Bank charges

[PuddleJumper]

A High Court test case is set to challenge whether or not bank charges for unauthorised overdrafts are unfair. If the court rules against the charges it could lead to billions of pounds being refunded to customers and banks losing millions of pounds every day in administration costs. This might eventually lead to reduce interest rates or even charges to have a current account.

BBC News (http://news.bbc.co.uk/1/hi/business/7178766.stm)

So, as a customer who has NEVER been overdrawn and whose cheques have NEVER bounced because of insufficient funds in my account, I could now end up earning less interest on my money if the courts should decide that banks cannot charge a fee for administering accounts that go overdrawn. I'm sure it's not going to come to that, but it annoys me that people think it's OK to spend money they haven't got and expect to be able to do so without any consequence.

What do you think?

[allycat228]

I wonder if the banks win this case they will increase the charges?

I went over my overdraft by £2.00 once and got charged about £60 even though they new my husband's wages were coming in that night

[Daniel]

Well Allycat. I'm sure there's something about the penalty not outweighing the amount you were overdrawn by. I could very well be wrong of course....

I agree with puddlejumper. The banks should reward people who do the right thing and don't go overdrawn. I've gone overdrawn a few times but never by much and I have to say that HSBC have been very reasonable with the charges. I think the most I ever paid was something like 70p. Too many people these days live in their overdrafts and buy expensive things with their overdraft rather than just waiting a month or if they can't, then taking out a loan at a lower interest rate.

I personally think people SHOULD pay through the nose when they go past a certain agreed overdraft limit.

[Mark]

Lloyds did that to my Dad. He had a large overdraft (Something like £2,000) and every month they would reduce his overdraft limit to exactly what he had in his account, so any withdrawls at all would result in a penalty.

There have been cases where people have been overdrawn by £1, though no fault of their own then been hit by over £100 of penalties, which they can't pay and they get hit by more and more.

[Mark]

Lloyds did that to my Dad. He had a large overdraft (Something like £2,000) and every month they would reduce his overdraft limit to exactly what he had in his account, so any withdrawls at all would result in a penalty.

There have been cases where people have been overdrawn by £1, though no fault of their own then been hit by over £100 of penalties, which they can't pay and they get hit by more and more.

[jim mcglinchey]

Bloody banks, while the rest of us working stiffs are struggling for a living does that cartel not make more than enough without their arbitrary penalties.

[Robinho]

this has been rumbling along behind the scenes for ages now, and the fact we've got to this stage is largely down to one man - Martin Lewis, of http://www.moneysavingexpert.com (great site, highly recommend it).

over the last few years, thousands of consumers have already claimed back thousands of pounds from banks simply by tallying the charges, querying them and threatening to take them to small claims court - the banks have largely paid out rather than risk going to court, losing and a precedent being set - if thats not an admission of being in the wrong i don't know what is!

the crux of it lies in the fact that the charges are disproportiante to the cost of administering the charge - in reality it is estimated by experts that it costs only a couple of pounds to administer an overdrawn account, if that much, so to charge a minimum of £30 to send you a letter, which they might do multiple times a month is in effect a penalty clause, which is ilegal in contract law.

charges will not be outlawed altogether if the OFT wins (remember this case is being brought by the office of fair trading, on behalf of consumers, against the banks), only that they will only be allowed to charge a fair amount to compensate themselves for the inconvenience of administering the unagreed overdraft.

just because you have been lucky enough to ave never gone overdrawn does not mean you never will, it wouldn't take much to change for many people to struggle for a couple of months and fall foul of the anks charges, which only makes it worse.

as for interest rates, there is absolutley no point in relying on the interest rate on a current account anyway, you would need many thousands of ponuds to see even a modest return, if you are interested (no pun intended) in seeing a return you should have your money in a savings or isa account at the very least, which will get a decent rate of interest.

these will always be an option as the banks want to get their hands on your money, so there is competition to offer a good deal, the same will apply for bank account charges, there will always be someone offering an account with no charge and as soon as people switch to it the other banks would soon change - rememer its your money so you can choose where to put it.

i'm all for the case, and i hope the OFT wins as i truly belive that the charges are an unfair clause, but the banks should be able to charge for unauthorised overdrafts.

