Have Your Say: Beating the charges
Source – BBC News, Friday, 25 August 2006

Increasing numbers of consumers who think bank charges are unfair and illegal are taking their bank or building society to court to recover fees they have paid in the past.

Although the banks say their charges are both legal and reasonable, in many cases they are paying-out to customers rather than defending themselves in court.

I prefer the French system where overdrafts are not allowed. So customers ensure that their accounts are kept in credit. I have always kept my current account in credit and with cash machines and internet banking, you can easily find your balance. If you need to borrow (most of us do from time to time), get a loan. As an additional advantage French bank customers can write cheques without a guarantee card. The retailer knows that the cheque will be honoured. Oh - I should admit that I am a retired bank manager!
Brian S, Shropshire

I am caught up in a negative spiral of ever-increasing debt despite my efforts to clear the deficit. During the time it takes to clear my benefits, if any direct debits are demanded the bank charges me £30. It has insisted on applying hundreds of pounds in charges which continues to push me further into debt and so the spiral continues. I sought advice from a local debt centre but to no avail. Now I am in debt with utility companies with nowhere to turn for advice. I feel that the government has deposited a swathe of people of limited means into the banking system who have become easy money for the banks. The majority of these people like myself are trying to manage on a very low income and are powerless to defend themselves.
Charles Williams, Greenwich

Having exceeded my overdraft once too often I decided to follow the Which? recommended course of action. Having gone down the letters route and following the bank's final written response to my complaint, I am left with two options: the Financial Ombudsman (which is understaffed and overworked) or the Small Claims Court. I am currently going down the FOS route because I didn't really want to have to resort to a court process. The charges of £30 for going over the overdraft is madness. Why don't the banks prevent cards being used in order to avoid this happening? Charges for unauthorised overdrafts and returned cheques are, I fear, a major revenue stream for the banks.
Edward Hogan, Ledbury, Herefordshire

I would like to take Joanna Elson up on her suggestion to talk to your bank early if you get into difficulties. I went to my bank when I knew redundancy was imminent to explain that I may be unable to pay back bank loans accrued whilst at university. I was laughed at and told I was stupid not to have unemployment cover. I left feeling small, humiliated, and with nothing resolved. I went back the next month when things were getting serious. A different adviser told me they could give me a £42,000 loan! I left extremely disgruntled and concerned. My loans were small - I would say £15,000, but I couldn't live with the worry and in the end made myself bankrupt.
Gweet Tanner, Winchester

My ex-partner has been charged over £1000 in charges in nine months and has no way whatsoever of ever repaying these charges. The charges are eating up her two kids shoe money, holiday money and clothes money. The bank offered some in refunds, but not all. The government wanted all benefit recipients to be inside the banking system. It was like throwing the most vulnerable to the wolves. Families are being pushed over the edge by these charges.
Phil C

The banks have created a debtor underclass by offering easy money to consumers who the moment they fall into arrears suddenly find they are paying huge fees to the banks. I also believe this has been a deliberate policy on the part of the banks to create another captive income string. They don't want to go into court as they will have to justify their charges. There is a real scandal going on which the media is either unaware of or don't for some reason want to get involved in. The banks are also forcing the clogging up of the courts by forcing almost every claimant to issue County Court proceedings before settling in full pre-hearing.
Chris Harley, Bridport

The problem for me and I suspect many others is direct debits. The transactions cannot be changed easily or delayed by the payee. Banks and utilities aggressively marketed direct debit, but didn't point out that to change the mandates in any way, for instance to delay by a few days, you have to contact each payee individually. Compare that to paying by giro/cheque where you can easily delay payment until your account is liquid again. To sting a person for all their regular direct debits because a payment is delayed by a few days borders on extortion.
Mark, Reading

The charges are extremely disproportionate. They are ripping of poor customers like me. Just this year I have been charged when I put the money in the same day as the direct debit. The bank said the direct debit goes first thing in the morning; so money put in on the day will not count. However, the account does not go overdrawn until the next day. They charge preposterous amounts, such as £35, and then do not pay the direct debit. They should be limited by law.
Miguel Mendes, London

At the age of 16 when I was at college and not working I began to get charges of £30 it got me into severe debt. At the age of 17 the bank asked me to take out a loan to get myself out of the mess. The charges totalled £650. The bank gave me a loan for £900, but I am now £6,000 in debt. I believe the way they have handled my account is terrible. I'm now working ever so hard to pay all these charges back. I am currently trying to claim back £2,500 from the bank for unfair bank charges and don't believe they should be allowed to do this as it causes a lot of stress and ruins peoples lives.
Oliver Foster-Burnell, Taunton

If the banks are saying they will have to abolish free banking if they reduce penalty charges then surely they are admitting that penalty charges are subsidising everybody's banking costs? Thus the charges must be greater than the cost involved, and so they are acting illegally.
Roger Barton, Sheffield

Our bank has all but forced us into bankruptcy. Our credit history is ruined and we have had innumerable penalties imposed on us by companies whose direct debit and standing orders have not been paid, and all the while our bank takes between £100-£200 from our account each month calling them "charges". We have written, pleaded, seen managers, telephoned, and occasionally have had the charges refunded - only to then find that, with no notification, the refunds have been reversed out again two days before the deposit of the salaries - and the cycle starts all over again. We have tried to shut down the account and open another but we cannot meet the conditions which are being asked for by the new bank. We are getting to the point where we dread every telephone call and letter - the stress which our bank has caused us is immeasurable - and we cannot understand why we are being treated in this way. Our original crime was to stray £15 above our overdraft limit for less than two days - frankly I wonder if identity theft might have caused us less hassle than this corporate theft!
Carole Benton, Hastings