Bank Robbery?

[ideasguy]

In the newspapers on Nov 26th we read that the Supreme Court threw out the test case by the OFT (Office of Fair Trading) against unauthorised overdraft fees.

Here I quote from a few of the Newspapers:
In The Sun (a popular national newspaper in the UK) heres quotes from the column The Sun Says

At stake was the £20billion banks have raked in from current account holders since 2001
People hammered with £39 charges for bounced cheques and £35 fees for a penny overdrawn will be bitterly disappointed that they will not be able to claim anything back

and

If it wasn't for £180 billion in taxpayer support, bank bosses would be sleeping in cardboard boxes under the arches

and

Before the crunch, swaggering bankers merrily fleeced current account customers.
Then came catastrophe - and out came the begging bowl

and

There are signs bankers are up to their tricks again of risky deals and big bonuses

From The Belfast Telegraph (a leading newspaper in N Ireland - my previous employer)

The Supreme Court threw out the OFT's test case against unauthorised overdraft fees but also pointed out that a successful challenge might be possible under a different part of the law.

and

When yesterdays ruling was handed down by the Supreme Court it appeared to be a huge blow to the long-running campaign for refunds of penalty fees.
Five law lords, led by Lord Phillips, unanimously dismissed the OFT's case that fees were additional to a main current account service, rendering them capable of being assessed for fairness under the Unfair Terms in Consumer Regulations 1999.
Instead, the judges ruled the fees were part of the "core" current account service and thus not subject to a value for money test

and in their analysis:

While the court ruling is a blow to the hundreds of thousands of people who had claims frozen pending the outcome of the case, millions of other bank customers can breathe a sign of relief.
Had the banks lost their case, they would have been facing multi-billion pounds payouts - that money would have to be found from somewhere and the most likely option was the introductions of charges to standard accounts.
Yesterdays ruling means banks have no excuse for introducing other charges

Would any members like to comment on that?

[Palustris]

Having never had an overdraft either authorised or otherwise, it seems to me unfair that people should live beyond their means and then expect the financially careful among us to pay for their lack of foresight. And, like it or not, if the Banks had lost this case then they would have immediately begun steps to remove free banking from ALL their customers.
The answer is simple, live within your means.

[ideasguy]

I'm afraid Ive fallen foul of Bank fees for going into the red by a few pence myself Eric, and I'm sure many others in my position will have had similar experiences - when paying a mortgage, raising a family, maintaining a car, paying utility bills etc etc.
It was my prime reason for creating Bank Genie a couple of decades ago.
For some reason,the washing machine or the old banger of a car (everyone has the non-rusty versions nowadays) would invariably break down at the most inopportune time.

I'm afraid I always reacted with fury when a letter arrived in the post to say I had overdrawn and a cheque had bounced.
The fees were outrageous! They would have paid another bill!

In the hard times I recall checking on one occasion and found that the cheque had been dishonoured for only a few pence, due to the previous months interest levied by the Bank had been higher than expected. The charge was made just before (or on the same day) as the cheque was presented, and their excess cheque had caused my problem.
There was also a charge for the letter (I couldn't dip into their account to charge them for my reply) and the embarassment of apologising to the payee.

In more recent years they tell you how much interest they will charge next month, so planning is easier.

However, from the analysis above and your comments, its clear the Banks will always win.

that money would have to be found from somewhere and the most likely option was the introductions of charges to standard accounts.

[Palustris]

We just went without many of the things which other folks too for granted. No car, no holidays, no external entertainment, no TV for a long time. Can remember working out very carefully when we could use the Cheque guarantee card  to shop, when the money ran out before the monthly pay arrived. Used the card on Friday evening, after the Banks had shut and it did not go through until Monday morning. Free school meals for the kids, free milk, free Dental treatment, Family income supplement. Teachers were really well paid in those days. BUT we still did not borrow any money accidently or otherwise.

[ideasguy]

Theres a feature in Bank Genie which seems to confuse some people Eric, and you've raised a comment which explains its "raison d'etre"

Used the card on Friday evening, after the Banks had shut and it did not go through until Monday morning.

The software allows the user to enter 2 dates for each item a) Transaction date b) Bank Date
In the above case, Transaction date Fri, Bank Date Monday (or a couple of days later - in the old days)

Now you weren't supposed to do this next trick "in the old days", but who in a cash strapped situation didn't?
Pay day Fri coming. Need to pay (e.g.) phone bill ASAP (otherwise there are "consequences")
It took a few days for cheque to clear, so write cheque and pay bill a "calculated" number of days in advance.
Hope you get the calculations correct! If not, a nice letter from your friendly Bank Manager.
Actually, in those days you could get to TALK to a Bank manager on the telephone!
Bank Genie helped with those calculations.
Nowadays, payments happen a bit quicker!

[Eric Hardy]

BUT we still did not borrow any money accidently or otherwise.

Well I am in complete agreement with the other Eric. My parents and Anthea's parents never owed anything to anyone. Neither of our parents were very well off but we both were taught to live within our means. We did have a mortgage of course, £2,200  which we paid off as soon as we were able, and certainly not increasing the mortgage to get our hands on ready cash! No what does gall me about modern banking methods is that even with this electronic banking it takes a few days for my payment to reach another account. I could see why a cheque needs time to clear but to slow down the payment so they have use of the money for a while seems iniquitous 
There now, there's my two pennyworth. !!!!

[ideasguy]

My dad built and paid for the house and garden I now own in cash in the mid 60's. It also cost around £2000 Eric.
He scraped and saved all his lfe to raise than money while raising a family. We lived a couple of miles out of town then and when we bought this property and built this house on the edge of town it was not his chosen location. He was far happier with those few acres and his beloved hens.

Nowadays its a mortgage. Thats OK until forced redundancy hits. I feel really sorry for anyone who has had their house repossessed due to the crunch.

RE:

I could see why a cheque needs time to clear but to slow down the payment so they have use of the money for a while seems iniquitous

Indeed. But then as in the case of Father Ted, its only resting in their account