Sorry to jump on this thread...
I have been a member of the Consumer Action Group for a while now, and have read many posts / threads by many people in many walks of life.
I would appear to me Linford, you have missed the response by kirky.

Under English Law UTCCR, a charge levvied against a consumer for breach of contract, should reflect the liquidated damages incurred. If said charge is excessive or disproportionate to that liquidated cost, it is and will be viewed as a penalty (deterrant or not) and as such by English Law is irrecoverable.
Regardless of the claimants financial astute-ness - these banking charges are illegal, and unjustly enriching.

my, with your arrogant attitude, you OUGHT to work for the banks...........


do NOT get shirty with me matey............!!!!!!

if you CARE to read my FACTUAL reply, you will notice that I have suffered these charges !!!!

it was my OWN fault I got charged them....................yes, their level is high, but that is the deterrent angle.................

I am NOT siding with the banks, BUT some people in the bbc21 programme were obvioulsy NOT poor, but simply were not handling their finances properly...............YES, I accept if the very poor are being hit, then that is different !!!!


re-read my reply again.............!!!!!!!!!!!!!!!!!!!

I await your apology.......................

You are missing the point Linford, If it said in the terms and conditions across all banks "if you go overdrawn we will shoot you " and you had a situation where you had a client who did not pay you in time so you were unable to meet your commitments as a result would you hold your hands up and say, well it was in the terms and conditions and i knew about this so where do you want me to come to be shot. I think not, The principle is the same, they are legally not allowed to make a profit from a default, disguising it as a service is a noncence and the unfair terms in consumer contracts act deals with this in detail.and we quote the relevant terms when dealing with claims. There are tens of thousands of people who for one reason or another often cannot meet their commitments, They are the most vunerable people in society and it is these most vulnerable people that the banks hit hardest, "kick them when they are down". springs to mind. "You didn't have £10 to pay that bill you only had £9, so we won't pay it but we want £35 for doing so and we will take that irrespective of whether you have funds in your account and if that makes you unable to pay further commitments then we will charge you for bouncing them as well, yours your wonderful bank."

Don't say you only have to ring them and let them know as that is a load of rubbish. If you ring and tell them you are having problems, if you are not able to get an overdraft extention, they won't agree to waive the charges. They treat us as a purse that they can dip into whenever they like.

Why should those in the hardest financial situation subsidise those in the best by being penalised and stolen from by the banks.

yes, having watched the very confusing bbc2 programme of 12/12/06................it seems that the banks will settle out of court and some will actually go to court, but in the cases highlighted the claimants got virtually all their charges back............


however, what I cannot fathom is in one case the charges were over £12,000 for approx 5 years ........surely the customer obver this period of time could have AVOIDED SUCH CHARGES by NOT issuing cheques KNOWING they would not be honoured !!!!!



yes, the charges may be exhorbitant and "unlawful", but now the banks are protesting that this is a "service charge", not a fee or penalty. so they will be much harder to contest...................



and agian, I still say ALL these customers WERE FULLY AWARE of the level of such charges in advance and HOW THEY WERE TRIGGERED, which was under their OWN control...........................



4 yeas ago I suffered about £120 of such charges, due to particular circumstances, and although the charges were high and put me into further overdraft, I do fell I have recompense, as it was ME WHO TRIGGERED THEM !!!!!!!!!!!!!


it would be interesting ti have known EXACTLY from the programme in detail, ( which were NOT TOLD ), HOW these people's charges were triggered and WHAT steps they took themselves to rectify the charging trigger immediately......................I suspect they did NOTHING because of their obvious bad financial positions..................................

let's here via this site their replies............

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!

Hi Linford,

I can only hazzard a guess that they didn't expect to ever be challenged over them. A make hay whilst the sun shines approach.

If it weren't for Stephen Hone the Law Student who first challenged them publicising his victory, they would probably still be getting away with it now.

I did Law as part of my Marketing Diploma and contract law was covered in depth, but like most people had the view that banks were too big to be challenged and must be operating within the Law or someone else would have challenged it. My hat goes off to Stephen for having the nerve to.


Lee


Lee

Hi cool1charlie,
I totally sympathise with you, this has happened many times to me, you should get hold of the financial Ombudsman, who regulates these banks. They are trying to bring down the bank charges, they have done this to some of the credit cards. There are so many hidden costs in our banks we do not even know they are taking our money, so much for free banking. I have heard of taking your case to the small claims courts, I think this is a good idea, the bank probably will not turn up to contest it anyway, in most cases. I think this bank has treated you badly, you have been a good customer for years, as a goodwill gesture, they should drop the charges. You could even get intouch with the Mail paper, they cover a lot of financial issues about banks. You have made the first step to name and shame this company, people will think twice before they go with the Alliance and Leicester. In 3 years they have made interest on your money and continue to do this with these bank charges, you do not upset customers, or they take there custom else ware, its about time they took notice of this and listen to what there customers are saying to them, and stop taking advantage, of the difficult circumstances there customers find themselves in from time to time. Merry Christmas, cool1charlie and the Alliance and Leicester, have you heard of Ebineezer Scrooge, well this is you.

