Doug Millington-Smith (![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png)
magicaddict) wrote2009-11-25 10:54 pm
magicaddict) wrote2009-11-25 10:54 pm
Today There Was A Landmark Ruling By The Supreme Court...
...and it affects me, as a member of the industry concerned, as well as a great deal of other people, from an altogether different side.
Today, the court ruled that the Office of Fair Trading could not use the cost to the consumer as reason to investigate the schedules of charges levied by a conglomerate of banks (and one building society - mine) on accounts breaking their terms and conditions of use. Essentially, they said that bank charges were both legal and not unfair, as they are detailed in the T&C of current accounts that should be read before people sign up to have them. The court has also ruled that there is no right of appeal to this case.
The fallout of this is massive, and has caused backlash from consumer groups countrywide, many of whom will undoubtedly be pushing the OFT to consider other avenues of enquiry, which it has already said it is looking at doing.
In honour of the wave of negativity that will doubtless keep people shouting at me for personally stealing their money for months to come, I present a stand against the stand against bank charges, how I think they are both fair and reasonable, and how they can be legally and reasonably be avoided by anyone with a genuine reason why they shouldn't be penalised.
The first thing I will say is that I can only go on what my company does, and while I know for a fact that other institutions have very similar criteria in place, I cannot comment on the minutae of their T&C. That said, what holds true for one will very likely hold true for another.
There are people who have decided that it is not their responsibility to look after their financial affairs. They should be able to do whatever they want with their account, and when they break the rules, it shouldn't matter. It's not their fault that they can't look after their own money, it's the fault of their institution who didn't keep them sufficiently informed. They will not seek guidance on financial management, nor will they accept any form of responsibility for allowing their finances to get into such dire straits. These people, I have no sympathy for - there is so much help available from so many sides, and you've chosen to take none of it. Grow a pair and admit you've got a problem.
There are others of people who heard about the test case and decided that it would be a free ride to wilfully misuse their account (I'll be using that phrase a lot), and get off scott free when their institution came knocking and demanded they pay up. They stated they believed the charges were illegal, and got the value of their charge suspended pending the outcome of the case. These people now owe a lot of money, in same cases many hundreds or thousands of pounds, because they were certain the ruling would come down on their side. These people, I also have no sympathy for - you gambled and you lost. Screw you too.
Similarly, there are people who are, through no fault of their own, struggling. Either they have difficulty budgetting and wish they could, or they've had a personal issue which has kept their mind off their money for a while, or they're barely making enough money to survive day to day and sometimes there's a mistake, or they're ill, or they thought they were okay and misread something. These people, read on - you may not be aware of precisely how many means you have of getting your charges refunded.
My company levies the following charges:
Unauthorised Overdraft: £20 flat rate per month plus 19.9% APR on the debt, calculated daily.
Bounced Cheque: £30 flat rate
Bounced Standing Order: £30 flat rate
Bounced Direct Debit: £30 flat rate
These are steep, but are the only way people can be discouraged from flaunting the rules of the account - if the penalties for misuse weren't harsh, even more people than do now would be ignoring the account's T&C, safe in the knowledge that nothing will happen to them because the institution is powerless to do anything they care about. They levy these charges on two types of people - those who genuinely misuse their account by breaking the rules of conduct and thereby deserving it, and those who don't and don't bother trying to get them cancelled because they assume all insitutions are evil money-grabbing tossposts, right down to the cashier in front of them. All other people who get charged tend to get them refunded, for the following reasons that anyone with just cause can use.
If you haven't incurred a charge before, then you are more or less home free. Institutions are willing to refund charges to just about anyone on a 1st Time Only basis as long as you agree not to make the same error again. If you thought there was enough money in the account but miscalculated, were expecting something to clear faster than it did, or thought a payment was due to leave later than it did, there is every chance that they will cancel it for you on the idea that everyone is allowed to make one mistake. Charges are levied on people who wilfully misuse their account - not those who thought they were doing okay and made one cock up.
If something serious has happened to you which has taken your mind off your money, there may be Exceptional Circumstances that give grounds for a refund. If you have recently been a victim of crime, made redundant, hospitalised, bereaved, injured or had to leave the country on short notice, it is reasonable to believe that had these circumstances not intervened, you would have been managing your money and would have not allowed the account to break the rules, so often an institution will refund charges incurred while under such influence. Charges are levied on people who wilfully misuse their account - not those going through a genuine personal nightmare.
If there was Institutional Error, such as the institution provably not having cancelled a Standing Order or Direct Debit having been asked, or taking a payment from an account when agreement had been reached not to, later causing the account to break the rules and incur charges, you are obviously not at fault and can request that the charge is refunded. Similarly, if there was Third Party Error, such as a company trying to take a Direct Debit when they had agreed not to which took your account overdrawn, while the charge cannot be refunded, your institution will often back you up in asserting that the third party is liable for your charges. This happens more often than people think - I am all too happy to produce a statement and highlight it for someone so they can go and wave it under the nose of the people responsible and demand they pay. Charges are levied on people who wilfully misuse their account - not those getting stiffed by clerical errors.
