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However, there is legislation that says penalty charges may not exceed the cost incurred.
Actually - there's a thought. Surely the same would apply to fixed penalty fines for speeding?
True, but surely the banks, or in your example, the police can argue around this. For eg.
'It may only take 5 mins of a coppers time to lecture you and write a ticket, which in the scheme of thing/working to their salary may only cost £1.30 for example. BUT the employers will then have other costs which lawfully they could offset against this: for eg... staff training, uniform, the risk they will one day loose money at an appeal case, the cost of coffee in the Klix vending machine' - plus many more.
But can easily be added up and for big organisations the cost of having employees can be easily made to look substantial in comparision to a £30 overdraft fee etc
The banks have been invited to show their breakdown of costs, and they wont.
Why won't they? Because it costs them nothing or pennies each time! Get a grip will you.
Shyboy - penalties for breaking the law are a bit different, don't you think?
This is not to do with legislation, it's to do with common law, as set out in previous cases etc.
I don't understand why people think it's OK for banks to unlawfully take peoples money?
http://news.bbc.co.uk/1/hi/business/6418365.stm
The common law on this goes back hundreds of years, and nobody has had any complaints about it before. Contracting parties have a legal responsibility to mitigate their losses and to ensure that penalty clauses only cover actual financial loss. Onerous contractual agreements can be discarded. It costs about £2 to send a letter out telling someone that they are overdrawn. The bank, in 99 cases out of 100, chooses to let the customer go overdrawn. The banks' position is completely untenable legally, and I fail to see why 200 years of law should be thrown out of the window for the benefit of HSBC's fat cat directors.
The bank also charges an extortionate interest rate for unauthorised borrowing, usually around 30% APR, which is the service fee for going overdrawn.
Unless you go overdrawn by issuing a guaranteed cheque, then the bank chooses to let you go overdrawn- that means that it is assumed to have consented to lending you the money. If the banks are so worried about unauthorised lending then they should prevent people from borrowing money without authority- they should decline cards. They obviously aren't worried about people borrowing money from them like this, otherwise they would prevent it.
Why should HSBC be allowed to break the law?
I cant wait for the test case tbh. I hope the guy who's taking the banks to court though has proper legal representation...
By the same token, if the banks don't want you to go overdrawn then they can refuse to honour payment/cash withdrawls - remember they "authorise" any charge against your balance - chip and pin mean anything to you?
Thing is they make a packet from the practice, so it's in their interests.
You will also note that no bank has let this issue go all the way to the courts. Why do you think that is?
And obviously it will be the poorer customers who get the higher charges...
Erm... what has this got to do with "compensation"?
This is civil recovery of money which has been effectivelt stolen from your account. The bank acted outside of the law and so should repay everyone they took money from.
As with my previous post, why do you think that no bank is willing to let this get before the courts?
On my personal account I have no overdraft and ended up going under by £400 in the space of one week as big cheques were going out to cover my wedding costs.
End of February, a letter arrives from HSBC saying that they have charged me £100 for this misdemeanour!
What really gets my goat on this is that at that exact time, on my joint account, I had about £9,000 which the bank were happily earning interest on at the time of charging me.
I am going to send off one of those letters but will add in a few bits of my own...
A colleague of mine's mother is dying, so she can't get to the bank to pay her pension in. She went about £5 overdrawn, and so Abbey charged her £120 in fees. Even when they were told why it happened, they refused to do anything about it.
What sort of low-life cunt nicks £120 from a dying woman? If it was a builder who'd done that he'd have had the book thrown at him, but because its the fatcat bank director that did it he gets a fucking knighthood.
Honey, if I'd been told that I was going to be having my account changed so that I could take money out that I didn't have, and that they'd charge me for it, I wouldn't have quite so much of a problem. £30 for going less than £5 overdrawn takes the piss a bit though, and they changed my account without telling me, because "some people would abuse it if we told them" - and those are the exact words that came out of the woman's mouth when I went in to complain about it. I didn't agree to it, they just changed it because that's what they do "when customers have been with the bank a certain amount of time". And if that's in the fucking small print when I first got the account, then excuse me for being a 10 year old and not having read it :thumb:.
I also agree that they shouldn't let people take out money they don't have, unless they have an agreed overdraft.
That's how I got my charges, I knew I had £50 ish in my account, and thought if I don't have enough then the card wont be accepted. I ended up spending about £65 and it cost me £120. Barclays gave me back £60 when I asked, and I decided I couldn't be bothered with the hassle of the rest of the court letters etc.
Suppose that's their theory, but works about about £15 a charge then, and the bank regulator has said that £12 a charge may be a fair number, so I'm not too upset.
The idea that in some way people are being immoral for complaining that they've money stolen from them seems ridiculous