Reclaim Your Bank And Card Charges

[Chrysalis]

Originally Posted by Pia

I'm not sure i totally understand this...

So, charging is illegal, so why are they still doing it? How come one of them regulation companies haven't put a stop to it?
And how come they are allowed to close the bank accounts of people that claim?

I did some research and it seems the regulator has took a tep back.

They enforcing it on credit cards at a date soon to come which is why we seen that barclaycard change in policy. But the overdraft fees are been allowed to continue.

To me this is sending a mixed message, we have 1000s of people claiming back charges on the basis they illegal and banks paying out which would suggest they illegal, but no regulator telling them to scrap the charges or at least reduce them to a proper level.

As for account closure it appears the banks can do what they like, however I did read that if closing the account means asking for a debt back in one go it could break some banking rules that they are supposed to be fair with debt repayments.

---------- Post added at 01:44 ---------- Previous post was at 01:39 ----------

Originally Posted by Mr Angry

For those taking (or considering) legal action to recover charges:

It is a wise move to open an account with somewhere like the Woolwich before you take your current bank to the cleaners. The Woolwich are "pretty cool" about new customers and don't do credit checks on many new customer accounts (depending on the type of account facility required). With many new accounts they also offer to rearrange all your Direct Debits, Standing Orders etc free of charge for you.

Some banks are getting a bit stroppy with customers who successfully claim (ie. everyone who has claimed to date) and are closing some successful applicants accounts. The legality of such actions are currently being looked into and I'm pretty sure that they'll have to stop doing this in the near future or face further legal action from customers (if not Government - who are hell bent on everyone having a bank account so they can keep tabs on all of us).

There is no legal (or logical) argument for any bank to close an account simply because the account holder has won a claim against them. The argument most commonly put forward is that the bank feel that the account is not "profitable" or "incorrectly managed". This is an interesting, if fundamentally flawed, defence of their actions.

Over the past few years the Government (bless 'em) have moved over 93% of benefit payments to BACS / EFT and benefit receipients must have a bank account to receive payments. Additionally, benefit receipient accounts are, on instruction from Government, to be treated differently from the accounts of working individuals in order that the socially disadvantaged are not further penalized by bank charges.

This raises the issues of equality and discrimination (yes, the old chestnut of human rights). I'm personally involved with two current cases where the plaintiffs have threatened (legitimately) to sue their banks for theft after they won back their charges, costs, and interest and their banks closed their accounts.

Guess what? Once the banks realized that charging illegal penalty fees was now the least of their worries and that people were prepared to instigate criminal proceedings for theft they quickly backed down and offered (sorry, "begged") the plaintiffs to reopen their accounts and let bygones be bygones. Neither plaintiff has taken them up on their offer and are currently considering proceeding with the theft charges.

Generally speaking if you take action against your bank for illegal charges it is worth mentioning to them in your letter before action that any attempt to defame or disadvantage you as a result of you exercising your legal rights will result in further legal action.

I find this works a treat since once they receive their summons in respect of the illegal charges you can pretty much rest assured that they'll get the message that you're quite prepared to go to court in the event that they do defame or disadvantage you as a result of you deciding to do so.

Be advised though that 99% of banks do not "roll over" once you threaten action, 99% do not roll over once you issue proceedings, 99% will drag on until the day of the hearing trying to wear you down or brow beat you with legalese and fancy letterheaded missives from their elected counsel. There is an upside though - 99.9% of them, to date, have paid up. The one exception being Lloyds who in one case used a cunning (see: lowdown / sneaky) interprative distraction which, if they attempted to use it again, would be entirely ineffective

Inspiration for all

http://news.bbc.co.uk/1/hi/northern_ireland/5043154.stm

http://www.guardian.co.uk/guardian_j...524077,00.html

http://news.bbc.co.uk/1/hi/england/m...er/4810490.stm

http://www.lindum-marketing.com/pena...ess-120206.gif

Yeah lloyds appear to be the toughest nut to crack.

So basically if one claims they should expect to lose their account and prepare for it, I noticed people who win their claim are closing their accounts anyway. So people claiming are more or less deciding they no longer want to do business with their bank.

