I get the issue and here here to your comments. Banks have been acting fraudulently for years. We (the little people) have accepted it as we all thought a bank was beyond rebuff, but now we know different. They have been comitting what can only be discribed as fraudulent accounting practices but unfortunately a bank under statute law can never be convicted for fraud. (I don't know why but would love to know what the thinking was behind that one). This is a very major turning point for bank customers. We no longer have to accept their underhand tactics. We at penaltycharges.co.uk are all waiting for one of the banks  to be forced into court to alow them to try to justify their punualative charges, but the banks are not playing ball as they know they will loose.

 

Lee

penaltycharges moderator

Nobody gets the issue do they! people have paid their charges they went overdrawn for direct debts or cheques bounced and charges have been applied and paid end of story thats not the issue...  the ISSUE here is that now consumers have found out the amount they paid IS IS IS unlawful no ones moaning about paying charges its the amount that the banks have fraudently been taking... when are people going to get the issue.

 

This is for all the people who side with the banks and who say the charges are lawful and we signed a contract with the bank to say we pay penalties of £35 or whatever ...We the consumer took this as their right to charge that, we as the consumer were none the wiser because we had been lied to  please look at the real issue whats on trial here is the AMOUNT the banks are charging we have never questioned  the amount of a charge because we thought the banks had a right to charge that amount but they dont the law says they dont.....if i got overdrawn the banks have a right to penalize me thats ok i,m not disputing that nobody is but i will not pay £35 when all its cost in £4.

I see many posts like this theres always one who just because they keep their bank account tip top they side with the banks...this is all being read wrong the issue is not about people going overdrawn and being charged for it yes we know when we sign up for a bank account you go overdrawn you pay but what the banks have failed to do is be honest about how much it actualy costs to send out letters or put an acccount overdrawn they have not been honest to the consumer and have used this to exstort money from people...ask yourself this question IF the charges were lawful then how come people can get them refunded???how come a court of law finds them guilty of unlawful charges???....like i said its not the fact that we are charged its the amount the banks are taking and making a very large profit no one is moaning about being charged for being overdawn thats a penalty that we agreed to when we signed for a bank account but the banks have pulled the wool over peoples eyes you know there are many times when mistakes are made my bank right now has charged me £23 for being overdrawn i was not overdrawn i had banked over £400 in my bank but because i had also paid in a cheque they decided to keep my cash overnight and make me overdrawn do you think thats fair???? and thats just one issue that is happening with banks all over the country....so just think about the real issue here the amount banks charge the goverment say its unlawful and the courts say its unlawful dont put people down for claiming back bank charges and thats great you keep your bank in shape but you never know whats around he cornor and what situation you will find yourself in because Jules sometimes you dont get any warnings.

Please be advised that you have been robbed!

I have a similar experience whereby I had just under £2.00 credit in my account. However I received several days later a letter saying I had wrongly gone over-drawn and as such was lieable to £8.00 a day charges. I wrote to the bank asking for an explanation FROM THE MANAGER and received a letter instead from the branch customer care officer to call them.... Call them in relation to almost
£100.00 in bank charges (screw them)! It appears the bank (Yorkshire Bank( charged me £25.00 charges (not known to me what they are) however I am again having to write to the manager asking for an explanation, not a customer care officer, so that I can innitiate a complaint to my local police with regards to theft.

For simplicity................................ I was in credit by £1.96 on 12-JAN-2007. The bank then took £25.00 in bank charges (no explanation of what the charges were) on 18-02-2007) which resulted in me being charged £8.00 per day until my next pay day being 31-01-2007
So by 30th Jan2007 my account showed a deficit of £96.03, that means one day being in credit by £1.96 to becoming £96.03 in debt!!!!!!!!!!!!!!!! Pure theft. Hence the branch manager is pamicking........................................

DO NOT STOP COMPLAINING, Anybody who wants an update to my claims against Yorkshire Bank can contact me on the following email, I have nothing to hide so dont mind sharing my experience as I begin legal action against the Yorkshire Bank.................

pfailla AT tiscali.co.uk I am not afraid to take on the big boys!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!



Pasquale known as Lee for short.

I too am confused by the enthusiasm people have for paying for bank services. I would rather have free banking and be occasionally penalised if I am negligent. This is yet another example of powerful consumers seeking to exploit the poor and vulnerable. Yet another example of the pressures of the free market penalizing the poor. Of course, these days, the poor are not worthy of being discussed or considered.

