Bank charges

[ferrisbueller]

Natwest are hitting me with some rather harsh bank charges 1/ for a returned direct debit and 2/ to close the account.

I believe there is a maximum that they can charge and also that they may not be able to charge at all.

Can anyone refer me to some points of reference or offer some advice please?

Edited by ferrisbueller on Sunday 11th May 20:09

[Rach81]

www.moneysavingexpert.com

Heaps of stuff about bank charges on their forum

[Gizmo!]

I would suggest that you read the terms and conditions of the account, including any 'our charges explained' leaflets.

If you've been using the account, that is implicit acceptance of those terms.

Not that this seems to be worrying the courts at the moment, much to my irritation and that of many people who have very carefully managed their finances over the years...

[eccles]

Gizmo! said:

I would suggest that you read the terms and conditions of the account, including any 'our charges explained' leaflets.

If you've been using the account, that is implicit acceptance of those terms.

Not that this seems to be worrying the courts at the moment, much to my irritation and that of many people who have very carefully managed their finances over the years...

Not bad, just three posts in and you get a 'you've accepted the terms and conditions' post...... yup i expect there'll be several others.

[richyb]

Is it a business account? You shouldn't have to pay to close the ACC. Moneysavingexpert as mentioned has a form you can print and amend.

[mcflurry]

Returned DD due to lack of funds? That will be £30. Kerching.
That's why everyone else has free banking.

Closing an account should be free though...

[biglepton]

Gizmo! said:

I would suggest that you read the terms and conditions of the account, including any 'our charges explained' leaflets.

If you've been using the account, that is implicit acceptance of those terms.

Acceptance of those terms is deemed not to have occured, implicitly or explicitly, if those terms are considered unfair. English law only allows penalties to be charged in proportion to the cost incurred by the bank for the action for which the penalty is being charged, ie to send a letter £2 tops, not £35. If you tried to apply unfair and out of proportion penalty charges in a contract between you and another party, they would not be upheld, so why should banks be allowed to use them when you or I cannot?

[TheCarpetCleaner]

biglepton said:

Gizmo! said:

I would suggest that you read the terms and conditions of the account, including any 'our charges explained' leaflets.

If you've been using the account, that is implicit acceptance of those terms.

Acceptance of those terms is deemed not to have occured, implicitly or explicitly, if those terms are considered unfair. English law only allows penalties to be charged in proportion to the cost incurred by the bank for the action for which the penalty is being charged, ie to send a letter £2 tops, not £35. If you tried to apply unfair and out of proportion penalty charges in a contract between you and another party, they would not be upheld, so why should banks be allowed to use them when you or I cannot?

Because then it wouldnt give certain people on here the chance to belittle other people's past or current financial problems...

[siscar]

biglepton said:

Gizmo! said:

I would suggest that you read the terms and conditions of the account, including any 'our charges explained' leaflets.

If you've been using the account, that is implicit acceptance of those terms.

Acceptance of those terms is deemed not to have occured, implicitly or explicitly, if those terms are considered unfair. English law only allows penalties to be charged in proportion to the cost incurred by the bank for the action for which the penalty is being charged, ie to send a letter £2 tops, not £35. If you tried to apply unfair and out of proportion penalty charges in a contract between you and another party, they would not be upheld, so why should banks be allowed to use them when you or I cannot?

What you say may be true in law, but it is still galling to those of us who manage our finances. We are told the terms, we accept them and if we stick within them we get free banking. The trade off is that if we don't stick within the terms we pay. Now what is going to happen is that the financially incapable will force a situation where the rest of us have to pay for our banking. I and, I suspect, a large number of others prefer the status quo.

[siscar]

TheCarpetCleaner said:

Because then it wouldnt give certain people on here the chance to belittle other people's past or current financial problems...

Its not belittling other peoples problems, it's being a bit irritated that other people's problems will cause the rest of us to pay more.

[TheCarpetCleaner]

siscar said:

biglepton said:

Gizmo! said:

I would suggest that you read the terms and conditions of the account, including any 'our charges explained' leaflets.