What do you reccomend to people who have debts with the bank tho like a loan, would the bank close the loan also and demand repayment?

---------- Post added at 01:53 ---------- Previous post was at 01:44 ----------

Originally Posted by lemarsh

OK - have worked for LTSB (many years in a branch, but not at present) - so would like to just add a few things into this.

I am not going to comment on the rights or wrongs of returning cheques etc - only that can be agreed between you and the bank, and the history of the account. As I do not know (or want to know) - I will leave that area.

Standing Orders from other Banks should be sent and receievd within 3 working days - and this has always been the case. In some cases it will be quicker (i.e. from same banks in some cases - but should never take longer). Only change to this is when the credit has incorrect information on it, and needs to be manually processed to the account.

The credits will (for all major banks) leave your account the day in is sent - not 4 days later, to time in when the account is due to get to the other end.Banks may pay interest during this period - but it will have left your bank. Therefore, you need to get them to explain how a payment is 'ceared' 7 days later. Doesn't make sense if you are using major bank - or at least one using APACS.

Cheques DO NOT TAKE 7 days to clear. Fact. They have always taken 4 days (and same day sometimes). Only exception if not drawn on UK bank sort-code. The computer systems automatically make cheques as cleared on the 4th (or earlier) day. No branch involement can change this.

The systems do not lag. They will debit your account the moment they get the 'electronic' payment through. If you withdraw through LTSB Cashpoint (and I believe Link) the payment will show immediately out of your account. However, if a retailer holds onto a transaction, then (although it may have been authorised), until the retailer and their processessing bank process the payment, no monies will come out of your account.

Loan accounts cannot (I believe) be closed early - they are dealt with under the Credit Act. You have agreed to pay then £x over £y months. Providing you make these payments, you are not in breach of the terms, and therefore OK. However, as Alliance & Leicester are doing, they are within their right to ask you to close your account, and give you 30 days notice.

The majority of customers pay (unlike most of Europe) no fees for running their accounts - and therefore people are receiving a free service (which costs a fortune to run - but everyone expects something for free). If people run their accounts badly, they should expect to pay for it. After all, if you go overdrawn without getting agreement, you are taking something that technically does not belong to you (i.e. the bank's money).

Ultimately, if everyone goes down the line of askiong for refunds over the last 6 years, I can see the banks starting to get very pciky, and only operating accounts that are for good customers, and do not run their accounts overdrawn and outside of limits. Therefore, getting accounts in the future would be more difficult, and if people stray from the right side of the limit - accounts closed quickly. Or running accounts for free will disapear. Not going to haooen over the next few years, but at some time in the future, who knows.

All the above are personal opinions, and in no way reflect in Chrysalis. Just setting a few facts right, and then a general opinion on the banking at present.

Maybe thats how it should work but isnt happening here.

If I pay in a cheque on a monday, the earliest it will be cleared is friday morning at midnight but usually the following monday or tuesday.

If I use my debit card somewhere, my available balance usually goes down (not always) but the transaction doesnt show until a day or two later.

A transaction from another bank (not standing order) seems to take an age it should be max 7 working days I am told but usually 3 to 5 days, it took 10 working days for me, you saying it doesnt happen but it DID happen.

The transaction was in Lloyds TSB system for 3 or 4 working days doing what? dont know for sure but if they dont tell me soon I am reporting them to the financial obdusmen.

Lloyds TSB in the past have taken extra direct debit payments from my account for my loan without authorisation, I ring up and they refund, except guess what? a transaction from themselves needs 5 days to clear. If during this time a direct debit or standing order isnt cleared I am liable for the fees they wont refund.

It seems the banks are claiming that if penalties on the poorer people in society are dropped (they currently subsidise free banking for the rich) that free banking will end.

They convieniantly ignore monthly banking fees paid by many for certian facilities such as overdrafts (my select account is £7 a month) again people with large balances get these fees waived. They ignore that whilst money is been cleared they earn interest on it and its theres to use how they want, yes banks do make money this way, it was reported sometime last year that if they wanted to they could scrap clearance delays but in return would charge for ATMs to recover the lost profits so the idea got scrapped. Of course they also make money from lending out money with the interest they get back.