Finally, if you can reasonably demonstrate that the charges will cause you Financial Hardship as a result of being paid, there is a case for having them refunded. If you are in financial difficulty and something goes wrong one month leading to spiraling charges, and you can show that the money that pays them was supposed to go on your food or rent, I promise you that we're not all bastards and do indeed have hearts. This is not supposed to protect people who spent all their money on booze, drugs, clothes or other consumer goods and only have a small amount left for essentials, but rather those who are living hand to mouth and are genuinely struggling to make ends meet. You might need to go for an interview with the manager as each case is subjective, but if you are in real trouble and will either go hungry or be evicted as a result of your lack of money, the manager is often given discretionary powers to help you. Charges are levied on people who wilfully misuse their account - not those who are doing their level best but drop a single clanger.
There are a myriad of eventualities that are covered by the rules allowing us to refund your charges, but we can only help you if you bite the bullet, come in and talk to us. I was raised by two very financially aware parents who took a small budget and stretched it brilliantly, under advice, supervision and help from their bank. They stayed in contact with them, didn't hide anything, and with the bank's help, got through it without falling foul of the rules. You too can benefit from this practice - it is in the interests of your financial institution for you to be solvent and stable, as you are likely to buy more products off them than if you are being charged up the ass. If you think you're having trouble, for crying out loud go and talk to them. The people who sit down with you to talk about it are not the bonus hungry investment traders from the headlines, they're people like me - people who may well be earning less than you, but are still happy to try to help you if only you will be honest about your situation.
I've never had someone come in and ask to sit down with someone to discuss their financial situation, but if they did they'd be sat down with someone who can offer genuine help and advice in five minutes - if there wasn't a Customer Account Manager available, I'd do it myself - and they'd likely come out of it in a vastly better situation than they went in. Try it some time - surprising though it may be, the staff at the local branch of your financial institution might know the odd factoid about how to manage money.
Today, the court ruled that the Office of Fair Trading could not use the cost to the consumer as reason to investigate the schedules of charges levied by a conglomerate of banks (and one building society - mine) on accounts breaking their terms and conditions of use. Essentially, they said that bank charges were both legal and not unfair, as they are detailed in the T&C of current accounts that should be read before people sign up to have them. The court has also ruled that there is no right of appeal to this case.
The fallout of this is massive, and has caused backlash from consumer groups countrywide, many of whom will undoubtedly be pushing the OFT to consider other avenues of enquiry, which it has already said it is looking at doing.
In honour of the wave of negativity that will doubtless keep people shouting at me for personally stealing their money for months to come, I present a stand against the stand against bank charges, how I think they are both fair and reasonable, and how they can be legally and reasonably be avoided by anyone with a genuine reason why they shouldn't be penalised.
The first thing I will say is that I can only go on what my company does, and while I know for a fact that other institutions have very similar criteria in place, I cannot comment on the minutae of their T&C. That said, what holds true for one will very likely hold true for another.
There are people who have decided that it is not their responsibility to look after their financial affairs. They should be able to do whatever they want with their account, and when they break the rules, it shouldn't matter. It's not their fault that they can't look after their own money, it's the fault of their institution who didn't keep them sufficiently informed. They will not seek guidance on financial management, nor will they accept any form of responsibility for allowing their finances to get into such dire straits. These people, I have no sympathy for - there is so much help available from so many sides, and you've chosen to take none of it. Grow a pair and admit you've got a problem.
There are others of people who heard about the test case and decided that it would be a free ride to wilfully misuse their account (I'll be using that phrase a lot), and get off scott free when their institution came knocking and demanded they pay up. They stated they believed the charges were illegal, and got the value of their charge suspended pending the outcome of the case. These people now owe a lot of money, in same cases many hundreds or thousands of pounds, because they were certain the ruling would come down on their side. These people, I also have no sympathy for - you gambled and you lost. Screw you too.
Similarly, there are people who are, through no fault of their own, struggling. Either they have difficulty budgetting and wish they could, or they've had a personal issue which has kept their mind off their money for a while, or they're barely making enough money to survive day to day and sometimes there's a mistake, or they're ill, or they thought they were okay and misread something. These people, read on - you may not be aware of precisely how many means you have of getting your charges refunded.
My company levies the following charges:
Unauthorised Overdraft: £20 flat rate per month plus 19.9% APR on the debt, calculated daily.
Bounced Cheque: £30 flat rate
Bounced Standing Order: £30 flat rate
Bounced Direct Debit: £30 flat rate
These are steep, but are the only way people can be discouraged from flaunting the rules of the account - if the penalties for misuse weren't harsh, even more people than do now would be ignoring the account's T&C, safe in the knowledge that nothing will happen to them because the institution is powerless to do anything they care about. They levy these charges on two types of people - those who genuinely misuse their account by breaking the rules of conduct and thereby deserving it, and those who don't and don't bother trying to get them cancelled because they assume all insitutions are evil money-grabbing tossposts, right down to the cashier in front of them. All other people who get charged tend to get them refunded, for the following reasons that anyone with just cause can use.
