Bank customers 'support charges'

[Legal Beagles]

Current account customers like the present system of only paying they are in the red, the High Court is told.

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[Guest]

Re: Bank customers 'support charges'

This statement is based on a flawed premise founded on logic that would not convince a five year old.

If this were true and the banks needed the money that charges generate in order to offer free banking to those who do not slip into the red, then how is it that for over a year they have been bleating about the fact that hardly any of their customers actually pay charges?

[TANZARELLI]

Re: Bank customers 'support charges'

Cause there on the back foot and they will try anything to try and convince the media they are hard done by LMAO

[scoobydoo]

Re: Bank customers 'support charges'

It is incorrect to say they are charged only for those services," he said.

"The package of services is always being supplied. "They are at one and the same time charged both for the specific service and the overall bundle of services," he added


But I have a couple of questions- if the charges include the whole bundle of services - that means if you exceed your OD limit you are charged for everything
If you are in credit and have free banking -you are charged for nothing?So surely that is a penalty for those who go OD? So if no body went OD there would be free banking for all! I DONT THINK SO. Or am I reading this incorrectly?


Secondly as the case is against a group of banks - what happens if their arguments about the charges are all different? Hope they are as they are all spending customers money of expensive representation - would be a waste of money if they all came up with the same argument wouldnt it:rolleyes:

[scottishlass]

Re: Bank customers 'support charges'

If you are in credit and have free banking -you are charged for nothing?So surely that is a penalty for those who go OD? So if no body went OD there would be free banking for all! I DONT THINK SO. Or am I reading this incorrectly?

Thanks Scoobydoo that is what I was thinking,I am having great difficulty trying to understand all this

[Nattie]

Re: Bank customers 'support charges'

exceeding the limit could be argued to be an arrangement fee for that service. I know it is an expensive service but it could still be classed as a service.

[Guest]

Re: Bank customers 'support charges'

No, I really don't think it can be and this is termed "cloaking" and is understood by the OFT to be what the banks have been attempting to do. They have retroactively adapted their T&C's in order to suit the present circumstances.

If a term has the effect of an unfair penalty, it will be regarded as such. Thus a penalty cannot be made fair by transforming it into payment of a fee for a "service."

Indeed, this has long been understood, take for example Lord Elphinstone v Monkland Iron and Coal Co [1886] where Lord Watson stated that there is a presumption that a charge is a penalty when "a single lump sum is made payable by way of compensation, on the occurrence of one or more or all of several events, some of which may occasion serious and others but trifling damage" and one hundred years later Mr Justice Coleman, in Lordvale Finance plc v Bank of Zambia [1996] stated: "whether a provision is to be treated as a penalty is a matter of construction to be resolved by asking whether at the time the contract was entered into the predominant contractual function of the provision was to deter a party from breaking the contract or to compensate the innocent party for breach. That the contractual function is deterrent rather than compensatory can be deduced by comparing the amount that would be payable on breach with the loss that might be sustained if breach occurred."

If it could be argued that it is an arrangement fee for a service, then why is it always the same fee, regardless of whether it is for 60p or £600? Furthermore, if it is a fee for a service, then what of the fact that the fee must be reasonable under s.15 of the Supply of Goods and Services Act 1982?