[lemarsh]

OK - some point-by-point responses. Please don't think I am just defending my employer - I do believe that fees are to high, however, I do believe that there should be a level playing field with all information. The problem with programmes like those shown on BBC/ITV are:
1) Trying to create good viewing figures - and 'company bashing' (whether it is Banks or Airlines etc) is good viewing.
2) You ALWAYS only get 1 side of the story. The Banks cannot actually talk to the TV Company because of customer confidentiality. 1 sided stories are always that - 1 sided!

lemarsh: Out of interest: what is (roughly) the average cost of running a (private) current account

To be honest, I haven't got a clue! Once was quoted about £10 - but that was years ago, and don't know the basis of this calculation - or even if it was a figure some one plucked out of the air.

I'm not sure if you're referring to just lloydstsb or all banks but...I have it in writing from the nationwide that cheques into their current accounts take 5 working days to clear.

Sorry, I'm 'old school' - Nationwide is still in my eyes (along with all the rest of them) a Building Society, playing at Banking! IN the old days, for example, Leeds Building Society would pay all the cheques into Lloyds, so had to add 2 or more days onto the Banks clearing cycle. Now this may not be the case now.

If I pay in a cheque on a monday, the earliest it will be cleared is friday morning at midnight but usually the following monday or tuesday.

Generally, cheques are cleared in the following times:
Day 1 (mon) - Paid into Branch - and sent to Head Office
Day 2 - Goes through clearing system - and exchanged between banks
Day 3 - Received by paying Branch
Day 4 - Technically, the paying branch can still return this item - and should therefore be classes as uncleared.
Day 5 (Fri) - Item would have cleared overnight (thur/fri) - but could still be received as unpaid.
CLEARED FUNDS are not a guarantee of the fact the cheque is going to be paid.

If I use my debit card somewhere, my available balance usually goes down (not always) but the transaction doesnt show until a day or two later.

The authorisation will reduce the balance - as the Bank has agreed to pay this. However, they have not received the actual debit, so cannot debit it from your account. CHances are (again this is going back a few years, but should still be in case, and I can't comment for other banks) the 'earmarked funds' (i.e. what was said to be coming out of your account) will be removed a few days later automatically, in roughly the time the debit appears.

A transaction from another bank (not standing order) seems to take an age it should be max 7 working days I am told but usually 3 to 5 days, it took 10 working days for me, you saying it doesnt happen but it DID happen.

I'm not arguing (honest) just explaining the system. 3 to 5 days is correct (I believe 3 should be the norm). If it does take 10 days, from UK to UK, there is a problem. Lloyds will not delay processing to your account. There is not justification for that, and no benefit to the Bank (any additional interest is going to be insignificant when it comes against the potential loss of an account - and 10 day transfers would result in a loss of accounts). Go back to the sending bank - and check account details etc. Providing they are a UK bank, there should be no need for more than 5 working days. I am presuming it is going into a Bank, as opposed to a credit card/building society account.The sending bank should do a 'trace' through the system (i.e. where was the money from leaving us- and on what day did it get to the next 'step' in the transaction). If there is a delay, this will show up where, and the necessary action taken to correct it. 10 days is unacceptable.

Lloyds TSB in the past have taken extra direct debit payments from my account for my loan without authorisation, I ring up and they refund, except guess what? a transaction from themselves needs 5 days to clear. If during this time a direct debit or standing order isnt cleared I am liable for the fees they wont refund.

Again, can't quote on individual cases, but.... a loan set up correctly (always a possability it was not set up right...) should only take 1 payment per month. Again, that is what you signed for under the consumer credit act agreement - £x for £y months on z date. Providing payments are not missed, this is the automatically set up. There may be (again - branch experience is now - especially for loans - out of date) a time when someone delays a payment (i.e. can it be paid on the 20th as opposed to the 10th), that if someone changed it between those dates, the computer will pick up the 20th, so a payment could be made on 10th & 20th - but this is just bad timing, and may not be the case.
If ANY MISTAKE the bank makes which results in bank charges (or any other charges for that matter) they should (and I believe are) always refunded. Where they may be an argument is where the fault lies. That is down to 2 people having a conversation, understanding each others point of view, and agreeing if the bank was at fault. If you do not agree with the decision the banks make, you can always follow the grievance procedures, which ultimately lead all the way to the Banking Ombudsman (whos decision is final on the bank, but not on the ciustomer).

