Reclaim Your Bank And Card Charges

[TheDaddy]

Originally Posted by Marge

I've just had a letter today from British Gas advising that they too are introducing a late penalty fee for customers

Typical of them really, they jump on the gravy train just as it is about to hit the buffers

[Mr Angry]

Originally Posted by Chrysalis

you think they will conclude it costs the same to adminstrate bank account penalties as credit cards? I would be surprised if they do.

I'm sorry but I genuinely cannot fathom any logic from what you are asking. You need to revisit the OFT statement of April this year (see the quote / excerpt below). John Fingleton put it on the line to the banks last night when he advised them, and their mealy mouthed Trade Association spokeswoman, "We are prepared to litigate on this matter".

Originally Posted by Chrysalis

penalty charges are legal but they supposed to be non profitable.

I'm sorry but you are mistaken.

Penalty charges in consumer contracts are illegal - full stop. Liquidated losses (or pre-estimates of the costs involved in addressing a breach of contract) such as those to which you refer are legal as long as they only represent the actual costs incurred. There is a very distinct difference.

Given that not one bank in the UK is prepared to either have their cost structure analyzed or justified in a court of law then it is entirely safe to conclude, as evidenced on the TV last night, that they are penalty charges levied in respect of a contract breach.

That is why the BBC go to the bother of making documentaries, why the banks have never defended a single claim in court and why the OFT couched it's words when saying "....and a court will certainly not consider that a default fee is fair just because it is below the threshold.�

It helps the consumers case, somewhat, when companies shoot themselves in the foot by declaring something to be a "late payment fee". Quite how they might hope to assert that this represents anything other than a penalty charge is beyond me - and the best financial legal minds in the British isles.

I've said it before and I'll say it again. People need to stop believing the mantra of "banks and companies wouldn't do things like this if they weren't legal". Last night's programme showed, quite succinctly, that they do and will continue to do so unless enough people assert their rights.

The banks cannot, reasonably, expect people to believe that they, armed with teams of lawyers, are shying away from court confrontations and refunding monies out of the goodness of their hearts. Kieron from Matrix Chambers hit the nail on the head when he said he does not believe that they can defend their cost structures in court as reasonable administrative charges. They have been caught stealing money from people and there are those who are minded to ensure that justice is done as we would expect in any such similar criminal case of theft.

They've been stealing money and people are getting / claiming it back. Fact.

[Marge]

and I quote

"Important Change to your Terms and Conditions

From 1st March 2007, British Gas will be introducing a late payment charge of £5 for late-paying customers, an approach similar to that taken by many credit companies where payment is late

British Gas bill you for your energy after you have used it. Therefore, when you receive your bill we expect you to pay it promptly. While most British Gas customers pay their energy bill on time, a small proportion of our customers consistently pay late, which results in costly follow-up procedures.

If we receive payments by the "Please pay by" date shown on your bill then you won't be affected by this change.

However, after 1st March 2007, if you fail to pay your bill within 28 days of the bill date a £5 charge for late payment will be automatically added to the outstanding amount of your bill.

The £5 charge represents our additional costs when a customer has not paid a bill within 28 days of the bill date."

and so on including the usual waffle about paying by DD is the most convenient method of payment, the bold bit is my contribution about how they seem to be jumping on the bandwagon.

I am absolutely furious as I haven't had a bill from them for my electricity supply since May, they state how they expect their customers to pay promptly but when the shoe is on the other foot, they can't produce a bill promptly. I've a mind to send them a bill for a late bill production fee and see how they sodding well like it

[Mr Angry]

Marge,

Many thanks.

I would suggest that receipients of this missive write to BG asking for an exact breakdown of the charge in order that they might ask the OFT's opinion of same.

Originally Posted by Mr Angry

Marge,

Many thanks.

I would suggest that receipients of this missive write to BG asking for an exact breakdown of the charge in order that they might ask the OFT's opinion of same.

