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LB mentioned in Business Week magazine

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  • LB mentioned in Business Week magazine

    see Press Forum for the details

    :beagle:

    Britons Strike Back at Bank Fees

    Britons Strike Back at Bank Fees

    Is it the end of overdraft charges? British consumers are suing eight banks over what they think are unfair practices. The U.S. is watching carefully
    by Kerry Capell

    On Jan. 14, a long-awaited hearing begins in Britain to determine the legality of bank overdraft charges. The test case pits Britain's main consumer watchdog against eight big British banks in a battle that will have major ramifications for retail banks and their customers. The court's ruling, says HSBC Holdings (HBC) Chairman Stephen Green, could "change the economics of retail banking" in Britain.

    British banks, like their U.S. counterparts, love to charge their depositors overdraft fees—those levies a bank collects for honoring a check when there's not enough dough in the account to cover it. British overdraft charges average some $57, much higher than the U.S. average of $34. Last year, banks in Britain generated an estimated $7 billion from overdraft and excess-borrowing charges, according to the Office of Fair Trading, the government's competition watchdog.

    A good deal for the banks—except British consumers have been suing them like crazy over the last two years, claiming the fees breach consumer-protection laws. Pressed by the threat of litigation, the top five banks refunded customers $810 million in the first half of 2007 alone. Now, in a development that could influence similar battles in the U.S., the court will decide whether or not such charges breach consumer contract regulations, as the Office of Fair Trading claims they do.

    Empower Yourself: Sue Your Bank

    If the court agrees with the OFT, banks could be forced to refund overdraft charges dating back six years. A ruling isn't expected for several months at the earliest and appeals could drag the case out until next year.

    If the banks are humbled, it will be because of the mad-dog zeal of the activists. One is Peter Brown. The soft-spoken history lecturer at the University of Wales has reclaimed a total of $13,000 in overdraft fees and resulting interest charges from four banks. He co-founded Legal Beagles - Consumer Rights Forum , a Web site that offers claim forms "for the self-litigating consumer." Says Brown, "Taking your bank to court is incredibly empowering."

    The activists argue the banks' overdraft charges far exceed the actual cost of $9 or so they incur when customers overdraw on their account, and they should not reap such huge profits. Britain's banks argue these charges pay for a service provided to customers, so they are not covered by consumer protection laws that put a cap on penalties.

    Settling With a Law Student

    The British Bankers Assn. warns if the ruling goes against the banks, such standard perks as free checking and no-fee ATM services may go by the board. "There is no consequence-free result," warns the association's chief executive officer, Angela Knight. "If banks are put in a position where they have to change their business model, then they will. It may be there has to be a substantial change in how banks charge for their services."

    Campaigners such as Stephen Hone wants banks to declare exactly how much it costs them every time a customer goes into the red without permission. Three years ago while still a law student, Hone became one of the first to take his bank, Abbey National, to court, claiming bank penalty charges must reflect the true cost of administering them. As the court date drew nearer, Abbey kept upping its offer to settle.

    "By the time I finally settled for $10,000, it was around 600% more than I initially asked for," Hone says. His advice Web site, penaltycharges.com (motto: "So easy even a monkey can do it"), is attracting attention internationally. "I have e-mails from all over the world, including the U.S., from people wanting to know how they can challenge their banks."

    Can the U.S. Be Far Behind?

    No doubt, consumer groups and legal experts in the U.S. are watching the case in Britain closely. A bill in Congress would prevent U.S. banks from enrolling customers in overdraft-protection programs without their consent. Last year, U.S. banks and credit unions made $17.5 billion from such overdraft fees, according to The Center for Responsible Lending, a Washington nonprofit.

    The banks in the U.S. are balking. But if high overdraft charges are banned in Britain and yet the banks there remain profitable, "it will undercut the U.S. banks' argument that they must impose these charges or they will go out of business," says Elizabeth Warren, a professor and bankruptcy expert at Harvard Law School. "The British may give us an example of profitability on fairer terms."

    With Jessica Silver-Greenberg
    Capell is a senior writer in BusinessWeek's London bureau.
    __________________
    Last edited by Amethyst; 14th January 2008, 23:24:PM.

  • #2
    Re: LB mentioned in Business Week magazine

    LOL I notice that Stephen Hone's .co.uk site is not linked its his .com one which I beleive is one that charges to reclaim.

    Comment


    • #3
      Re: LB mentioned in Business Week magazine

      No the link is wrong!

      He was miffed that they made the mistake - he only found out when I told him the article had appeared. Too late to do anything now though.

      Comment


      • #4
        Re: LB mentioned in Business Week magazine

        Well done Pete. Is this a taster for your article ?

        Comment


        • #5
          Re: LB mentioned in Business Week magazine

          I suspect that this will be the full article, but the published version will hopefully have photos. I certainly hope so because they went to a lot of trouble and I spent a 12-hour day going to London! msl:
          :beagle:

          Comment


          • #6
            Re: LB mentioned in Business Week magazine

            Ahh right, its a good mention for both sites though, well done.

