Ten banks were written to requesting information about there charges and if they would be willing to “provide us with justifications for these charges”.
Only 3 banks replied to the letter, 2 of which merely enclosed their charges and refused to comment. The one remaining bank was Abbey National. Abbey were the bank involved with the 600% settlement to Stephen Hone, yet they still justify their charges as if they had not settled to keep it out of the higher courts. But at least they had the courtesy to try!
An extract from the response is below Abbey
“Our charges cover the cost of administration in having to return items unpaid, or pay items by using Abbey funds. Therefore, the value of the transaction has no bearing on the charge amount, nor does the amount overdrawn or the time it remains overdrawn. The charging policy is also intended to encourage customers to maintain their account within their authorised limit.”
Although Abbey response clearly shows there charges are unenforceable, we would like to thank them, for a least having the decently to respond.
3 points can be drawn out of the Abbey Response and criticised
* The Unfair Terms in Consumer Contracts Regulations 1999 No2083 states that a term is unfair if it “requires any consumer who fails to fulfil his obligation to pay a dis-proportionately high sum in compensation” therefore allow there argument of a control mechanism may be common sense it is unfair and therefore not binding on consumers.
* The losses which could legitimately be recovered as actual losses the bank may charge the consumer. Such things could be; administrative costs (being everything is computerised that is hardly a high figure) and interest lost by having to pay out of bank funds to cover the items. Logically, the amount of interest lost would fluctuate dependent on the value of the transaction, thus the charge should be linked to the value.
* If the banks are right and the value of the transaction should have no link to the charge cost and the period overdrawn also has no effect then why do some banks such as Woolwich charge a daily penalty for being overdrawn. Also First Directs charge for bounced cheques and direct debits etc fluctuates depending on how much the transaction was worth.
Challenge Bank Charges - says lawyer BBC Radio 4 Money Box
Ian Mullen, Chief Executive of the British Banker Association (BBA), told the programme that banks were not charging customers more than the actual cost.
He said "The banking systems are geared to an automatic process, so when a cheque or a charge sends an account overdrawn or over an agreed limit this involves manual intervention: to extract the item from the day work, to research the customer recent credit profile, and then a managerial decision as to whether to return the unpaid item."
However, this process they are claiming as their actual loss seems ludicrous considering if they decide to pay the transaction and put you in your overdraft you will also be charged.
Ian Mullen also said that many of these successes were students who the banks recognised had problems: "We are dealing with students, and banks are very keen to see that students are serviced optimally. We know students today are in financial difficulty."
This is hard to comprehend as banks are profit making organisations and although they do all they can to attract students who have the possibility of earning high in the future they also want the highest profit possible. Also it should be noted that student accounts have limited or no charges so the majority of the cases can not be students as they are not charged in the first place. And you will find high end fake rolex watches from here.
One of the listeners to the show said
" I am a computer programmer. I know what is involved and I think the charges are far in excess of what it costs the banks."
The cheque is in the post- Is it just one big profiteering scam - www.bankchargeshell
Often, people get fined by their banks because of the UKs antiquated clearing system – you pay a cheque into your account to cover a transaction, but then still get fined because it did not clear in time.
This is particularly bugbear. For the 4 working days it takes for a cheque to clear dates from the era of clerks reconciling accounts between banks manually with quill pens and paper.
In this day and age, when everything is done automatically, there is no way that 4 working days is any longer justifiable – the banks cartel has kept the clearing period at 4 working days to give them an excuse to earn interest on people money while it passes artificially slowly through the system.
CURRENT BANK CHARGES
A list of bank charges (correct as at 04/06/06):
|BANK||OVERDRAWN CHARGE||BOUNCED PAYMENT CHARGE|
|Co-operative Bank||£25 then £15 per day up to 5 days||£35|
|Alliance & Leicester||Day 1 = £0
Day 2 = £25
Day 3 = £0
Day 4 = £0
Day 5 = £25
|Lloyds TSB||£30 up to a maximum of £90 per month||£35|
|NatWest||£28||£35 - £38|
|First Direct||£25||£15 - £40|
|Abbey National||£20 - £30||£35|