Lloyds TSB - First bank to win Court Case (Overdraft Charges)

[Mey]

Well i'm certainly happy that judges have started to see sense. Goodbye American style of living. :england:

Bank's overdraft charges upheld
Lloyds TSB has become the first bank to win a court case after being sued by a customer for imposing supposedly unfair overdraft penalty charges.

District Judge Cooke, at Birmingham County Court, dismissed a claim for £2,545 from Kevin Berwick.

Mr Berwick argued Lloyds TSB's charges for having an unauthorised overdraft were illegal contractual penalties.

But Judge Cooke decided the bank's charges were in fact legitimate fees for servicing an overdrawn account.

As such, the judge said they were legal.

"Having held that the charges complained of are not charges for breach of contract but part of the price of the services provided by the bank....he has not satisfied me that he has any ground in law for recovering from the bank the amount of any charges which he has paid to it," he said.

Lloyds TSB said it was pleased with the ruling.

"It appears to acknowledge our position in respect of current account service charges," said a spokeswoman.

"The court has agreed with us that these are charges for a service and not default or penalty fees as has been argued by others," she added.

Blow to claimants?

As this judgment has come from a district judge, it is not binding on any other court, in the way that a High Court judgment might be.

However, as the first judgment of any kind in this sort of case, it could be a blow to the hundreds of thousands of people who are still trying to claim that they have been overcharged by their banks for running unauthorised overdrafts.

So far, many claimants have been successful because their banks have settled their cases before the issue came before a judge, precisely in order to avoid an adverse legal decision.

Now, the first decision in which a judge has given an opinion on the law has gone in a bank's favour.

Marc Gander, of the Consumer Action Group, a leading bank charges campaign, said he was very disappointed.

"We feel the judge has not considered the fact that disguising penalties as a fee for a service is a very common device for circumventing established law.

"The judge appears not to have looked behind the words on the contractual document," he said.

Possible appeal

Although Mr Berwick turned up at the original hearing in Birmingham to argue his case and was questioned by the judge, Lloyds TSB chose not to attend and relied simply on a written defence which it had submitted in advance.

Neither did the bank have any lawyers present in court when the judgment was handed down.

Mr Berwick said he was annoyed by the outcome of his claim.

"I was expecting to win as I made a good job of arguing my case," he said.

He is now considering an appeal after the judge gave him leave to do so.

 

[Marc]

Judges? You mean..Judge

Its county court, so no precedent is set. Judges cannot use this case when reviewing other cases. Anyway, if he appeals, im certain the ruling will be overturned as the judge missed some key elements and they guy himself missed a few things that were the key to his case

 

[Raven]

unless the charge is in the contract they cant charge what they like, they can charge an admin fee but a £25 or £30 (whatever it is) for going a couple of quid overdrawn is quite clearly bullshit and the banks deserve everything they get. I would also be quite happy to pay a charge for banking with someone so long as the level of service reflected the charge, as it stands very few banks have any idea about customer service or satisfaction.

 

[Mey]

Not going to be a popular one here, but, I’m glad this happened. If people continue to reclaim charges - successfully - then they are just going to get into more trouble financially..

Banks work on trust if there's a loss of that trust (customer suing bank) then the bank is going to start closing their relationship with that customer down (bye-bye bank accounts) and if that means repaying unpaid Loans / Overdrafts in full when the bank demands it, then people are going to be in trouble.

Failing that, the bank could in theory just offset the amount of charges reclaimed against existing debt.

Naturally working for Lloyds TSB I am bias, but believe me; if the banks start to lose money (and I’m not saying they make their money from these charges) everyone in my opinion is going to be hit with decreasing interest rates on savings and increasing interest rates on borrowing.

(The views expressed in this post do not reflect those of the organisation “Lloyds TSB”, and are the expressed opinions of the author.)