It seems the banks are claiming that if penalties on the poorer people in society are dropped (they currently subsidise free banking for the rich) that free banking will end.

You tell me then the poor don't pay for the better off!

[Chrysalis]

Well clearly in future when paying into my account I am going to have to allow 3 weeks to make sure I avoid charges, paid in from UK bank 23rd may, appeared 7 june midnight, other UK bank did do a trace said it was marked as transaction complete 1 june, lloyds tsb couldnt tell me where it was when I asked 5 june but suggesting other bank still had it. They refused to run trace etc. As other bank was more cooperative I am more inclined to take their word for it given that and lloyds tsb are taking 6+ working days to clear cheques on a regular basis.

Back on the original subject of bank charges, it is clear they illegal this appears to be the case as they have not won a single court case on this. So why are they been penny pinching settling right before court day and wasting (a) public fees on court costs (b) customers money on solictor fees when they could settle before that stage.

Also why are they and other banks still keeping their charges in place, I think if it stays like this now its so open in the public domain eventually either the government or the regulator is going to say hey you charge X amount or you fined XXXXXXX amount. Banks wont be able to suddenly start booting all poor people out because again the government needs them to have bank accounts and if it doesnt already exist a law will be created to protect them. It seems they are just delaying the inevitable now and I think the future of banking will change. Personally if we get charged say 2% of transactions for using an ATM I wouldnt mind (wouldnt surprised me if they did fix fee again to benefit rich), add a annual banking fee say £10 for every single customer including the rich ones and they have replaced their 3bill loss of turnover.

[etccarmageddon]

What do you reccomend to people who have debts with the bank tho like a loan, would the bank close the loan also and demand repayment?

if they tried that on I'd tell them to get stuffed and continue monthly payments, unless in the loan terms it says it requires a current account with the bank like some mortgages used to.

[Mike]

Originally Posted by Mr Angry

Be advised though that 99% of banks do not "roll over" once you threaten action, 99% do not roll over once you issue proceedings, 99% will drag on until the day of the hearing trying to wear you down or brow beat you with legalese and fancy letterheaded missives from their elected counsel. There is an upside though - 99.9% of them, to date, have paid up. The one exception being Lloyds who in one case used a cunning (see: lowdown / sneaky) interprative distraction which, if they attempted to use it again, would be entirely ineffective

What was Lloyds defence because I am just about to throw a case thier way !

Thanks

Mike

[Nugget]

Originally Posted by lemarsh

Cheques DO NOT TAKE 7 days to clear. Fact. They have always taken 4 days (and same day sometimes). Only exception if not drawn on UK bank sort-code. The computer systems automatically make cheques as cleared on the 4th (or earlier) day. No branch involement can change this.

Point of order, but I don't agree - cheques will clear in whatever timeframe the bank has set up. 4 days is more likely to be the average clearing time, if you use the example of my account with the Co-op (3 days) compared to Mrs Nugs with Abbey (which, at one point was taking 8!).

EDIT: And yes, I am aware that the average of 8 & 3 is 5.5, it's just an example of the differing timeframes

[Gareth]

Originally Posted by Chrysalis

Back on the original subject of bank charges, it is clear they illegal this appears to be the case as they have not won a single court case on this. So why are they been penny pinching settling right before court day and wasting (a) public fees on court costs (b) customers money on solictor fees when they could settle before that stage.

Just a minor point... the banks involved have not won a single court case but neither have they lost a single court case. They've all been settled out of court with the banks repaying the fees (which is more cost efficient for them to do, as the individual amounts are relatively small, albeit numerous), and of course no admission of guilt has ever been announced by any of the banks concerned.

Of course the banks are going to drag their feet before coughing-up... that's to be expected really.

Originally Posted by Chrysalis

Also why are they and other banks still keeping their charges in place, I think if it stays like this now its so open in the public domain eventually either the government or the regulator is going to say hey you charge X amount or you fined XXXXXXX amount.

