The Banking industry is in court again, this time appealling against a judgement given when the OFT went to court and claimed that bank charges were unfair and that the OFT should be able to decide on what a fair charge would be.

The QC for the banks claimed that the charges provided a significant part of the income the bank received to cover the cost of bank accounts.

You can probably see how obviously unfair this is in that the people who may struggle to maintain their bank accounts in the black end up subsidising people who can easily afford the cost of running a bank account.

One of the appeal judges picked up on this point and said that this seems to be clearly unfair. A view regected by the banks on the basis that the whole range of banking services was covered by this so it was not unfair.

We have recently seen how the banks have considered themselves and their profits more important than any countries economy. So long as they get their bouses they don’t give a toss what happens to anyone else.

It is shocking that the banks have been allowed to get into a position where they can do so much damage but it is even more shocking that they have such arrogance as to think they can decide what is decent, honest and what justice really means.

The banks are supposed to be a service industry but they seem to continue to believe they are the masters of the universe and can do anything they like. The sooner they are cut down to size the better off we will all be.

Money Magic: Seven Simple Steps to True Financial Freedom (Quick Reads)

After a long wait we finally have a result and it seems to be a good one for the consumer. The judge has broadly agreed with the view of the OFT that bank charges should be considered by the OFT under the consumer contract regulations. There will be a delay while the banks are considering an appeal, something they will very likely want to do because every delay saves them a lot of money.

The full judgement is available thanks to the BBC website <here>

Money Magic: Seven Simple Steps to True Financial Freedom (Quick Reads)

The Banks seem to have been encouraged by the recent court result in Birmingham in which a district court found in their favour over a bank charges refund claim. The BBC is reporting several cases of customers receiving letters or phone calls from banks who are suggesting that their claims are likely to fail following this result.

It would seem that this new tactic is intended to try and scare people off from claiming refunds for their penalty bank charges even though the case cannot, apparently, be used as a precedent in other courts. The case referred to was found in the Bank’s favour after the judge considered their terms and conditions. It would seem that he ruled on the basis that they had followed their own terms and conditions rather than ruling on the case as to whether they were legally allowed to make these charges.

The Banks with their heavy handed approach are once again are clearly demonstrating that customers are not what they care about and customer service is considered a joke to them. No company that wants to maintain good relations with it’s customers is going to penalise them and charge them ridiculous fees is it? Rather than explaining and listing the work they have carried out in dealing with a defaulting account the banks simply deduct money from the defaulting customer’s account with no regard to the effect that might have on the customer.

Perhaps they are concerned that if people saw an invoice something like the following, it would make them look like rip-off merchants?..  ‘Computer printout of standard letter, including postage using one piece of paper, one envelope, less than a penny’s worth of electricity & ink and one postage stamp…. £35  Not forgetting that they then proceed to bounce any further transactions and charge you again for a similar letter plus excess overdraft fees and any other charges they can think up.

This complete lack of customer care and the way that all the banks appear to act together and speak with one voice and behave in similar ways proves that competition isn’t working. There is no competition when all of the banks behave in such similar ways. If, as it appears, competition isn’t working then the government must step in and take action. Government has a responsibility not just because they are supposed to represent, protect and defend the public from those who would unfairly abuse them but also because more and more, the government is encouraging people to have bank accounts to receive payments of pensions, benefits and grants.

It is becoming essential in the modern world to have a bank account so banking has moved to a level beyond just a private service for those who want it. We now have a situation where banking has become an essential public service so it must be properly supervised to prevent abuses.

There is currently an OFT investigation into banking but that is for the longer term. It is not expected to report until the end of the year

In the meantime banks continue to make a mockery of the legal system by claiming they will defend cases in court but they don’t turn up and they have been paying out the claims in full. The case referred to at the beginning of this piece was a case like this except it would appear the bank forgot about it. They had no representative in court when the case was heard. They either had forgotten about it or they just couldn’t be bothered to turn up. Either way it demonstrates a lack of regard and respect for the legal system.

The banks give every reasonable person the impression that they consider themselves above the law.

The law states that default fees should only reflect the cost of administering the default. In an age of computer generated letters and account management it is hard to see how the costs can be higher than a couple of pounds at most. The banks, as yet, have made no attempt to demonstrate they are justified in making the charges they currently apply.

They are being less than honest in claiming they will defend cases when experience has shown they do not do so. A court in Leeds recently had 77 claims listed for trial on one particular day but as the day wore on all claims were settled in favour of the claimants with not one actually reaching the court. Thousands of people have successfully reclaimed their bank charges often with additional interest charges but not once have the banks appeared in court to challenge the claim. Yet they continue to argue that these charges are fair and reasonable.

The OFT decided last year that it was prepared to challenge credit card fees in excess of £12 and the whole credit card industry dropped their charges to £12 or less. Up until that change they had maintained that their charges were legal and fair. Just as the banks now claim in regard to bank charges. So why weren’t the credit card companies prepared to justify those higher charges in court?

It is time something was done. I fear we shall have to await the outcome of the OFT review but this has been going on for far too long already. Far too many people have been punished with charges mounted upon charges for quite small mistakes in their account management. Few people would argue that any charge is unfair but very very few would even try to argue that these charges applied by the banks are fair.

Money Magic: Seven Simple Steps to True Financial Freedom (Quick Reads)