Are Banks Exploiting Customers Through Overdraft Charges?

[chroot]

You certainly can, and probably will, lose "your way." At least it'll be your way, though, right? Good luck.

- Warren

 

[Moonbear]

At least in the US, you'd have to make every effort first to mitigate your damages if you expected to collect on any unfair charges. In other words, you might be able to get back a part of what they charged you if you had no way to know you overdrafted and several charges piled up before you were made aware of the problem...such as when a deposit doesn't clear in time to cover a withdrawal made a day or two later. But, in a case like that, you usually can just talk to the bank and they'll reimburse that money anyway. If you continue to let the overdrafts and fees accumulate once you know you have a problem, you're not going to get anything for your own lack of sense in not at least closing the account to put an end to the fees. You also won't get the first overdraft fee refunded...that's your own fault for overdrafting, but you might get some intermediate fees between that one and when you got notice from the bank of the situation (like when your monthly statement arrives).

And, of course, if you expect your bank to be reasonable and refund your overdraft fees, you need to be reasonable and give them some form of assurance you won't do it again. They're in business too, and if you cost them money rather than make them money, they're not going to do anything for you and would prefer you walked out and took your business elsewhere.

Overdrafting 3 times in 8 years is a LOT. Most people never overdraft in their entire life. And, if you're maintaining such a low balance that overdraft fees can accumulate rather than quickly be covered to stop them while trying to recover the fees, why would a bank want your business at all? You might as well keep your cash under your mattress since you can't possibly even be earning interest on such a low balance to make it worthwhile having a bank account for anything other than cashing checks. You should strive harder to keep some savings so you have a buffer for such things. Even when I was a poor student, I'd scrimp and save to always maintain at least enough to cover one extra month of expenses...this provides a small safety net if you find you can't work for an extended illness or you lose a job and need to look for a new one, and was also available to cover an emergency expense...fixing the car, a visit to the doctor for an illness, etc...and then immediately scrimp and save to replenish that buffer.

 

[Schrodinger's Dog]

I didn't once I was aware I was straight in and asking them to stop the fees because I couldn't pay. They said there was nothing they could do.

I seriously think you don't understand the position customers are in atm, they will simply not pay if it is unfair, and they will take them to court and have charges removed because they are illegal. It's a simple case, of, no longer being bound by charges because sooner rather than later they won't exist in anything like the way they do now. Thus the large amount of businesses raking in cash on taking the banks to court.

You certainly can, and probably will, lose "your way." At least it'll be your way, though, right? Good luck.

- Warren

I can't lose. I'm not getting your point here?

 

[chroot]

This is hilarious, Moonie. I have said every single thing you have said already -- every single thing! I wish you better luck with him, though!

- Warren

 

[Moonbear]

This is hilarious, Moonie. I have said every single thing you have said already -- every single thing! I wish you better luck with him, though!

- Warren

Can you tell I didn't bother reading all of it before replying?

SD, it really looks like you just want to gripe and moan, but not do anything to actually fix the problem you have. Fine, spend your life in debt if you want to live that way, just don't expect anyone to bail you out.

 

[Schrodinger's Dog]

This is hilarious, Moonie. I have said every single thing you have said already -- every single thing! I wish you better luck with him, though!

- Warren

and yet if I take your advice I pay £300 pounds if I follow the legal syatem I pay nothing? And not only that there is no come back.

Yeah I'm thinking this is just a difference because you don't understand what is going on in this country atm.

And I assume you don't agree with the law as it stands atm. Well good for you, but sorry I'm not paying, and I won't have to, and I will have no comeback. If that hurts your sense of justice, so be it.

 

[cristo]

SD, you keep mentioning about "taking the bank to court." Now, I know that you're not doing this, but that you're awaiting the result of the test case. Have you any idea what will happen, though, if the courts rule in the banks favour? That's right.. everyone owing bank fees will be forced to pay them. That is, you will have to pay everything you owe which, if you carry on taking this cavalier attitude, will be thousands of pounds by the time the court case is over. So what would you rather do? Pay the small amount of money you owe now, or take the chance of having to pay a hell of a lot more in a few years time? I know what I would do.

Also, before you say it, I know that the banks will not waive the fees now on the ground of them being "illegal" since they are awaiting the result of the court case. You may have had a chance if you argued, politely, that you made a mistake, but if you approached them with you attitude you have in this thread, it's hardly surprising they refused!

 

[Schrodinger's Dog]

Can you tell I didn't bother reading all of it before replying?

SD, it really looks like you just want to gripe and moan, but not do anything to actually fix the problem you have. Fine, spend your life in debt if you want to live that way, just don't expect anyone to bail you out.

I wont? I'll live my life free of stupid idiots who think they can abuse their customers. And all these charges will cease to exist soon anyway in any form like they do now?