            Tanz

            Comment


            • #7
              Re: LB mentioned in Business Week magazine

              If you look at the top corner of their website, the current edition is dated 21st and appeared online last Friday 13th.

              On this basis, we should be in the edition for for 28th, due to come out next weekend.

              Don't ask me why they do it this way, I'm just a litigant in person msl:
              I hope this is clear and transparent.

              Comment


              • #8
                Re: LB mentioned in Business Week magazine

                The 28 Jan issue has just been uploaded onto the website, but it's not clear that the article is actually in it as it can be found through the Europe link.

                If someone in London can have a look at a copy it would be good to answer the question here so we know whether to try to get copies.

                :beagle:

                Comment


                • #9
                  Re: LB mentioned in Business Week magazine

                  I will pick one up at Gatwick today......:carrot:
                  "Although scalar fields are Lorentz scalars, they may transform nontrivially under other symmetries, such as flavour or isospin. For example, the pion is invariant under the restricted Lorentz group, but is an isospin triplet (meaning it transforms like a three component vector under the SU(2) isospin symmetry). Furthermore, it picks up a negative phase under parity inversion, so it transforms nontrivially under the full Lorentz group; such particles are called pseudoscalar rather than scalar. Most mesons are pseudoscalar particles." (finally explained to a captivated Celestine by Professor Brian Cox on Wednesday 27th June 2012 )

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                  Comment


                  • #10
                    Re: LB mentioned in Business Week magazine

                    Just flying in for the press coverage then? - quality, I like it

                    Comment


                    • #11
                      Re: LB mentioned in Business Week magazine

                      The article has finally appeared as below.

                      Not a good photo IMO and they were planning to use one outside the bank with special lighting - they were so much better.

                      About That Overdraft: See You in Court

                      Banking January 24, 2008, 5:00PM EST

                      About That Overdraft: See You in Court

                      Brits are suing over the fat fees banks charge to cover a dud check. The consumer ire could spread to the U.S.
                      by Kerry Capell

                      British banks, like their U.S. counterparts, love overdraft fees—those levies they collect for honoring a check when there's not enough money in the account to cover it. British overdraft charges average $57, nearly 70% more than in the U.S. Last year, banks in Britain generated some $7 billion in overdraft charges and excess-borrowing fees, says the Office of Fair Trading, Britain's competition watchdog.

                      Good deal for the banks—except that customers have been suing them like crazy, claiming the fees violate consumer-protection laws. Pressed by the litigation, Britain's top five banks refunded $810 million to customers in the first half of 2007. Now, the Office of Fair Trading has brought suit against the top banks, a move that could affect similar battles in the U.S.

                      On Jan. 16, Britain's High Court began hearing a case to decide whether the fees are fair. HSBC (HBC) (HBC)Chairman Stephen Green told analysts in November that the outcome could "change the economics of retail banking" in Britain.

                      If the banks are humbled, it will be because of the zeal of consumer activists. One is Peter Brown. Four banks have refunded the history lecturer from the University of Wales a total of $13,000 in overdraft fees and related penalties from four banks. He co-founded legalbeagles.info, a Web site that offers claim forms "for the self-litigating consumer." Says Brown: "Taking your bank to court is incredibly empowering."

                      Activists argue that the banks' overdraft charges far exceed the costs incurred—about $9—when customers overdraw their accounts and that banks shouldn't reap such huge profits. Britain's banks argue these charges pay for a service provided to customers, so the fees are not covered by consumer protection laws that put a cap on penalties. The British Bankers' Assn. warns that if the ruling goes against the banks, standard perks such as free checking and no-fee ATM service may go by the board. "There is no consequence-free result," warns Angela Knight, the association's chief executive.

                      What about the other side of the pond? A bill in Congress would limit U.S. banks' use of overdraft-protection programs. American banks are balking. But if these charges are banned in Britain and the banks there remain profitable, "it will undercut the U.S. banks' argument that they must impose these charges or go out of business," says Elizabeth Warren, a professor and bankruptcy expert at Harvard Law School. "The British may give us an example of profitability on fairer terms."

                      Capell is a senior writer in BusinessWeek's London bureau .

                      Comment


                      • #12
                        Re: LB mentioned in Business Week magazine

                        Who is that bloke with the suitcase in the picture? Could it be
                        Mr Kafka, the legal Beagles Press Officer?? Or am I mistaken?

                        Comment


                        • #13
                          Re: LB mentioned in Business Week magazine

                          To add to that conclusion, the OFT test case has global ramifications. That last paragraph is VERY Important.

                          Comment


                          • #14
                            Re: LB mentioned in Business Week magazine

                            Well done Kaf !!!

                            Comment


                            • #15
                              Re: LB mentioned in Business Week magazine

                              Originally posted by Kafka View Post

                              Not a good photo IMO and they were planning to use one outside the bank with special lighting - they were so much better.
                              Totally agree, you look much younger in real life!

                              Great stuff Pete, you'll have the US banks quaking in their (expensive) shoes!
                              You can't scare me, I have children.

                              Comment

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