Destroy the fixed price books agreement. I now have the freedom to only pay 2.24 for Posh's biography and the freedom to have to pay 11 or 12 pounds for a Flannery O'Connor novel. Boy, is that helpful. Weren't it terrible in the old days when all a-format paperbacks were £1.75 and all King Penguins were £2.50.

Destroy the postal service. I no longer get deliveries in the morning. But at least it costs Time Life and Reader's Digest and Capital One less to post their mailshots. I look forward to when I don't have to subsidise people who live in villages. Long live the time when I can spend 20p on a stamp whilst scummy yokels have to pay £1.50 to send a Christmas card. That's fairer. Let's set up a website to protest this hideous anticompetitive cross-subsidy.

I bought an empire biscuit today. It had a glace cherry instead of a jelly tot. Not sure if that's apposite to this rant, but thought I'd mention this outrage anyway.

I had to pay an extra fifth of a penny per minute in call charges so that some old biddy could get £2 off her line rental? Disgusting.

etcetera etcetera

Hey, I agree that the current bank penalties are egregious. But at least their threat helps my fiscal diligence. Somehow I don't think the resolution they settle on after the current furore settles will be any better.

Follow the link for definitive advice:

http://news.bbc.co.uk/1/hi/business/6170209.stm

Of course the more people claim back in (unlawful) bank charges the closer the day that "free" banking ends for all of us!

um more probably more than likely

Excellent Lee, I hope this will shut the perfect Jonnie Boi up!!

Just out of curiosity Jonnie, do you work for a bank?

Cheryl

Ok, Here goes Jonnie-boi

1) References

Charges are Unlawful as stated in Unfair Terms in Consumer Contracts Regulations 1999. Schedule 2 (e) of the said regulations gives a non-complete list of terms, which may be regarded as unfair, such as a term that requires a consumer who fails in his obligation, to pay a disproportionately high sum in compensation. Unfair clauses are unlawful and cannot be enforced.


They are also unlawful as they are a penalty charge, and penalty charges can only reflect a companies actual loss, they are not allowed to make a profit from a default by the other party.

Common law Principles (Penalty charges are irrecoverable at common law)
The precedent for this was:


Dunlop Pneumatic v New Garage [1915] AC 79.


Lord Dunedin set out some tests that are considered even in modern cases when the court is asked to rule on penalty charges.

They are;
a) If it is "extravagant and unconscionable" i.e. that the cost incurred by the business because of the breach is lower than what the consumer is being expected to pay because of the breach.

b) It is also a penalty where the consumer is to pay a larger sum due to failure to pay a smaller sum.

It was held that a contractual party can only recover damages for an actual loss or liquidated losses

Further more recent examples of where this has been applied include

Murray v. Leisure play [2005] EWCA Civ 963


“English contract law recognises that, if the parties agree that a party in breach of contract shall pay an unjustifiable amount in the event of a breach of contract, their agreement is to that extent unenforceable”


CMC Group Plc And Others V Zhang [2006] EWCA Civ 408.


“'Whether a provision is to be treated as a penalty as a matter of construction to be resolved by asking whether at the time that the contract was entered into the predominant contractual function of the provision was to deter a party from breaking the contract or to compensate the innocent party for breach. That the contractual function is deterrent rather than compensatory can be deduced by comparing the amount that would be payable on breach with the loss that might be sustained if breach occurred.”


2) They take whatever they like

Who sets their charges? They do,,, therefore they do take whatever they like. If you go out to unlawfully take £100 and you unlawfully take £100 then you have still unlawfully taken £100 the fact that you knew what you were taking makes no difference. They . take these charges without the consumer having any ability to stop them.

3) You also mention that they give notice of their unlawful charges

Some do, others dont. The co op for example will bounce a direct debit to stop you going £5.00 overdrawn and on the same day charge you £19.50 for the privelage, thus making you overdrawn by more than you would have been had they let it go through. Even with notice if someone tells me they are unlawfully taking from me on a certain day and then does just that it is still unlawfully taken.

I am fully aware of the banking code which is a BBA (British Banking Association) set of guidelines by the way not a FSA one as you state. These are voluntary only and suggest the banks to give at least 14 days notice of charges applied to your account..

If you think they are in the right then why are none of them challenging the 1000's of cases that they have against them in the court and why are they settling every claim before the court date.