If you've been using the account, that is implicit acceptance of those terms.

Acceptance of those terms is deemed not to have occured, implicitly or explicitly, if those terms are considered unfair. English law only allows penalties to be charged in proportion to the cost incurred by the bank for the action for which the penalty is being charged, ie to send a letter £2 tops, not £35. If you tried to apply unfair and out of proportion penalty charges in a contract between you and another party, they would not be upheld, so why should banks be allowed to use them when you or I cannot?

What you say may be true in law, but it is still galling to those of us who manage our finances. We are told the terms, we accept them and if we stick within them we get free banking. The trade off is that if we don't stick within the terms we pay. Now what is going to happen is that the financially incapable will force a situation where the rest of us have to pay for our banking. I and, I suspect, a large number of others prefer the status quo.

If the banks were running their business purely on huge penalty charges, surely they were not running their business properly?

I have never been overdrawn and have never suffered the charges, however I can still see where the problem is.

Its even worse than the credit crunch bks IMO - if they cannot survive without running free bank accounts from penalty charges, then they were trading on free money in the first place.

[siscar]

TheCarpetCleaner said:

If the banks were running their business purely on huge penalty charges, surely they were not running their business properly?

I have never been overdrawn and have never suffered the charges, however I can still see where the problem is.

Its even worse than the credit crunch bks IMO - if they cannot survive without running free bank accounts from penalty charges, then they were trading on free money in the first place.

Eh? They aren't running purely on penalty charges but it is a factor. You run a business I think - if you were prevented from charging for some aspect of what you do you would either stop doing it or would charge more for something else. That's what will happen here, if they lose their income from penalty charges they will make up for it elsewhere, and that will be the end of free banking. After all free banking is pretty much a UK thing, go to most other countries and you will pay for your banking.

[biglepton]

siscar said:

biglepton said:

Gizmo! said:

I would suggest that you read the terms and conditions of the account, including any 'our charges explained' leaflets.

If you've been using the account, that is implicit acceptance of those terms.

Acceptance of those terms is deemed not to have occured, implicitly or explicitly, if those terms are considered unfair. English law only allows penalties to be charged in proportion to the cost incurred by the bank for the action for which the penalty is being charged, ie to send a letter £2 tops, not £35. If you tried to apply unfair and out of proportion penalty charges in a contract between you and another party, they would not be upheld, so why should banks be allowed to use them when you or I cannot?

What you say may be true in law, but it is still galling to those of us who manage our finances. We are told the terms, we accept them and if we stick within them we get free banking. The trade off is that if we don't stick within the terms we pay. Now what is going to happen is that the financially incapable will force a situation where the rest of us have to pay for our banking. I and, I suspect, a large number of others prefer the status quo.

Ahhh, so you are happy for unfair contract terms so long as the unfairness doesn't effect you?

I do have sympathy with your perspective as I never go into unauthorised overdraft, but your post assumes all those hit by unfair bank charges are simply feckless, which is not the case. A year ago I noticed that my two elderly parents had been cutting back on their usual shopping and not using their car much. They are far too proud to ask for help and have decent private pensions but after much questioning it turned out they were overdrawn to the tune of £2000. Their pension company had changed the date their pensions were paid which put them out of sync with all their direct debits. Despite many conversations with the bank to re-arrange the date these DD's were paid the bank continued month after month to pay them a day or two before their pensions arrived resulting in £35 times 12 per month plus additional charges. My parents are of the generation where one does not argue with a bank, so they were cutting back and back in an effort to keep up with the charges. As you can imagine I visited their bank in person and made my disgust clear at full volume on a busy Friday luchtime. Three days later my parents were credited with £3000 and a letter of apology and since then they have paid the DD's the day after the pensions arrives, not the day before. I am sure there are some people who are simply incompetant, but don't assume everyone who suffers from these charges is.

[siscar]

biglepton said:

Ahhh, so you are happy for unfair contract terms so long as the unfairness doesn't effect you?

