Reclaiming Unfair Bank Charges!

[Alan_Thomas]

Apologies if this topic has been posted before; I did a quick scan but couldnt see any such post :)

I was interested to read a recent article that appeared in the Money section of the Sunday Telegraph (9th April 2006), and wondered whether anyone else had read it or had any thoughts on it.

Article states that the OFT has ruled that all credit card,bank overdraft, store card and mortgage penalties that exceeded £12 can be claimed back, and that this can be retroactively applied to any such payment going back 6 years.

Which?, the consumer campaign group is urging the public to fight back against unfair charges, and includes a website which has draft letters to help individuals mount their own court campaign, and instructions on how to apply for a list of all charges applied in the past 6 years under the Data Protection Act (for a £10 fee).

This is definitely something I will be following up on.. anyone else have any comments or thoughts about this?

[Astaroth]

This is a fairly old topic - there is a draft letter of complaint on the money expert website

[YOUR NAME]
[YOUR ADDRESS]
[DATE]
[BANK’S NAME]

[BANK’S HEAD OFFICE ADDRESS]



Dear Sir/Madam

Penalty & unfair charges – request for refund for [YOUR NAME, SORT CODE, and ACCOUNT NUMBER]

[INSERT DETAILS of how charges were applied i.e. how much was charged, how much over agreed overdraft or credit limit and how long did you exceed limit for etc.,]

I am of the view that your charges represent a penalty and are therefore irrecoverable at common law. In the Scottish case of Castaneda and Others v. Clydebank Engineering and Shipbuilding Co., Ltd. (1904) 12 SLT 498 the House of Lords held that a contractual party can only recover damages for actual or liquidated losses incurred from a breach of contract. This is also the position in English law: Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79. Your charges do not reflect any actual or real loss, instead they appear to represent a lucrative profit-making scheme.

On a separate note, your charges appear to represent an unfair term of contract which is contrary to the Unfair Terms in Consumer Contracts Regulations 1999 (SI. 1999/2083). My account falls within the ambit of Regulation 5 of the Unfair Terms in Consumer Contracts Regulations 1999 as I am a consumer. Your charges constitute an unfair penalty under reference to paragraph 1(e) of schedule 2 of the said regulations:

‘Indicative and non-exhaustive list of terms which may be regarded as unfair - 1. Terms which have the object of effect of - (e) requiring any consumer who fails his obligation to pay a disproportionately high sum in compensation’.

0n 26 July 2005 the OFT stated that 'a charge is likely to be disproportionately high if it is more than a court would be likely to award if the lender sued the cardholder for breach of contract'. Because your charges include a lucrative profit margin, in addition to actual loss, they are irrecoverable as an unfair term in contract.

I believe that your charges require me to pay a disproportionately high sum in compensation for being overdrawn without mutual agreement.

Please refund these charges to my account within the next 7 days, or I will commence court proceedings without any further notice.

Yours faithfully

[SIGNATURE]

I think the letter is OTT but have seen many people say it works

[amcphillips]

Personally I think that this is completely wrong. At the end of the day if you don't want to pay the charges then don't be late with your payments or go overdrawn etc. As for being unfair, it's the idiots who sign the agreements without reading them that are to blame. All IMO of course.

[amcphillips]

Oh, and all this will do is cause all credit suppliers to increase their APR slightly so you'll probably end up worse off!

[davenny]

I'm new to this forum but really liking it because I live in the US and it nice to see what everyone else is doing around the world.

I use to work for a major bank, in the fortune 10, and the banks in the US make around 80-90% of their revenue from fee and I work on the system for which would generate those fees. I wish a law like this would be enacted in the US, but it probably never will.

Also, another note to think about, the bank I worked most profitable product was the zero (0) balance checking account.

Erik
http://www.usspin.com
SPiN - Super Powerful Networking has decided to Open Source its system; it is complete free to anyone who wants to start their own mastermind group. (Manuals, Materials, Website, Web-links etc.)

[Astaroth]

I work for a multi-national bank - depending on how much you break the Group down determins the actual percentage but certainly in the UK fees and general unsecured lending makes a tiny amount of our profits compared to commercial financing, property investments etc.

As to the OP, I have to agree that I think it is wrong that people can protest against fees which whilst are clearly "profiteering" are not rediculous - there may be a stronger arguement against fees for people with exceptionally poor ratings having to get specialist credit with 40% APR etc. Dont want to do the time, dont do the crime