The OFT finding wasn't that charges per-se are unlawful, but they did find that the charges were excessive. The OFT's suggested limit is £12, they have never said that all charges are illegal or should be discontinued. Their press release can be read here

Originally Posted by Chrysalis

It seems they are just delaying the inevitable now and I think the future of banking will change. Personally if we get charged say 2% of transactions for using an ATM I wouldnt mind (wouldnt surprised me if they did fix fee again to benefit rich), add a annual banking fee say £10 for every single customer including the rich ones and they have replaced their 3bill loss of turnover.

I much prefer the current system, to be honest. I don't see why I and many, many others should be penalised because, unlike some people, we can manage a bank account properly. However, if things continue, then I can see blanket charges being introduced. I don't agree that it's a case of the poor subsidising the rich, as I know many not-rich people that benefit from free banking.

---------- Post added at 12:26 ---------- Previous post was at 12:22 ----------

Another thing... regarding ATM charges, would you expect the nominal charge to be paid to the owner of the machine you're using, or should it be paid to your bank even if you're not using your issuing bank's ATM.

[etccarmageddon]

the issue I have with it is it's too much like a 'fines' system where they dont just hit you once but again and again as each direct debit bounces often leaving someone on a low income with charges in the £100s for being overdrawn by a small amount. this has never happened to me but I have seen the stress it has caused.

the interest rate on being over drawn should be increased in order for these charges to be dropped but the banks would never do that as it would expose the real APR inflicted on these people.

alternatively there should be a monthly charge when you go overdrawn unauthorised but it isn't then compounded with charges left right and centre for transactions.

[Mr Angry]

Originally Posted by Gareth

Just a minor point... the banks involved have not won a single court case but neither have they lost a single court case. They've all been settled out of court with the banks repaying the fees (which is more cost efficient for them to do, as the individual amounts are relatively small, albeit numerous), and of course no admission of guilt has ever been announced by any of the banks concerned.

Gareth, with all due respect, I've explained why this excuse is "rubbish" before and I'll do it again. I, personally, over the past sixteen or so months, have been involved in several dozen cases where almost £90,000 has been refunded in penalty charges.

Please explain your "cost efficency" theory. If the banks wanted to put a stop to losing these cases all they have to do is disprove one - just one - case and they're home free. Are you telling me that the bean counters at the banks think it's better to sit back and let many thousands of people successfully claim possibly millions in unfair charges rather than engage a solicitor (at best a barrister) at a cost of say £10,000 to destroy the entire claims process?

Originally Posted by Gareth

The OFT finding wasn't that charges per-se are unlawful, but they did find that the charges were excessive. The OFT's suggested limit is £12, they have never said that all charges are illegal or should be discontinued. Their press release can be read here

The actual press release can be read here http://www.oft.gov.uk/News/Press+rel...2006/68-06.htm

The OFT press release states "Only a court can finally decide whether a charge is unfair or not. The OFT has today set out a statement of its view of the law. This has not generally been accepted by most of the eight credit card issuers".

The "law" to which the OFT refers is the very same law which states that penalty charges are illegal. This has been proven in court on several occasions. We were extremely disappointed that after months of legal discussions the OFT sought to offer their "view" of the law rather than to actually use the law to clamp down on this abusive practice and empower consumers with the knowledge that their entitlement to refunds of penalty charges are a legal right.

[Mike]

Originally Posted by Mike

What was Lloyds defence because I am just about to throw a case thier way !

Thanks

Mike

Mr Angry

Any comment ?

Mike

[Mr Angry]

Apologies Mike.

Essentially Lloyds - in one of the very early cases contested, were fortunate enough to be able to argue that banking law was different to consumer law.

Subsequently this has been disproven, Lloyds were alerted to the fact and, to the best of my knowledge, they have settled every subsequent claim issued since rather than try to reassert their argument.

[Gareth]

Originally Posted by Mr Angry

Gareth, with all due respect, I've explained why this excuse is "rubbish" before and I'll do it again. I, personally, over the past sixteen or so months, have been involved in several dozen cases where almost £90,000 has been refunded in penalty charges.

