UK: Supreme Court Rules Bank Charges Are Legal.

http://www.guardian.co.uk/money/2009/nov/25/bank-charges-ruling-against-consumers

Dangit, we're one of the ones who has an application pending and hoped to get a good chunk back.  I'm annoyed.

I'm sort of unsure about this.

On one hand I agree that it is not for the courts to set a limit and therefore had to rule the way they did.

The fees are agreed between the bank and account holder so I can't see the problem. I mean I know what I am going to charged if I go overdrawn, I agreed to it. If I don't like it then I have several choices: don't go overdrawn, don't sign up to the account or petition my MP to raise the issue.

If fees are too high and should be limited, is this not the job of the gov't to regulate?

I can remember when I lived back in the US, if I wanted any kind of overdraft protection, it was only available at a few banks (I lived in a rural area), and it COST from penny one of overdraft.

Here, I have a £200 overdraft limit and the last time I was at my bank, they called me in to let me know I have quite a bit of 'wiggle' room if I'd like to up my limit.  Not on your life!!  In the past 4 years the highest I've gone into overdraft is £60 and that's far enough, thank you very much...but the thing is, I know that if I was having problems, I could request a higher limit (I knew that before they called me in), but I hope never to have to.

I'm sure people have 'situations' that cause them to go over the authorised limit...I'm just glad I'm keeping my head above water.

I was really confused about all of this when I first read it, because I thought they were talking about charges on accounts with overdraft limits, and I knew I was never being charged - I just thought I must have a very nice bank.   

I'm confused about this.  Did I miss something in the article?

It said that the "banks are unlikely to pay fees charged on UNAUTHORIZED overdrafts"...am I missing something here?  If you make an unauthorized overdraft (which is different than an agreed upon overdraft that has been approved beforehand by your bank) why should you NOT have to pay the fees incurred?  I mean honestly, isn't that just stealing?

The thing is, there are cases where deposits get delayed but automatic withdrawals go through as scheduled, so people are overdrawn by a few pounds/dollars often for a very short  time yet are still charged a huge overdraft fee.  If the fee were more reasonable I wouldn't mind but it obviously doesn't reflect the cost of processing the overdraft and is just another way for banks to squeeze money out of you.  Extreme fees shouldn't be allowed, thouh I admit I don't know who might prevent them.  

If the banks don't want people in unauthorised o/d they should simply bounce any payments that puts an account over its limit. The fact is they want people to go into unauthorised o/d so they can charge their extortionate fees. The because the fees take people further into unauthorised o/d they charge more fees and interest on top of that and so it compunds til you are hundreds of pounds in debt for what may have started out as a very small amount. I've read cases of people going o/d by  only one or two quid ending up with hundreds of pounds of bank charges.  Now that's stealing.

(x-posted with historyenne)

The thing is, there are cases where deposits get delayed but automatic withdrawals go through as scheduled, so people are overdrawn by a few pounds/dollars often for a very short  time yet are still charged a huge overdraft fee.  

I don't know if other banks do this, but when I deposit a physical check into my account at Lloyds TSB, the amount shows up on my "account" balance within a few hours, but I can't actually access the money until the check clears a few days later, and the money appears in my "available" balance. 

For example, if I've got £500 in the bank and I deposit a £1000 check, my "account" balance will read £1500 almost immediately, but the "available" balance will still be £500, and will stay at £500 until the check clears.  I find this weird and confusing, but Lloyds says it's to my advantage because they start paying interest immediately.

At any rate, I got hit with overdraft fees when I first came over here because I'd deposited a check, looked at my balance a day or so later, and thought the check had cleared (the balance that appears on the first page when you access your accounts online is the "account" balance, not the "available" balance).  Of course it hadn't cleared, so I wound up £15 into my unauthorized overdraft, and got hit with a £29 fee.

Now, as Mistress TL says, it was my own fault for not checking my "available" balance instead of my "account" balance, but I contended that this system of showing me two different amounts was confusing, and aside from that, the fee was nearly double the amount of the unauthorized overdraft, and should've been lower.  Lloyds (of course) disagreed.

So, in short, banks suck. 