Good idea, I got the letter, today, too, and while it is unlikely to affect me, due to everything being done DD, it may be politic to let them know we are aware of these things, now

[Alien]

Originally Posted by homealone

Good idea, I got the letter, today, too, and while it is unlikely to affect me, due to everything being done DD, it may be politic to let them know we are aware of these things, now

Makes me glad I have card meters for both gas & electric. Now if only someone could get NTL to drop their ridiculous non-DD payment fee...

[Shaun]

May I suggest that those with BG still take a look at http://www.moneysavingexpert.com/cgi...03281560,22751,

You could switch and save money and earn either £20 or a bottle of bubbly jsut for moving provider.

Martin goes through it on the site but if you're moving from BG you're almost guaranteed to save.

Maybe this will be incentive enough for people to take a look around.

[Chrysalis]

Originally Posted by Mr Angry

I'm sorry but I genuinely cannot fathom any logic from what you are asking. You need to revisit the OFT statement of April this year (see the quote / excerpt below). John Fingleton put it on the line to the banks last night when he advised them, and their mealy mouthed Trade Association spokeswoman, "We are prepared to litigate on this matter".



I'm sorry but you are mistaken.

Penalty charges in consumer contracts are illegal - full stop. Liquidated losses (or pre-estimates of the costs involved in addressing a breach of contract) such as those to which you refer are legal as long as they only represent the actual costs incurred. There is a very distinct difference.

Given that not one bank in the UK is prepared to either have their cost structure analyzed or justified in a court of law then it is entirely safe to conclude, as evidenced on the TV last night, that they are penalty charges levied in respect of a contract breach.

That is why the BBC go to the bother of making documentaries, why the banks have never defended a single claim in court and why the OFT couched it's words when saying "....and a court will certainly not consider that a default fee is fair just because it is below the threshold.”

It helps the consumers case, somewhat, when companies shoot themselves in the foot by declaring something to be a "late payment fee". Quite how they might hope to assert that this represents anything other than a penalty charge is beyond me - and the best financial legal minds in the British isles.

I've said it before and I'll say it again. People need to stop believing the mantra of "banks and companies wouldn't do things like this if they weren't legal". Last night's programme showed, quite succinctly, that they do and will continue to do so unless enough people assert their rights.

The banks cannot, reasonably, expect people to believe that they, armed with teams of lawyers, are shying away from court confrontations and refunding monies out of the goodness of their hearts. Kieron from Matrix Chambers hit the nail on the head when he said he does not believe that they can defend their cost structures in court as reasonable administrative charges. They have been caught stealing money from people and there are those who are minded to ensure that justice is done as we would expect in any such similar criminal case of theft.

They've been stealing money and people are getting / claiming it back. Fact.

Then you are disagreeing with the bbc and the consumer action group site, not saying you are wrong just saying that they are saying that penalty charges are not allowed to xceed the cost of admisitrating the charge, which means in affect you can do a penalty fee but it has to be in line with costs.

Considering they reduced credit card fees to £12 this backs that up.

If fees are illegal full stop then why were the credit card fees reduced instead of removed.

Why did the bbc goto the trouble to do an experiment on how much it costs to bounce a cheque when its not even relevant?

[Mr Angry]

Originally Posted by Chrysalis

Then you are disagreeing with the bbc and the consumer action group site, not saying you are wrong just saying that they are saying that penalty charges are not allowed to xceed the cost of admisitrating the charge, which means in affect you can do a penalty fee but it has to be in line with costs.

Considering they reduced credit card fees to £12 this backs that up.

If fees are illegal full stop then why were the credit card fees reduced instead of removed.

Why did the bbc goto the trouble to do an experiment on how much it costs to bounce a cheque when its not even relevant?

I am not disagreeing with anyone, I'm simply stating a fact. "Administrative charges" are "administrative charges" up to the point that they exceed the "administrative costs" whereby they become a "penalty charge".

With all due respect we've been round the houses on this one. The OFT gave it's opinion on cc charges, not the definitive law on same. Had the OFT said it considered the threshold of £6.00 to be fair then the banks would have reduced it to £6.00 . Again I refer you to my quote from the OFT ""....and a court will certainly not consider that a default fee is fair just because it is below the (our suggested) threshold (of £12.00).�

There is a very real difference between the opinion of a Government body and the law - which is why John Fingleton worded his statement in that fashion.