Not at all, I'm not convinced that they are unfair.

biglepton said:

I do have sympathy with your perspective as I never go into unauthorised overdraft, but your post assumes all those hit by unfair bank charges are simply feckless, which is not the case. A year ago I noticed that my two elderly parents had been cutting back on their usual shopping and not using their car much. They are far too proud to ask for help and have decent private pensions but after much questioning it turned out they were overdrawn to the tune of £2000. Their pension company had changed the date their pensions were paid which put them out of sync with all their direct debits. Despite many conversations with the bank to re-arrange the date these DD's were paid the bank continued month after month to pay them a day or two before their pensions arrived resulting in £35 times 12 per month plus additional charges. My parents are of the generation where one does not argue with a bank, so they were cutting back and back in an effort to keep up with the charges. As you can imagine I visited their bank in person and made my disgust clear at full volume on a busy Friday luchtime. Three days later my parents were credited with £3000 and a letter of apology and since then they have paid the DD's the day after the pensions arrives, not the day before. I am sure there are some people who are simply incompetant, but don't assume everyone who suffers from these charges is.

There is a problem with that story. The pension company changed the date, not the bank, banks don't control when other people put money into an account or when others take DD payments out of an account. The dates of standing orders are in the control of the banks, but the dates of DDs are not. (I could but won't bore you with the full details of how it works). I would expect that the bank told your parents to contact the DD originators to get them to change the dates, that is how it should work.

In those circumstances I would expect the bank would refund the charges even though none of it was the bank's fault, they presumably also got in touch with the DD originators and got them to change dates, even though that was not something they had any obligation to do.

I don't see that story as an argument against bank charges, I have elderly parents, they get confused by all sorts of routine things, the problem in your story is the pension companies changing payment dates on elderly customers - they are the people who should be the target of your anger.

[jamesgrrr]

Gizmo! said:

I would suggest that you read the terms and conditions of the account, including any 'our charges explained' leaflets.

If you've been using the account, that is implicit acceptance of those terms.

Not that this seems to be worrying the courts at the moment, much to my irritation and that of many people who have very carefully managed their finances over the years...

So you're glad that thousands of (generally poorer) people have been charged millions of pounds by institutions that make billions of pounds profit each year? My bank have charged me £35 for refusing a payment before. They just refuse it, it doesn't cost them £35 to send an automated letter.

[tinman0]

siscar said:

biglepton said:

Ahhh, so you are happy for unfair contract terms so long as the unfairness doesn't effect you?

Not at all, I'm not convinced that they are unfair.

biglepton said:

I do have sympathy with your perspective as I never go into unauthorised overdraft, but your post assumes all those hit by unfair bank charges are simply feckless, which is not the case. A year ago I noticed that my two elderly parents had been cutting back on their usual shopping and not using their car much. They are far too proud to ask for help and have decent private pensions but after much questioning it turned out they were overdrawn to the tune of £2000. Their pension company had changed the date their pensions were paid which put them out of sync with all their direct debits. Despite many conversations with the bank to re-arrange the date these DD's were paid the bank continued month after month to pay them a day or two before their pensions arrived resulting in £35 times 12 per month plus additional charges. My parents are of the generation where one does not argue with a bank, so they were cutting back and back in an effort to keep up with the charges. As you can imagine I visited their bank in person and made my disgust clear at full volume on a busy Friday luchtime. Three days later my parents were credited with £3000 and a letter of apology and since then they have paid the DD's the day after the pensions arrives, not the day before. I am sure there are some people who are simply incompetant, but don't assume everyone who suffers from these charges is.

There is a problem with that story. The pension company changed the date, not the bank, banks don't control when other people put money into an account or when others take DD payments out of an account. The dates of standing orders are in the control of the banks, but the dates of DDs are not. (I could but won't bore you with the full details of how it works). I would expect that the bank told your parents to contact the DD originators to get them to change the dates, that is how it should work.

In those circumstances I would expect the bank would refund the charges even though none of it was the bank's fault, they presumably also got in touch with the DD originators and got them to change dates, even though that was not something they had any obligation to do.