 

[tris-]

Judges? You mean..Judge

Its county court, so no precedent is set. Judges cannot use this case when reviewing other cases. Anyway, if he appeals, im certain the ruling will be overturned as the judge missed some key elements and they guy himself missed a few things that were the key to his case

yeh i think it said that in the article

county court is a balance of probabilities anyway. all you gotta do is make the judge believe you should win.

 

[Lamp]

The decision was innevitable. It will be followed by a High Court precedent before long.

If the retail banks had to refund their overnight interest-rate borrowing pools, what do you think's going to happen to interest rates ? And then inflation ? Cats fighting dogs. Civil war. The end of mankind.....

 

[Mey]

unless the charge is in the contract they cant charge what they like, they can charge an admin fee but a £25 or £30 (whatever it is) for going a couple of quid overdrawn is quite clearly bullshit and the banks deserve everything they get. I would also be quite happy to pay a charge for banking with someone so long as the level of service reflected the charge, as it stands very few banks have any idea about customer service or satisfaction.

I've always found it odd that when you take a bank's money without asking they charge you and everyone complains.

If that happened to any other organisation it is usually called Fraud or Theft.

 

[gohan]

unless the charge is in the contract they cant charge what they like, they can charge an admin fee but a £25 or £30 (whatever it is) for going a couple of quid overdrawn is quite clearly bullshit and the banks deserve everything they get. I would also be quite happy to pay a charge for banking with someone so long as the level of service reflected the charge, as it stands very few banks have any idea about customer service or satisfaction.

barclays do \0/


and ill be honest lloyds are good too. i have a llyods account which went over drawn cos mythic (US servers) decided to auto renew my subs for the first time even thought thier is no choice for auto renew or not and every other time ive had to manuly renew, well the ONE time they auto renewed was the first time my wages went into my barclays account an although i had like 1.5k it wasnt in my lloyds account hence i went overdrawn, i explained to lloyds what had happened an they just said, yeah ok that the companys fault (mythic) and actaully its fraud as you havent givern them permission (no tick her to auto renew box ect an you only subcrice for one month) so they refunded the number an sugested i complain to mythic for compensation,


but im to fucking lazy

 

[soze]

Im glad too a mate of mine did this and he still sees this as a reason for not handling his finances properly.

I have only even been over my overdraft once and then Lloyds just sent me a letter telling me but waved the charges. So I have no reason to do this

 

[Raven]

I've always found it odd that when you take a bank's money without asking they charge you and everyone complains.

If that happened to any other organisation it is usually called Fraud or Theft.

Or they could make it so going overdrawn is impossible by bouncing the cheque or refusing the direct debit (whatever)

Personally i don't go over my overdraft limit. Well, i think i did when i was like 18 or something, years ago but who didn't?

How can it be fraud if the bank authorise the overdraft (they control your money) It would only be theft or fraud if the customer physically moves the money, not if the bank does it in full knowledge that in doing so will cause a bank charge.

What i would rather see is a charge for refused direct debits and bounced cheques, one off charges. How is someone who is in financial trouble able to get themselves out of it if the bank charges them silly money for each day/week whatever that they are overdrawn?

 

[yaruar]

I've always found it odd that when you take a bank's money without asking they charge you and everyone complains.

If that happened to any other organisation it is usually called Fraud or Theft.

That's why they have overdraft fees, they are the cost of the borrowing, be it authorised (preferential rate) or unortharised (silly rate) Having just got hit with a 100 quid charge for going over 22 pence for less than a day i can't say i have much sympathy for a bank which makes billions of profits a year

 

[Mey]

Actually Raven your wrong, if you use your debit card the bank has a duty of care to pay the shop the money due to the fact that they have supplied you with the goods on the grounds that it will be paid (the shop has no idea if you have money or not). If you read up on how the debit cards work i'm sure you will understand.

 

[Mey]

Purely out of interest would you rather the banks reverted your bank accounts to the basic account where you have no means to go overdrawn? I.e no ability to have DD's, No debit Card, No standing orders, Simply an ATM cardd. That way you won't be able to go overdrawn.

You'll have to pay your bills the old way, and pay for shopping in cash.. (no internet shopping either - sorry). Thousands of old people manage it..