That's the point of the argument.  If I remember, there are laws in the UK saying that fees must be proportionate to actual costs incurred by the bank.  Tell me really that it costs a bank £30 to send out a computer drafted note that says we went over.  The fees are not within proportionate levels, but are a money-making measure to offset "free" accounts.

We had one direct debit last year, which we had been led to believe was cancelled, so we hadn't banked on it.  It was applied, was a bit over out limit, and then for some unknown reason, they tried to redo it six to seven times over the next couple days in case it went through that time, but it didn't. We were charged £30 each time they attempted to put the debit through. Unfortunately, we weren't watching that bank account closely that month because we had our baby that week, so the same thing happened the next month.  It was a bank account that we thought was not being used at all, so we didn't worry.

It wasn't till we received that statement that we realized that we were being charged.  I accept that we should have caught it the first time and have some culpability, but we missed one letter because of a major life transition and I kid you not, ended up with nearly £400 pounds in bank charges over a £15 fee that should have been charged once or twice.  The bank refused to refund a single charge, and we had to come up with hundreds of pounds over something so minor.  I don't accept that as proportionate or appropriate.

Just to be the devil's advocate, it all comes down to the terms and conditions and the fact that bank account holders have signed their name to it in contract under the assumption they dont need to read it. but all Ts and Cs for any financial service will show you the types of fees and under what conditions they are applied. 

Of course we all make mistakes, and most places are willing to do a one time refund of fees, but we cannot... as consumers... act as though we are being "done over" because we signed our name to agreeing to accepting these fees.

Hmmn, I wonder what the court had to say about the Unfair Contract Terms Act.

Of course we all make mistakes, and most places are willing to do a one time refund of fees, but we cannot... as consumers... act as though we are being "done over" because we signed our name to agreeing to accepting these fees.

I can't speak for everyone else, but I'm not asking to be released from the terms of my agreement with the bank.  What I want is for the charge to be relevant to the size of the mistake.  If I go £10 or £15 into an unplanned overdraft, I should get hit with a fee that's proportionate to that amount.

We had one direct debit last year, which we had been led to believe was cancelled, so we hadn't banked on it.  It was applied, was a bit over out limit, and then for some unknown reason, they tried to redo it six to seven times over the next couple days in case it went through that time, but it didn't. We were charged £30 each time they attempted to put the debit through.

It's this kind of thing that is ridiculous.  Yes, you should've been charged, but once, not for each time they tried to run the charge through the system.

Just to be the devil's advocate, it all comes down to the terms and conditions and the fact that bank account holders have signed their name to it in contract under the assumption they dont need to read it. but all Ts and Cs for any financial service will show you the types of fees and under what conditions they are applied. 

Yeah, but there's no choice but to accept whatever terms and conditions the bank sets out.  No one offers an account with no overdraft fees, or even with reasonable fees, so there's no option to shop around or to choose not to open an account because the potential fees are too high.  People aren't overdrawing because of ignorance of the T&C, but because of oversights or errors, and often not their own.  I don't think anyone's saying that banks shouldn't charge overdraft fees, just that the fees should be reasonable and not punitive.  

x with camoscato

But the operative word here is UNAUTHORISED. It is so easy to extend your limit. Usually.
It is irrevelent whether the charges are high or not. It's fair. To them. It was fair. To us  when we signed the agreement. They explained or at least provided the T&C's. How can we go and complain afterwards? It is their business and one does not have to do business with them. Do they?

What happens if you write a check in the states and have no funds? It bounces and I recall it costing me a bomb when I did that. I think is actually a crime - writing a check without funds to cover it.

At least here you have the AUTHORISED Overdraft and then there is the UNAUTHORISED.
Either way one's cheque doesn't bounce.

As I stated earlier, as consumers here we have the choice. Don't go overdrawn, don't do business with that bank and or write your MP.

Yeah, but there's no choice but to accept whatever terms and conditions the bank sets out.  No one offers an account with no overdraft fees, or even with reasonable fees, so there's no option to shop around or to choose not to open an account because the potential fees are too high.  People aren't overdrawing because of ignorance of the T&C, but because of oversights or errors, and often not their own.  I don't think anyone's saying that banks shouldn't charge overdraft fees, just that the fees should be reasonable and not punitive.  

x with camoscato

Unauthorised we are talking about. I dare say most people that go O/D unauthorised is due to them sailing too close to the wind.