now highly automated I suspect that the "human intervention" element is minimal so, in essence, we could be talking pence as opposed to pounds (heavily discounted postage rates / discounted letterheads, envelopes fully automated mail merge etc etc.).
Quote:
Originally Posted by Chrysalis
OFT made banks reduce their credit card 'penalty' fees to £12 and i was curious if they would set the bank fees to the same level since if it was set to the same level it would be hard to see how credit card late payments can cost as much as bouncing cheques.
I would love for them to go one step further and stop the banks taking time to clear cheques and make them instant or at least same day clearance since its done electronically now.
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The OFT didn't actually make anyone do anything - they simply expressed an opinion which, all things considered, the banks are secretly delighted with as it means that many of them still get to recoup 50% of what they'd previously been charging illegally.
The illegality of penalty charges is beyond doubt but until such time as a bank gets hauled into court to explain their charge structure they will attempt to fob off customers with "we disagree with the OFT findings". The OFT findings are irrelevant - the law is what will make or break this case and that my friend is why the banks run away like a big running away thing when it looks like the customer will not back down.