Please explain your "cost efficency" theory. If the banks wanted to put a stop to losing these cases all they have to do is disprove one - just one - case and they're home free. Are you telling me that the bean counters at the banks think it's better to sit back and let many thousands of people successfully claim possibly millions in unfair charges rather than engage a solicitor (at best a barrister) at a cost of say £10,000 to destroy the entire claims process?

I must firstly point out that these comments are my own personal opinion and are in no way an interpretation of anything other than my personal views.

With all due respect, Mr Angry, I think that your sums might be slightly optimistic. Not with regards the amount that you've dealt with, I'm sure those figures are correct. However, I think that the cost of one bank employing not only its own legal department but also, as you point out, any required barristers to take on a case to try and disprove a claim, is going to be a helluva lot more that £10,000 .

Bear in mind that this could potentially take many months if not years to come to fruition, and that also, during this period, they would still be receiving more claims where they only have 40 days to respond.

Finally, it's also worth considering that the possible millions that might be repaid is spread amongst all banks, credit card issuers, store card operators, mortgage providers, etc... so although the amount each is repaying is reduced, the legal fees incurred would be atttributable to whichever bank,credit card company, etc... decided to take up the gauntlet.

Originally Posted by Mr Angry

The actual press release can be read here http://www.oft.gov.uk/News/Press+rel...2006/68-06.htm

Yes, sorry, I inadvertantly pasted the URL from the wrong window... I had both open and copied the older release.

Originally Posted by Mr Angry

The OFT press release states "Only a court can finally decide whether a charge is unfair or not. The OFT has today set out a statement of its view of the law. This has not generally been accepted by most of the eight credit card issuers".

The "law" to which the OFT refers is the very same law which states that penalty charges are illegal. This has been proven in court on several occasions. We were extremely disappointed that after months of legal discussions the OFT sought to offer their "view" of the law rather than to actually use the law to clamp down on this abusive practice and empower consumers with the knowledge that their entitlement to refunds of penalty charges are a legal right.

I would love to see this go to court, simply because everything would then be much more clear-cut and less ambiguous for the consumer than it currently is. IANAL (although I did study law at college many moons ago, before changing career completely) but I can't see it happening sadly, and I think that the opinion of the OFT is the best we'll get... although it has had a visible impact already.

My personal opinion, for what it's worth, is that the charges are indeed too high, and have been used in the past as an additional revenue generator by some organisations.

[handyman]

Originally Posted by Gareth

My personal opinion, for what it's worth, is that the charges are indeed too high, and have been used in the past as an additional revenue generator by some organisations.

Thats the crux of the matter. £33 for Yorkshire bank to check my balance (automatically) and send out a letter is wrong.

Looking back I can see how easily money racks up for the banks.

I have a dd rejected becuase i'm £9 over my limit and a £33 charge added.
Then I get a £8 charge for been over drawn that day.
Then the dd goes back in the next day and then it charges me £33 and £8 again.

And all the while I can't do a damned thing because the cheque I banked the week before for £100 put in for the dd has not cleared and when it does the banks have had £82 of it. So the net result is that i'm only £9.00 in credit and then the company the dd is with applys a £40 admin charge to my account.

I 100% blame the banks.

[Mike]

Originally Posted by Mr Angry

Apologies Mike.

Essentially Lloyds - in one of the very early cases contested, were fortunate enough to be able to argue that banking law was different to consumer law.

Subsequently this has been disproven, Lloyds were alerted to the fact and, to the best of my knowledge, they have settled every subsequent claim issued since rather than try to reassert their argument.

Many thanks.............

Mike

[Mr Angry]

Gareth,

Sincerest apologies if my last post came across as ascerbic and directed at you personally. I assure you this was not my intention.

I disagree that my figures are optimistic. The banks make billions in penalty fee charges. If I was in their position and believed for a second that the charges were entirely legal then I'd pretty much be prepared to pay anything (short of 3 billion) to defend and win a case to secure my entitlement to continue to do so for perpetuity. They, however, don't want to engage because they are acting illegally and they know it. Case law / consumer law and proven cases are there on the statute books to prove the fact.

We are in agreement that we'd both love to see this in court - but the banks don't share our enthusiasm.