As for the cheques - they are one of the few processes left in banking which require "human intervention" which is quantifiable as an administrative cost.

[danielf]

Originally Posted by Mr Angry

I am not disagreeing with anyone, I'm simply stating a fact. "Administrative charges" are "administrative charges" up to the point that they exceed the "administrative costs" whereby they become a "penalty charge".

I've asked this before in another thread (and someone's brought this up in this one): I'd be interested in your opinion on the non-DD charges that NTL (and other companies) charge. From what you say above I conclude that, where they are deemed to exceed the actual administrative cost, they would be considered penalty charges, and therefore be illegal.

Seeing that NTL will happily apply a £5 non DD charge for a Broadband account @ £17.99 pcm (roughly 30% of the total charge), it appears to me that they either: have incredibly inefficient billing procedures, or are extracting the urine and have found a little money spinner which may turn out to be illegal.

[handyman]

Originally Posted by danielf

Seeing that NTL will happily apply a £5 non DD charge for a Broadband account @ £17.99 pcm (roughly 30% of the total charge), it appears to me that they either: have incredibly inefficient billing procedures, or are extracting the urine and have found a little money spinner which may turn out to be illegal.

If it was a discount for paying by direct debit I think they would get away with it.

[danielf]

Originally Posted by handyman

If it was a discount for paying by direct debit I think they would get away with it.

You're probably right. They might not look as good in price comparisons though...

Fact is though, it is a DD charge, not a discount to DD payers, and £5 a month -every month-, seems excessive to me.

How the hell can you justify charging people £5 a month for choosing an alternative method of payment when they provide a service which requires an extensive hardware network, maintenance, planning, as well as billing? I don't know what the average punter pays NTL each motnh, but i suspect £5 is a significant percentage.

I pay by DD btw (always have), so it doesn't affect me at all. It just looks like daylight robbery to me, and I'd be interested to hear about the legalities of it.

[Mr Angry]

Originally Posted by danielf

I've asked this before in another thread (and someone's brought this up in this one): I'd be interested in your opinion on the non-DD charges that NTL (and other companies) charge. From what you say above I conclude that, where they are deemed to exceed the actual administrative cost, they would be considered penalty charges, and therefore be illegal.

Seeing that NTL will happily apply a £5 non DD charge for a Broadband account @ £17.99 pcm (roughly 30% of the total charge), it appears to me that they either: have incredibly inefficient billing procedures, or are extracting the urine and have found a little money spinner which may turn out to be illegal.

The exact same methodology applies though the contract terms (where direct debit is stipulated - as is the case with the majority of BB accounts) would hold considerable relevance. It could, however, still be construed as an unfair term in the contract for those who don't pay by direct debit as they are being charged £5.00 more for an identical service whether they pay or not.

Either way - if someone writes to NTL to ask for an exact breakdown of the charge I'd be very surprised if they got an answer detailing same. On that basis alone I'd suggest they would be as equally uncomfortable / vulnerable as the banks were someone to threaten litigation.

[Chrysalis]

Originally Posted by Mr Angry

I am not disagreeing with anyone, I'm simply stating a fact. "Administrative charges" are "administrative charges" up to the point that they exceed the "administrative costs" whereby they become a "penalty charge".

With all due respect we've been round the houses on this one. The OFT gave it's opinion on cc charges, not the definitive law on same. Had the OFT said it considered the threshold of £6.00 to be fair then the banks would have reduced it to £6.00 . Again I refer you to my quote from the OFT ""....and a court will certainly not consider that a default fee is fair just because it is below the (our suggested) threshold (of £12.00).”

There is a very real difference between the opinion of a Government body and the law - which is why John Fingleton worded his statement in that fashion.

As for the cheques - they are one of the few processes left in banking which require "human intervention" which is quantifiable as an administrative cost.

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.

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.

[Mr Angry]

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.

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.).

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.

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.