I'm not getting how I don't win here? I get to pay nothing. I get not to have to pay ridiculous charges that force me into debt, how is this not a win/win thing?

The banks are soon to be forced to abide by terms that are fair under the law? Who gives a damn if in the mean time, I don't have to pay money I don't have? I mean seriously? Would you? Given the legal system devolves you of liability? Why would you not take the legal route? Are you saying I should just grin and bear it?

SD, you keep mentioning about "taking the bank to court." Now, I know that you're not doing this, but that you're awaiting the result of the test case. Have you any idea what will happen, though, if the courts rule in the banks favour? That's right.. everyone owing bank fees will be forced to pay them. That is, you will have to pay everything you owe which, if you carry on taking this cavalier attitude, will be thousands of pounds by the time the court case is over. So what would you rather do? Pay the small amount of money you owe now, or take the chance of having to pay a hell of a lot more in a few years time? I know what I would do.

Also, before you say it, I know that the banks will not waive the fees now on the ground of them being "illegal" since they are awaiting the result of the court case. You may have had a chance if you argued, politely, that you made a mistake, but if you approached them with you attitude you have in this thread, it's hardly surprising they refused!

Yes as I said goes before the European courts and they've already made their position quite clear. The banks can't win this, all they can do is string it out. Of course this means they make more money than just accepting the inevitable. I can simply say I will pay when the European courts have made their decision. And the decision is not just unlikely to be in their favour, it's already a foregone conclusion.

 

[Moonbear]

I don't even see why bank fees would be illegal? Are they not spelled out when you signed on the dotted line to open the account? Did you not keep the account open if they changed them? And, even if you have a legitimate case that there were fees charged incorrectly that you should be reimbursed, doing nothing to stop the bleeding until then only worsens matters.

Why should banks give you an interest free loan? That's what an overdraft with no fees is, and isn't what banks are in the business of doing. Really, as long as you keep running a negative balance, you're more or less taking out loans without prior approval. Of course a bank should be able to charge you interest (in the form of a fee) for making this loan. I don't see why they couldn't take YOU to court for non-repayment, or put a lien on your property or garnish wages to get their money back. Banks aren't charities, they're businesses.

 

[Schrodinger's Dog]

I don't even see why bank fees would be illegal? Are they not spelled out when you signed on the dotted line to open the account? Did you not keep the account open if they changed them? And, even if you have a legitimate case that there were fees charged incorrectly that you should be reimbursed, doing nothing to stop the bleeding until then only worsens matters.

Why should banks give you an interest free loan? That's what an overdraft with no fees is, and isn't what banks are in the business of doing. Really, as long as you keep running a negative balance, you're more or less taking out loans without prior approval. Of course a bank should be able to charge you interest (in the form of a fee) for making this loan. I don't see why they couldn't take YOU to court for non-repayment, or put a lien on your property or garnish wages to get their money back. Banks aren't charities, they're businesses.

They're illegal because they do not reflect the cost incurred by banks. Thus when I get charged £60 for going overdrawn, like most people, we feel pissed off.

I can forgive you misunderstanding how this has built to such an extent that banks are now being taken to court all the time. I'm not sure I understand where cristo is coming from since he knows all this. If he thinks it's fair I can only assume he thinks the legal proceedings are unfair. And that the government saying such charges are illegal are not relevant. They are illegal, but until the case goes through, they are not enforceable, except in legal proceedings outside of the common law.

 

[cristo]

Personally, I don't see how something that is written into a contract can be illegal, when the customer willingly signs the contract, and agrees to the terms.

I don't really care how much the bank fees are, since I am never going to let myself get into a situation that you are in now. As I've said before, I would much rather the irresponsible bank users picked up the charges for their account rather than the costs being shared out amongst everyone else in the form of monthly fees, fees for direct debits, or fees for cashing cheques etc.

You do realize that, whilst you may "win" in that you won't pay your £300 fees, the banks winning this court case will not be good for the country. Do you seriously believe that if the banks are forced to cut such fees then they won't look to pick them up elsewhere? No.. of course they will.

 

[Schrodinger's Dog]

Personally, I don't see how something that is written into a contract can be illegal, when the customer willingly signs the contract, and agrees to the terms.

I don't really care how much the bank fees are, since I am never going to let myself get into a situation that you are in now. As I've said before, I would much rather the irresponsible bank users picked up the charges for their account rather than the costs being shared out amongst everyone else in the form of monthly fees, fees for direct debits, or fees for cashing cheques etc.

You do realize that, whilst you may "win" in that you won't pay your £300 fees, the banks winning this court case will not be good for the country. Do you seriously believe that if the banks are forced to cut such fees then they won't look to pick them up elsewhere? No.. of course they will.