Thank you for the detailed reply which takes me back to my basic law classes in 1971 at college !!

However, given all this precedent case law etc etc, how come the banks expensive in-house legal teams who write the banks terms and conditions did not take into account your obvious legal justified protestation over them ??


very confusing.............

Hi Linford


This was posted by me on another thread but is equally valid to explain.



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.”


Kirky1969 (penaltycharges.co.uk moderator)

Kirky,

I am confused by your reply to me................although I am not on the side of the banks, having signed and AGREED to their trading conditions when opening an account ( and that includes your agreement to allowing to it CHANGING FEES AFTERWARDS ), I fail to see HOW their charges are actually "illegal"..................yes, they may settle out of Court to avoid such hassle, but they can afford to pay people off by the 000's of people's charges who just pay up without complaint....................


yes, I know the consumer's council has ruled that the banks should only charge "what the cost is to them" eg £12 ( OR LESS ) and not the excessive £35 etc figures that some do, but nevertheless it is us stupid public who firstly sign up for these accounts with these charges notified to us IN ADVANCE and it us who TRIGGER THEM OFF........................


It is the banks, who, in the first place should be symphathetic to the customer when they first trigger a charge of this kind and to prevent the spiraling circle that soon entails after these charges start.....................


please explain upon EXACTLY what point of LAW that the successful refunds have been made.......................I AM INTRIGUED.......

It all started on the trevor mcdonald toinight program when the penaltycharges website was mentioned.

My other half got her charges and things happened exactly the way the website (penaltycharges.co.uk said it would. She got it all back all £934.68 from the Halifax and that was going back over a 5 week period.

Brilliant just the power of the internet and television without these things she would of probably never even bothered.

These banks have had it tooo good for too long ripping the british public off.

HSBC take note you will not get away trying to force people to take sub standard products in favor of paying a £10.00 fee because many of us do not get paid £1500 month nor have a minimum balance of £1500

Thanks Lee, I am very grateful for the information that you provided. You are right and it is totally unjustifiable to levy these extortionate bank charges against their customers. I know this term is used quite loosely but it is daylight robbery, do the banks honestly think that their customers will continue to tolerate their actions? It seems like the worm has turned and people are finally fighting back.

The annoying thing is that I forewarned the Alliance and Leicester that I MAY unfortunately be slighly overdrawn at the start of November and asked for a temporary overdraft, or at the very least a £50.00 'buffer zone' to allow for this. The bank refused so I had to cancel a Direct Debit to avoid going into the red - unfortunately the bank couldn't even get this right and allowed the Direct Debit to go through.. hence pushing me into the red and subsequently incurring a failed Direct Debit charge and also an unauthorised overdraft charge. With these charges it has only served to increase my 'unauthorised overdraft', which means that now I have to explain to my mortgage lender as to why I cannot afford to pay the mortgage this month!

Admittedly I only have a Basic Account, which was taken out because of my current financial circumstances (which are too personal to mention on here!), and the bank's recent actions are something I could really do without right now!

Anyway thanks again Lee for the information, I will take a look at the website later today and send some letters off asap.

Simon

Sorry but linford you couldn't be more wrong

Yes It is totally possible to get all your bank charges back. I moderate on Penaltycharges.co.uk which was set up by Stephen Hone, the Law Student who first challenged Abbey over his charges. The site is totally free and no non profit making so hope posting about it here is OK. It has all the letters and templates you need to claim your money back as well as a full guide and tailored advice from our team of moderators.

So far ALL claims made by people for return of bank charges have been succesfull over 10000 members and 500K refunded to members so far.

The charges are unlawfull and the banks know it, They very very rarely don't settle before the court date. You can also claim all your charges and 8% interest per annum going back six years which can be very worth while.


To those who say you should be more careful and you deserve to be charged, please remember, no one is perfect and the banks have been mugging us for too long, they are only allowed to charge what it costs them and not make any profit when a customer defaults on their account.

Lee

Thanks for the advice, I am definitely considering switching banks. It sounds as though you have had a rough ride with the banks as well, in the past. I recently requested a 'buffer zone' for my account with Alliance & Leicester, albeit for a short period whilst I sorted out my finances. The bank were having none of it, instead preferring to take a hefty slice of my money via their extortionate bank charges when I dare venture into the red zone .... I wonder why!!

I have noticed Alliance & Leicester have had a great deal of bad press in the media regarding the way in which they apply their charges. It did admittedly get my hopes up a little, knowing that perhaps there could be legal recourse to recover the charges from the bank. Oh well... once bitten, twice shy!

I had a similar experience 3 years ago with the halifax and the woolwich.

the woolwich were very arrogant and unhelpful


halifax equally abhorent


at least the woolwich has a £50 "buffer zone" which means you can go negative up to that amount authorised ..........to include direct debits .................


you ought to check their account out.................you get electron deboit card and cheque book with it


let us know................


ditch your account

unfortunately, the charges are "as per terms and conditions" that you agreed to..................the Court will not help you


yes, the charges may be high, but that is how they easily make excessive profits