[luke]

According to the BBC, they make £10m a day in bank charges. :angryfire :

[Brown, Jon Brow]

I've got a radical idea-if you don't have the funds to buy something................................don't buy it!!!! :idea:

[rah]

On my previous account, when I did not have money in my account it would not give me any, pretty simple really. Then I would put it on the CC untli the next pay landed.
When I changed banks, the new bank gave me the money and then charged me $30 for the overdraft fee. This came as a shock at the end of the month when I saw $120 in fees. I rang up the bank, abused them and they gave it back to me. They said that they let the payments go through to avoid emabarresment at the counter, like I give a toss if someone thinks I don't have money!

Doesnt happen now that I now they do it, and my budget is a bit more precise now as well. But I still hate banks and I do everything I can to make sure they make as little money from me as possible.

[Daniel]

I've got a radical idea-if you don't have the funds to buy something................................don't buy it!!!! :idea:
It's a pity more people don't seem to live by this.

Ooh I want a big TV and I want it today. No money? No worries!!!! :D

[Hazell B]

I too haven't been overdrawn, so haven't had charges. Now I'll be facing lower interest on my savings thanks to moaners who have nobody to blame but themselves.

Sorry, but saying somebody is overdrawn 'through no fault of their own' is rubbish. Unless there's a faulty direct debit or something like a bank mistake, who's fault can it be? Only your own! If it is a banking error, they cannot charge you plain and simple. If it's your own, it's your own fault!

Our electricity supplier once took £126 instead of £26 by DD, so I was charged and after one complaint got it straight back, plus a payment of £60 from the electicity supplier.

Having said that, I've got a facility for £550 overdraught that I neither asked for nor wanted - so I can see how tempted some week people may be by it being shoved at them.

[Robinho]

you won't have lower interest on your savings, banks will still fight to get your money, if you are smart its easy to get a good rate of interest somewhere.

its not as simple as just spending more than you need, sure i may have spent up on a few things over the years, but nothing i haven't needed. i have a good job, decent pay and yet i still spend a good proportion of the month in an overdraft - why? because i do have some credit cards and a loan for double glazing to pay (on a low rate personal loan, not some shonky deal set up by safestyle), because i get paid 4 weekly (therefore 13 times a year) and as a result my pay day moves every month, and my direct debits don't. because my mortgage deal has just run out and i haven't finished getting a new one in place and the repayments have gone up, because i have just insured my car, because i have a 20month old baby, because sometimes things happen you haven't budgeted for, like a washer breaking, a puncture etc, and just sometimes other compainies fcuk up and take more than they should do - as a result an overdraftis essential, and at this time of the year my pay comes at the wrong time compared to my expenditure and i cannot help it.

i think i'm pretty smart, pretty careful financially and in a lucky position to be pretty well paid and yet occaisionally i go over my limit.

i'm happy to pay for the priveliege of having a loan every month, and i do in the form of overdraft interest (altho i've just moved bank accounts again to get a better deal), but i object to getting charged £30+ for something that costs less than £2.50, for no good reason - if they don't want me to have that overdraft then they can reasonably take the facility away and penalise that way - its just blatant profiteering and all this talk of lower interest rates is just posturing on behalf of the banks.
what interest rate do you get on your current account - i doubt most of you even know, and its probably tiny. like i said, any savings should be tucked away, you can get a direct access savings account of over 6% easily, double that for a year in some cases if you take another product . this won't change as the banks need this money to do their business. if you have no savings but keep your account between £0 and £1000 in teh black at all times you will probably see less than a couple of pounds interest all year, if you notice the difference in losing 0.25% then i'll refund you the difference* (*not a real offer ;) )

if you are lucky enough not to require an overdraft then thats great, maybe you have debts elsewhere, maybe you have not had time to incur many, maybe you are exceptionaly frugal, but the time may come where you need that extra buffer and it only takes a £0.01 miscalculation for you to get charged heavily - make a mistake by a day and pay for a couple of things a day before you get paid and you could be charged 3 or 4 times, how is this fair?

[Robinho]

also its not the charge for being overdrawn, thats often very little, its the penalty for exceeding it that is illegal.

why is up to say £2k fine, but £2001 attracts £30 fine - it certainly doesn't help you save what moeny you have

[Hazell B]

Robinho, the banks aren't there to help you, they're there to make money for themselves (just like all businesses are) so they have to sort out profits some way. The extra over an agreed overdraught has to happen somewhere, it can't be elastic. After all, do you object to a petrol station making you pay for all the product you buy, even if you go over the twenty quid you intended to put in? No, of course not.