Er if they lose I'm sure they'll be forced to simply remove them or make them in line with the common EU countries rates, and not make them up elsewhere? If it's bad for the country, then obviously European banks are operating at a loss they simply must make up by other means? Do you see what I'm saying, this is no different from charging people to withdraw from other banks machines, it's unnecessary, technology meant they had no need to. And the banks didn't increase their charges or try to make it up, when they were forced to abide by that.

Now whilst I respect your opinion, it is not a commonly shared one, and it is not going to carry much weight in the courts. Particularly when the government have already declared them illegal in all but practice. It's kind of like getting on board with the consensus, I feel good about it. Ok I have selfish motivations, but well I also hope other people won't be put through the wringer for this. So it's not completely selfish. I felt this way long before I ever incurred my first x pounds for x pounds charges.

 

[Moonbear]

Personally, I don't see how something that is written into a contract can be illegal, when the customer willingly signs the contract, and agrees to the terms.

I don't really care how much the bank fees are, since I am never going to let myself get into a situation that you are in now. As I've said before, I would much rather the irresponsible bank users picked up the charges for their account rather than the costs being shared out amongst everyone else in the form of monthly fees, fees for direct debits, or fees for cashing cheques etc.

You do realize that, whilst you may "win" in that you won't pay your £300 fees, the banks winning this court case will not be good for the country. Do you seriously believe that if the banks are forced to cut such fees then they won't look to pick them up elsewhere? No.. of course they will.

Exactly! They don't just have to recoup their costs...you agreed when you opened the account to the fees you'd pay if you got overdrawn. Even if you go a teensy bit into the red, you are a high risk customer. They should not have to assume that risk while you assume none for your own irresponsibility, and it certainly shouldn't be put upon the shoulders of all the other customers who are responsible with their funds. You cost them more money than you help them earn when you become overdrawn, or even when you carry a low balance.

 

[Schrodinger's Dog]

Exactly! They don't just have to recoup their costs...you agreed when you opened the account to the fees you'd pay if you got overdrawn. Even if you go a teensy bit into the red, you are a high risk customer. They should not have to assume that risk while you assume none for your own irresponsibility, and it certainly shouldn't be put upon the shoulders of all the other customers who are responsible with their funds. You cost them more money than you help them earn when you become overdrawn, or even when you carry a low balance.

I don't think so when they charge you £60 they make way, way more than the costs they incur, that is kind of the point. If they factor in the actual cost of doing this, about 5p, and the cost of having customers go overdrawn it does not come to £60, that is why it's not going to pass muster in the courts. They will make them charge for the actual costs, not the imagined ones in imaginationland. If they can show that in future this is increasing people going overdrawn, then they can adjust their fees accordingly, if not then they're kind of stumped. The fact is the charges are never going to be £60, no matter how they want to look at it. And that is not acceptable to either the government or the courts.

 

[cristo]

Er if they lose I'm sure they'll be forced to simply remove them or make them in line with the common EU countries rates, and not make them up elsewhere? If it's bad for the country, then obviously European banks are operating at a loss they simply must make up by other means?

You should really do some research before you quote statistics. Now, the first bank I came across on the continent, was Barclays France.[1] Yes, OK, so they don't charge bank fees of £25 every time you go overdrawn (they charge €8), however they do charge for other services that are provided for free here. For example: Debit Card €44 (annual fee); Account fee €10 (per quarter, minimum)... I don't think I really need to go any further, since this proves my point!

So, I'll say it again, I'd much rather that the irresponsible account holders pick up the fees, rather than every customer having to pay a fee for their bank services.

[1] http://www.barclays.fr/file/documentsite/tarifs/tariff20070201.pdf

 

[Moonbear]

I don't think so when they charge you £60 they make way, way more than the costs they incur, that is kind of the point. If they factor in the actual cost of doing this, about 5p, and the cost of having customers go overdrawn it does not come to £60, that is why it's not going to pass muster in the courts. They will make them charge for the actual costs, not the imagined ones in imaginationland. If they can show that in future this is increasing people going overdrawn, then they can adjust their fees accordingly, if not then they're kind of stumped. The fact is the charges are never going to be £60, no matter how they want to look at it. And that is not acceptable to either the government or the courts.

They have to pay the wages of the people who work for them...and you. Every time you overdraft, you create more paperwork for them, and more employees are involved than if you didn't overdraft. Even standard loans have processing fees to take into account these costs aside from the loan itself. Banks don't run themselves. Those fees also used to be a lot less when fewer people would go into such debt...as more people start to become overdrawn, banks need to protect themselves and their good customers from those costs. They know they better collect the 60 pounds today for a small overdraft, because past experience tells them when the next overdraft is for a few hundred pounds, they're not going to be able to get blood from a stone.

Anyway, it really seems you are set on your course, and discussion isn't going anywhere. I believe we've reached an impasse, thus am going to lock the thread.