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I read in the paper today that a court case is going to decide whether bank customer have been unfairly charged for such as unauthorised overdrafts etc.
When you open a Bank account you agree to their ts&cs. Why should you be able to turn around at a later date and complain they are unfair?
The bottom line, as I see it, is that if they (the banks) lose we, the majority of organised customers who have not incurred these charges, are likely to find ourselves being penalised by the banks charging for all accounts.
I don't blame the banks , but the OFT who have, once again, not forseen the consequences of their actions.
I agree with ened. If my neighbour was a bit short of money, so decided to help himself to a loan from my account, I'd be pretty hacked off with him. And I'd expect a good whack of interest as compensation.
Why should bank customers be permitted to borrow the bank's money without their permission?
Unauthorised overdraft penalties should be as high as the banks want them to be. It might deter some of our more irresponsible brethren from spending money they haven't got.
I've never been in the red with my bank account. But I have been charged a ridiculous amount for a letter they sent me once. After walking in my branch and threatening to take my account elsewhere they refunded it pronto. But I don't think all the overcharging is as straight forward as that incident. Jeremy Vine gives good advice about reclaiming from banks. I think you can find him by googling or checking when he is on BBC.
If someone 'borrowed' money from me without my consent, I would be charging them a lot more than £25...the banks seem to be giving a good deal.
Blimey, I'm having an off day.. I meant Martin Lewis of course, but he does appear on the Jeremy Vine show regularly.
"When you open a Bank account you agree to their ts&cs" - yes, but they're constantly changing them.
My bank recently changed it's overdraft T&Cs while I was abroad for some months. Previously I had an agreed £500 o/d facility which was (under the new T&Cs) reset to zero unknown to me which meant that when I went o/d from a cash point withdrawal I incurred a £25 fee because the bank treated it as a request from me for a new o/d facility for 1 year.
I subsequently withdrew another amount which took me up to what I thought was my limit (£500) and was promptly charged another £25 because it was treated as a new request for an increased o/d facility for 1 year.
I hadn't agreed to the change in the T&Cs - I've now changed banks.
I think you are missing the point. When you go over your overdraft you are charged interest on the money you have 'borrowed', anything up to 27.9% in some cases.
What customers are now objecting to is the fact you are are charged a disproportionate amount for a letter to inform you this, plus extra fees, which can rapidly escalate the charges you end up paying!
Fees should only reflect the true cost, not make a profit for the bank!
'Fees should only reflect the true cost, not make a profit for the bank!'...utter rubbish, the banks are not charities and exist to make profits. This is how business runs in the 21st century. As I wrote earlier, if someone borrowed money off me I would want a lot more than £25, so the banks are letting people off lightly.
Yes, interest rates are high for unauthorised borrowing. By definition, interest rates reflect the risk to the lender. It's why mortgages are so much cheaper than unsecured loans and overdrafts. And if the borrowing arises without prior agreement, the risk to the bank is therefore much higher.
Furthermore, banks have to spend time investigating unauthorised debt and ascertain what action, if any, they need to take to recover it. The rule is simple, keep a track of your finances and you will not need to pay.
The threat now is that if the banks are forced to reduce their charges for unauthorised debt management, they will introduce charges for the rest of the banks' customers to maintain their profit margins.
'By definition, interest rates reflect the risk to the lender.'
Exactly, so why would you be happy at being charged twice for the same error! This is where the Banks make their money, but to charge £20+ for a computer generated letter is exacerbating the problem!
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