Seriously, having handed out plenty of advice for savers, why don't you alter your bills to four weekly payments to match your wage? It can be done at some banks as I know people who pay that way. Perhaps not for certain direct debits, but it can be done for most.

[Robinho]

i do on the whole, and most of the time its not a problem. like i said, i'm more than happy to pay for the service of having the overdraft facility there when i need it, why should the banks give me money for nothing! and i do pay. i pay overdraft interest up to my agreed limit. if i go over my limit i'm happy to pay an increased interest rate on that amount, i'm happy for the payment they are trying to make to be stopped, i'm happy for the embarrassment that may cause me, i'm even happy for the bank to recover the money they have to spend to send me a letter to tell me and for them to put the charge througfh again at a later date when i have cleared funds in place,

what i object to is the disproportionate charge levied in the case you go over you limit, the banks are making money on what i owe them all the way up to the limit and more when i go over it, they should be able to recover their costs becuase of my mismanagenent of my money, but why should they be able to charge what they like in that case, when that is blatantly a penalty payment in the contract you sign up to, which is illegal in contract law.

the petrol station analogy is noce, but irrelevant, i can stop the pump at any moment, and know that i have to pay what is shown, if i leave without i'm comitting a crime. the rate is the same for every millilitre i put in my tank. if i intend to put in 50litres and accidentally put in 50.02litres they don't charge me an extra £30 for each ml i go over. would you be happy with that?!

and you don't have a pre-agreed amount to spend either.

i struggle to liken the situation to anything else in the consumer arena, but i personally feel its unfair to hit people with these charges. not the charge itself, but the level of the charge.

[Hazell B]

So change banks - don't just moan and then let other people do the hard work of taking legal action ;)

Or, more sensibly, save when you can. That way you get to have cash at hand for emergencies. It's what we do and it works, as my non-overdraught position proves :)

[Garry Walker]

So, as a customer who has NEVER been overdrawn and whose cheques have NEVER bounced because of insufficient funds in my account, I could now end up earning less interest on my money if the courts should decide that banks cannot charge a fee for administering accounts that go overdrawn.
How did you come up with that logic, Mr.Economy? Why would you be earning less interest on your money, if court makes a decision against the banks?
Many banks in world are suffering from a crisis of liquidity and by decreasing the size of ones interest rate, they would only be opening a pandoras box, where clients could easily take their cash to another bank. Obviously, your average client wouldnt know about the interest rates level anyway and it is also true that by just having your money on the basic interest rate the banks are offering, is pretty damn stupid as inflation will eat it up quickly. I mean, how much will you earn from 1000 quid? 30 quid a year? would it matter if it was 35 or 25 quid? As Robinho pointed out, there are better ways than worrying about whether you earn 3 quid more or less a year.

Whats the yearly inflation rate in UK anyway (I am not from UK, so I dont know)?

If you really want to earn money, are brave, have some understanding of economy, have enough time to look at what the market is doing (EVERY DAY) and have a little bit of money to spend, then look at what stockmarket can offer you. It is always a risky investment, but if you are clever, then you will earn significantly more than what inflation robs you. Its risky, but at least its not stupid.

Regarding the case, I hope banks win this one, people who go into overdraft are obviously overspending and need to get a grip of reality. The penalty rate has to be sensible obviously and a 60 quid penalty from an overdraft of a few quids is very disproportionate. In my view, a base rate for every overdraft (for example 5 quid)+ a certain percentage of the amount of the overdraft would be fair.

I buy everything with my little credit card friend. Then I will have 30 days from that day to transfer the needed money to my CC account and no interest rate is charged from me. Easy.


Bloody banks, while the rest of us working stiffs are struggling for a living does that cartel not make more than enough without their arbitrary penalties.

Yes, how dare the banks try to make money (remember, these companies are mostly private owned and their goal is not to provide charity, but earn money to the stockholders). The shame. A private company trying to earn money. Hang the *******s.


if i intend to put in 50litres and accidentally put in 50.02litres they don't charge me an extra £30 for each ml i go over. would you be happy with that?!