Tha answer is obvious, they know they would lose and that would cause the floodgates to open even more than they are to new claims due to the publicity it would cause.



kirky1969 (penaltycharges moderator)

For further clafification i suggest you visit the web site penaltycharges.co.uk which will explain everything to you in terms of what rights we have as consumers to protect ourselves from profiteering organisations.

In reference to a couple of your comments Lee:

You say "The fact is the charges are illegal and bordering on fraud by the banks. This is fact not fiction."

Could you give me some stats to prove this "fact"...if they are in fact ILLEGAL the banks would not be in business! So give me the fact that you so insistently refer to.

You also say "They are the only organisations with a direct ability to pinch whatever they like directly from your account and that is what they have been doing for years"

So they "pinch whatever they like" you say, every bank have a SET charge for a particular incident (eg bounced cheque/unpaid DD)
therefore they do not take what they feel like on that particular day. You also state "...directly from your account"...this gives the impression they just snatch the money from you without your knowledge...banks will tell you on your next statment exactly what charges you have incurred and when they will take them. This is part of the Financial Services Authority guidelines and every bank follow this procedure.

Hi Lucas

I am having a nightmare with this at the moment too, I changed to Alliance & Leicester a few months ago, lured in by their high interest rate and I too slipped into my unauthorised overdraft as I set up a direct debit for the same day as my salary went in by accident, and the direct debit came out first making me overdrawn. I am now in a vicious circle where they take charges off me without warning at the end of the month which makes me overdrawn again (as I have not budgeted for them) and then I get more charges. I've been into the branch to explain and they were useless and basically told me if I wasn't happy to close my account!! I called them towards the end of last month to double check exactly what was due to come out of my account before my next salary payment to make sure it didn't happen again and they neglected to tell me about another 25 pound charge that they took out a couple of days later! I've never had this trouble before, I didn't expect them to be so unhelpful, one mistake is costing me a fortune! I'm not really sure what to do.....

What a holier than thou atitude you have jinnie-boy. The fact is the charges are illegal and bordering on fraud by the banks. This is fact not fiction. They are the only organisations with a direct ability to pinch whatever they like directly from your account and that is what they have been doing for years. They would not be settling everry claim out of court when challenged if they seriously thought they were within the law. The site i moderate on, penaltycharges.co.uk has over 10500 member, is totally free and non profit making, it and helps people reclaim the money that the banks have unlawfully taken. Over 500000 refunded in the last six months from that site alone.

They have been taking charges unlawfully as they cannot charge more than it costs them to administer the overlimit or missed payments and we all know it does not cost upwards of £30 for their computer to send a letter. That is the law in this country.

Rant over


Lee (kirky1969)

As a customer of First Direct, I find they're very understanding. If you point out a good reason for the unauthorised overdraft as a genuine mistake they alway refund. They are the best bank I've ever dealt with in 35 years banking.

I think it is completely ridiculous that some bank customers believe they are completely innoccent and deserve to have all their charges recovered. I am not affiliated with banks in any way and I am no different to most customers of high street banks. People need to start taking more responsibility over their finances, I know of people who know all too well they cannot afford what they are spending on their accounts yet dont care..until the charges are applied! Shock horror? I think not! what else do you expect?

If you cannot afford something do not use your card, dont set up any new DDs/S.O. or write out cheques. I understand times can get difficult, believe me I know, but through closesly monitioring my account and not spending lvishly, I have kept my finances under control. People make banks out to be evil however all they expect is some responsibilty on your part and 90% of the time they will assist, many now employ charge specialists to offer customers advice on how to avoid charges and they have greater authority limits when it comes to waiving or refunding charges...sometimes up to ten times more than their collegeues.

Here are some tips to help you out:

1)Only spend exactly what you have in your account, if you can't afford something do not buy it.
2)Cancel any DD?/S.O ect you cannot afford, or contact companies involved so they debit at a more suitable date-eg, day after pay day.
3)Try not to rely on your OD for day-to-day use, an OD should be their to assist you in emergencies/unexpected items so that you can actually avoid charges.

Most of it is down to common sense, take more control and dont be afraid to contact your bank with any queries, if you are calm and your not calling to threten them with a court order, you'll find they are happy to help, ask for a call back from a manager if your not stisfied with the memeber of staff your speaking to.

Afterall, who wants to pay their bank unneccesarily...keep within the limits!

well said Lee. I like your sytle.

Just gonna long into this person's web site.

Wish me luck