If you haven't incurred a charge before, then you are more or less home free. Institutions are willing to refund charges to just about anyone on a 1st Time Only basis as long as you agree not to make the same error again. If you thought there was enough money in the account but miscalculated, were expecting something to clear faster than it did, or thought a payment was due to leave later than it did, there is every chance that they will cancel it for you on the idea that everyone is allowed to make one mistake. Charges are levied on people who wilfully misuse their account - not those who thought they were doing okay and made one cock up.
If something serious has happened to you which has taken your mind off your money, there may be Exceptional Circumstances that give grounds for a refund. If you have recently been a victim of crime, made redundant, hospitalised, bereaved, injured or had to leave the country on short notice, it is reasonable to believe that had these circumstances not intervened, you would have been managing your money and would have not allowed the account to break the rules, so often an institution will refund charges incurred while under such influence. Charges are levied on people who wilfully misuse their account - not those going through a genuine personal nightmare.
If there was Institutional Error, such as the institution provably not having cancelled a Standing Order or Direct Debit having been asked, or taking a payment from an account when agreement had been reached not to, later causing the account to break the rules and incur charges, you are obviously not at fault and can request that the charge is refunded. Similarly, if there was Third Party Error, such as a company trying to take a Direct Debit when they had agreed not to which took your account overdrawn, while the charge cannot be refunded, your institution will often back you up in asserting that the third party is liable for your charges. This happens more often than people think - I am all too happy to produce a statement and highlight it for someone so they can go and wave it under the nose of the people responsible and demand they pay. Charges are levied on people who wilfully misuse their account - not those getting stiffed by clerical errors.
Finally, if you can reasonably demonstrate that the charges will cause you Financial Hardship as a result of being paid, there is a case for having them refunded. If you are in financial difficulty and something goes wrong one month leading to spiraling charges, and you can show that the money that pays them was supposed to go on your food or rent, I promise you that we're not all bastards and do indeed have hearts. This is not supposed to protect people who spent all their money on booze, drugs, clothes or other consumer goods and only have a small amount left for essentials, but rather those who are living hand to mouth and are genuinely struggling to make ends meet. You might need to go for an interview with the manager as each case is subjective, but if you are in real trouble and will either go hungry or be evicted as a result of your lack of money, the manager is often given discretionary powers to help you. Charges are levied on people who wilfully misuse their account - not those who are doing their level best but drop a single clanger.
There are a myriad of eventualities that are covered by the rules allowing us to refund your charges, but we can only help you if you bite the bullet, come in and talk to us. I was raised by two very financially aware parents who took a small budget and stretched it brilliantly, under advice, supervision and help from their bank. They stayed in contact with them, didn't hide anything, and with the bank's help, got through it without falling foul of the rules. You too can benefit from this practice - it is in the interests of your financial institution for you to be solvent and stable, as you are likely to buy more products off them than if you are being charged up the ass. If you think you're having trouble, for crying out loud go and talk to them. The people who sit down with you to talk about it are not the bonus hungry investment traders from the headlines, they're people like me - people who may well be earning less than you, but are still happy to try to help you if only you will be honest about your situation.
I've never had someone come in and ask to sit down with someone to discuss their financial situation, but if they did they'd be sat down with someone who can offer genuine help and advice in five minutes - if there wasn't a Customer Account Manager available, I'd do it myself - and they'd likely come out of it in a vastly better situation than they went in. Try it some time - surprising though it may be, the staff at the local branch of your financial institution might know the odd factoid about how to manage money.
no subject
I think this ruling is a ruling in favour of some very rich organisations against some very poor people.
no subject
I can pretty much guarantee that if you made the same request in the same situation in my branch today, you'd have got your charge cancelled.
Yours was an example of an institution not even trying to help its customer, and it deserves the bad press it got for doing so, but things have improved on our side of things as well since. It is not something I see when I go in to work on a daily basis - I see people who don't want anyone to get stung and will do their best to find a way out of it for them.
no subject
However, I did do what they charged me for. I was rubbish with my money, either through a screw-up or through depression leaving me incapable of managing my account and have, on a few occasions, ended up a lot overdrawn on my overdraft.
Whilst I'm butthurt at the loss of the money, I can't exactly say that it was unfair.
(That said, I'll change to Nationwide as soon as I get my overdraft down to a more reasonable level, if the charges are how you've described them. I'm not planning on incurring any more, but considering my last fuckup cost me £150, it's worth looking at)
PJW
no subject
Unfortunately, while I do urge you to apply, my company curently has what I believe to be the most draconian credit scoring in the country at the moment, due to its cautious lending policy. We turn down rather more debit card applications than we accept, only able to offer cash cards instead. It's worth a try, though. I can get you a pack whenever you want to fill in the form.
no subject