(not the views of lloyds tsb blahblah..)

 

[tris-]

How is someone who is in financial trouble able to get themselves out of it if the bank charges them silly money for each day/week whatever that they are overdrawn?

thats like saying its the banks responsibility to control how much you spend. its never the banks fault if your an idiot and spend more than you can manage.

and bank charges. well if your contract says you get charged £xxx then you should pay it. unless parliament passed an act saying "charges over £xxx are illegal", why shouldnt you pay it?

 

[GReaper]

You're a little bit biased as you work for the bank.

The point is that these charges are unlawful, any charge may not exceed the cost of the breach. The banks cannot charge an amount which has no relation to what it actually costs for the loss of money and the administrative costs of it. Even if the contract says they'll be charging you £X, they can't charge an excessive (and unlawful) amount.

They should've been charging a reasonable amount in the first place, but now they're getting rather upset because they want to be above the law and charge the large amounts of cash which feed their insane profits.

Personally I'm rather shocked at how someone can manage to build up that much in bank charges.

 

[Raven]

You'll have to pay your bills the old way, and pay for shopping in cash.. (no internet shopping either - sorry). Thousands of old people manage it..

Wouldn't bother me at all tbh, due to the banks inability to prevent card fraud I do most of my shopping by cash anyway.

What would be nice is to charge the bank every time they fuck up. My bank told me my card had been cloned then took ten days to cancel it. They also managed to lose a standing order, the money went out one month then didn't the next. took them a month to get around to sending us a job lot apology. (this was Natwest)

Banks like all companies have become utterly shit due to cutting back to the bone to maximise profit, they like to pretend its to streamline to meet global needs or whatever retarded buzz word is flying around at the moment but at the end of the day they have simply become to over stretched to deal with real customer issues.

Now people are bighting back they have got a huff on.

 

[Marc]

In a way, this ruling is bad for the banks, as the guy in question is almost certainly going to appeal to the high court. With top solicitors, barristers, the OFT and Banking Ombudsman on his side, I would expect he will win and this would set a precedent to all banks.

People are getting confused here. The charges arent illegal, they are unlawful. The consumer contract regulations act of 1999 states that penalty charges made, must be proportionate to what it costs the bank. As a BBC investigation has already found out, this isnt the case. Tom Brennan is well into his case vs Nat West. Nat West are shitting themselves and keep trying to repay his charges, but Brennan is having none of it, because he knows he can win in the high courts and set a precedent.

To those saying "well you shouldnt go overdrawn etc". Not everyone has the luxury of well paid jobs, or having Daddy supporting them. The last thing they need, is the banks ripping them off and getting them into further trouble.

As one solicitor said "Lloyds make £7billion pound profit. WHy cant they just make £6.8billion and stop with these excessive charges"

 

[Case]

The problem people have is that once your down banks love to stick the boot in over and over to keep you down that way they make more money out of you.

A few years back I was out of work for 3 months and basically lived just within my limits, 1 particular month my electricity DD went from £30pm to £130pm (this was later rectified) this pushed me into an unauthorised overdraft generating a charge of £38 and caused 3 other direct debits to also bounce each causing a £38 charge total at this point within 1 day of going overdrawn £152. This of course then meant I didn`t have enough money for forth coming direct debits to be paid, my banks response? tough shit best of luck lolz. This is just one example of how these charges penalise the worst off, if the charge was reasonable say £2 to cover their costs then I wouldn`t have ended up in such a bad situation and would not have had further issues which basically because of the way banks charge such extortionate penalties cause much hardship for the lowest earners.

I took my bank to court and got refunded £1100 last October, was I justified? damn right I was that money was my money that they stole by offering my zero customer service and 90% of which was caused by their charges multiplying each other.

To those who say that it`s your own fault manage your finances better, get real sometimes shit happens and you have no options banks sticking the boot in helps no one but the rich. In terms of this particular case from reading about it it seems he claimed that the charges for the service of an unauthorised overdraft are unfair when really he should have been claiming that the charges levied amounted to penalties given the amounts as opposed to a fair charge for a service.