I don't see that story as an argument against bank charges, I have elderly parents, they get confused by all sorts of routine things, the problem in your story is the pension companies changing payment dates on elderly customers - they are the people who should be the target of your anger.

What biglepton is describing is the catch 22 that the banks are putting people in, and if you haven't been in that catch 22 its very difficult to understand how it operates and how you can get out of it. You really do get taken to the cleaners by the bank over a huge amount of time. You lose a huge amount of control over your finances as the bank starts to put in each charge, and you have to fight each charge as it happens.

There are different ways the catch 22 starts and when it starts - its the unstoppable steam roller. You get flattened.

I've been in the catch 22 in the early 90s and what the bank does to you is soul destroying. They been doing this to innocent punters for years and its not before time that the worm turned.

[TheCarpetCleaner]

siscar said:

TheCarpetCleaner said:

If the banks were running their business purely on huge penalty charges, surely they were not running their business properly?

I have never been overdrawn and have never suffered the charges, however I can still see where the problem is.

Its even worse than the credit crunch bks IMO - if they cannot survive without running free bank accounts from penalty charges, then they were trading on free money in the first place.

Eh? They aren't running purely on penalty charges but it is a factor. You run a business I think - if you were prevented from charging for some aspect of what you do you would either stop doing it or would charge more for something else. That's what will happen here, if they lose their income from penalty charges they will make up for it elsewhere, and that will be the end of free banking. After all free banking is pretty much a UK thing, go to most other countries and you will pay for your banking.

I do run a business, three in fact.

We have never had to use it, but we do reserve the right to charge a small fee if someone signs to arrange an appointment and then cancels last minute. Thankfully we have a very good flexible relationship with all our clients, so we are willing to help.

You say they are not running on penalty charges, well thats fine then. In that case, when the law is applied to them, as it is to everyone else, then the lack of penalty charges will make no difference to them so they won't have to threaten ending free banking - because surely those costs are all used in covering their losses.... right?

[siscar]

tinman0 said:

What biglepton is describing is the catch 22 that the banks are putting people in, and if you haven't been in that catch 22 its very difficult to understand how it operates and how you can get out of it. You really do get taken to the cleaners by the bank over a huge amount of time. You lose a huge amount of control over your finances as the bank starts to put in each charge, and you have to fight each charge as it happens.

There are different ways the catch 22 starts and when it starts - its the unstoppable steam roller. You get flattened.

I've been in the catch 22 in the early 90s and what the bank does to you is soul destroying. They been doing this to innocent punters for years and its not before time that the worm turned.

I understand precisely how it happens. You sign a cheque or make a payment that you don't have the money to cover, they charge you £35 for this. That means that you have even less money, when some get paid in you have less than you would have making it even more likely that you will go overdrawn again and get more charges. The more charges, the more overdrawn you get and so on....

But the reality is that all of this pays for free banking for the rest of us.....

I have no problem with people arguing that we shouldn't have free banking, that we should pay for it and have lower charges if we go overdrawn. But nobody does this, the argument is always that charges are bad without making to connection to free banking.

[siscar]

TheCarpetCleaner said:

I do run a business, three in fact.

We have never had to use it, but we do reserve the right to charge a small fee if someone signs to arrange an appointment and then cancels last minute. Thankfully we have a very good flexible relationship with all our clients, so we are willing to help.

You say they are not running on penalty charges, well thats fine then. In that case, when the law is applied to them, as it is to everyone else, then the lack of penalty charges will make no difference to them so they won't have to threaten ending free banking - because surely those costs are all used in covering their losses.... right?

Wrong - I said 'They aren't running purely on penalty charges but it is a factor.' It is one of their income streams, not their only one but one of them. Cut that income stream and they will recoup that by ending free banking, it's not a threat, it's a fact. Banks make a lot of money but not much of it comes from providing personal bank accounts particularly to people with little money.

Edited by siscar on Sunday 11th May 22:01

[TheCarpetCleaner]

Thats where our views differ, I do not think its right for ANY institution to make profit from penalty charges.