 

[Chronictank]

To those saying "well you shouldnt go overdrawn etc". Not everyone has the luxury of well paid jobs, or having Daddy supporting them. The last thing they need, is the banks ripping them off and getting them into further trouble.

No offence inteneded but if you manage your finanaces you wont go overdrawn (unless in RARE occurences when something out of the ordinary happens). You dont need a well paid job or "Daddy supporing" them to know how much money you have coming in, and how much you are going to spend regularly.
If you are regularly overdrawn you are either living out of your bounds or you are shit at organising your finances. In both cases you are to blame for spending more than you are earning

I am not excusing the banks in any way, but its plain wrong to say its a regular occurence to be overdrawn. It should be nothing more than a last resort not a regular loan

 

[Alan]

I kinda agree, people that live on the brink of their overdraft every month really need to take a long hard look at their finances and spending habits.

About 5 years ago I realised i was around 20k in debt and sinking deeper, its taken time but im down to my last 4k to pay off now, just gota budget and treat yourself every now and then - not every week

 

[Mey]

So if the bank only charged you £2 for going over you agreed limits you would do it more often, right'?

The bank charges have stayed the same for years.. it's only know we have the new culture of spending more than you can afford that it's become a problem.

 

[Gamah]

My heart bleeds for banks who make 3 billion a year from overdraft charges.
I am one of those bad men who reclaimed my overdraft charges, £540 thanks very much lloyds. If those wankers bounced a DD 6 times! at 35 time without putting a stop to it I have no sympathy with them (I was on holiday at the time)

Mey, Lloyds TSB was the worst banking experience in my life, no customer support, no flexibilty, no customer satisfaction and I actually felt they were trying to get as much money as possible from me.

You work for the shittest bank I have ever laid eyes on and I have made 3 others move accounts after I told them how I was treated by the sorry excuse for a bank.

I am with Nationwide and very happy now with a bank (Sorry Building Society) that looks after its customers.

 

[Mey]

My heart bleeds for banks who make 3 billion a year from overdraft charges.
I am one of those bad men who reclaimed my overdraft charges, £540 thanks very much lloyds. If those wankers bounced a DD 6 times! at 35 time without putting a stop to it I have no sympathy with them (I was on holiday at the time)

Mey, Lloyds TSB was the worst banking experience in my life, no customer support, no flexibilty, no customer satisfaction and I actually felt they were trying to get as much money as possible from me.

You work for the shittest bank I have ever laid eyes on and I have made 3 others move accounts after I told them how I was treated by the sorry excuse for a bank.

I am with Nationwide and very happy now with a bank (Sorry Building Society) that looks after its customers.

I'm sorry you had such a bad experince with the bank i work for, being a "customer service assistant" i feel quite insulted about that as i work damn hard to ensure the customer i'm dealing with is treated well and with respect. And as of yet i have had no complaints of any of my customers about the service i gave them..

I guess it's a case of situation. Some branchs will be better than others, and i imagine the same applies to other banks.

 

[Marc]

No offence inteneded but if you manage your finanaces you wont go overdrawn (unless in RARE occurences when something out of the ordinary happens). You dont need a well paid job or "Daddy supporing" them to know how much money you have coming in, and how much you are going to spend regularly.
If you are regularly overdrawn you are either living out of your bounds or you are shit at organising your finances. In both cases you are to blame for spending more than you are earning

I am not excusing the banks in any way, but its plain wrong to say its a regular occurence to be overdrawn. It should be nothing more than a last resort not a regular loan

As I said, its not always that easy. Its so easy to organise your finances when you lose your job isnt it.

Try living in the real world.

 

[Marc]

Even if you arent unemployed and have a low paid job, its still sometimes difficult to organise your finances to make sure you dont go overdrawn

 

[Gamah]

I'm sorry you had such a bad experince with the bank i work for, being a "customer service assistant" i feel quite insulted about that as i work damn hard to ensure the customer i'm dealing with is treated well and with respect. And as of yet i have had no complaints of any of my customers about the service i gave them..

I guess it's a case of situation. Some branchs will be better than others, and i imagine the same applies to other banks.

Well you need to go and work in Slough then 'cos they don't give a shit ..Thankfully I don't live there any more

 

[Chronictank]

As I said, its not always that easy. Its so easy to organise your finances when you lose your job isnt it.

Try living in the real world.

I dont live on the brink or running out of money,
if i was to loose my job today i would still have enough money to last me a fair while, why? Because i put a bit aside every month for exactly such an occasion.

As for losing your job, actually read my responce before going on your rant

Even if you arent unemployed and have a low paid job, its still sometimes difficult to organise your finances to make sure you dont go overdrawn

Thats hardly a good excuse, if you have a low paid job find a flat/room/whatever with a lower rent. In addition if you are below a certain income you can claim back and pay less tax as wel as other various support systems in place. Noone said it was easy to organise your finances, but to be frank its not exactly rocket science

 

[Case]

So if the bank only charged you £2 for going over you agreed limits you would do it more often, right'?

The bank charges have stayed the same for years.. it's only know we have the new culture of spending more than you can afford that it's become a problem.

Your making a massive assumption there, also your missing the basic point which is that banks are not allowed by law to charge penalty fee`s for going overdrawn, they can only charge you whatever it costs them to administer this situation and this has been proven time and time again to be around £2-£3 ish not £38.

There are some very niieve people posting how people should sort out their finances and not go overdrawn in the first place, you need a reality check often things happen beyond your control and banks should be there as a customer service company and be prepared to help you get out of a mess not cause the mess to get 10 times worse.

 

[Gamah]

Chron,

Sorry mate but you're on a pretty decent wage and still live with your parents, untill you have experienced living on your own/with a parnter you have no frigging idea how expensive it is.

I learned from my mistakes and manage my money pretty well now but it is a lot harder than you make out.

When your expenses increase 3 fold by moving out and having unexpected bills such as a car fucking up and costing 1k to repair etc you can come on here and preach to people how easy it is to save.

I think we disagree on this subject mate .

 

[Marc]

I dont live on the brink or running out of money,
if i was to loose my job today i would still have enough money to last me a fair while, why? Because i put a bit aside every month for exactly such an occasion.

Bully for you! What about people who dont have the luxury of being able to put enough away to live off, should they lose their job?

This however i guess could be argued if you are losing your job regularly i guess it counts as a regular occurance. In which case i would have the common sense to take out insurance for such an occasion like people who do contract work do, £10 p month is nothing if it covers you between jobs.

Ahh yes, these insurance policies. Aye, £30 a month (which is what a few people i know got) is really going to make a difference isnt it! Im talking about people working on the bread line here.

So unlike you i am living in the real world and am not deluded enough to think i can carry on by having a larger expenditure than income..

Neither are the people who go into their overdraft and end up paying £100's in charges. Again, im talking about the people in the bread line, who struggle to make ends meet. These are the people who the banks are ripping off.

Thats hardly a good excuse, if you have a low paid job find a flat/room/whatever with a lower rent. In addition if you are below a certain income you can claim back and pay less tax on that wage. Noone said it was easy to organise your finances, but to be frank its not exactly rocket science

Im sorry, but in my 10 years as a chartered accountant, ive never heard of anyone reclaiming tax back because they are on a lower wage. If they earn less than the personal threshold for tax, they just dont pay tax. Im not just talking about the prices of renting etc. Its getting dearer and dearer to live. Most low paid jobs, the payrises reflect the inflation rate, which is BS, meaning people struggle year on year. There are a lot of fixed costs, you have to meet each month, but there are also a hell of a lot of variable costs too, meaning sometimes, its difficult to budget month on month. What about self employed people? Who cannot guarantee their income each year, but still have to meet the same costs. I suppose its their own fault for being self employed eh?