Bad analogy.
Here we do the way that we pay a certain sum, and then get the fuel that sum entitles us to.

[Robinho]

Hazel, i have changed banks, but i will still get charged disproportiantely if i go over my pre arranged limit.

i have a savings account, which a little goes into when i have it spare, its not much yet but it a step.

and your position is to be comended, however i remember from a conversation with you before that you have a minmal mortagage on a property you bought a long time ago, so presumably your monthly outgoings are relatively low in that respect. not everyone is that lucky - i can sympathise with people who are on a lower income than me and have a similar or likely much larger mortgage than me, 99% of the time they make neds meet, but it is tight and there isn't spare cash to save, when the little extras you weren't expecting hit you, the last thing you need is an extra penalty making it all the more difficult to get on an even keel.

i am not just moaning, i have started the process to claim back my charges, but all claims are on hold until the case is over, thousands of people have already done this and got their money back and the banks aren't running about cutting rates or complaining about going out of business (apart from Northern Rock, but theirs is a different issue!)

Garry, i agree the banks should charge something, something that reflects the actual inconvenience caused to them - they are quite within their rights to make money from mine or someone elses debts.

you say people who use an overdraft obviously overspend and should get a grip, yet you use a credit card for payment and pay off at the end of the money - there is no difference, they are both effectively a free short term loan, which if not paid back start to cost more. if you have to use a crdit card then you obviously don't have enough money to buy what you are buying and should get a grip (according to your reasoning). i don't agree with that, i think people are missing what an overdraft actualy is - its a buffer which monthly should not be getting any further into, ideally you may be £500 overdrawn at the worst point every month, but, say, £1000 in credit at the best. if your limit was £1000 overdrawn you would not attract these high extra charges, jsut a little bit of interest for the few days debt - quite fair. these charges that are being challenged arew not for being overdrawn, they are for exceeding a limit, be it £50 or £5000 limit, which you already pay for.

on the whole i agree that people who overspend should only have themselves to blame, and people who mount up eg. £25k credit card debts and then default on the payments should not get into such a position, if you are spending on normal things outside of your monthly income then you are overspending, but for some sensible ordinary people, who are making every effort to balance the boks, are paying for the privelige of haveing a helpful facility from the banks feel justifiably cheated when they are plunged deeper into a difficult position by the banks excess.

[jim mcglinchey]

Yes, how dare the banks try to make money (remember, these companies are mostly private owned and their goal is not to provide charity, but earn money to the stockholders). The shame. A private company trying to earn money. Hang the *******s.

I have nothing against a privately owned business trying to clear a few quid. What I object to is the Big Banks abuse of their market dominance and their greed.

[allycat228]

the Ulster Bank are real pains for charging, yet when my husband died and i got a lump sum they were offering me loans and overdrafts like knowones business

[PuddleJumper]

How did you come up with that logic, Mr.Economy? Why would you be earning less interest on your money, if court makes a decision against the banks?
Because the banks have stated that if they are not allowed to charge a fee for administering overdrawn accounts, they will have to reduce interest rates and possibly charge people to have current accounts.


I mean, how much will you earn from 1000 quid? 30 quid a year? would it matter if it was 35 or 25 quid? As Robinho pointed out, there are better ways than worrying about whether you earn 3 quid more or less a year.
I know that interest given on a current account is pittance, and I'm not really bothered what I get on the small amount I keep in my current account. I have money saved away in high interest accounts and I use my full allowance of tax-free ISAs every year. I just think it unfair that people spend money they don't have and expect everyone else to subsidise them.

[PuddleJumper]

you say people who use an overdraft obviously overspend and should get a grip, yet you use a credit card for payment and pay off at the end of the money - there is no difference, they are both effectively a free short term loan, which if not paid back start to cost more. if you have to use a crdit card then you obviously don't have enough money to buy what you are buying and should get a grip (according to your reasoning).
What's wrong with having a credit card but paying up on the due date? I do exactly the same. The money is paid automatically by direct debit on the date it becomes due, meaning it stays in my account for the maximum amount of time and thus earns me the maximum amount of interest. I am a credit card company's worst customer because I always pay up on time and they never make a penny out of me. It may only amount to a few pounds a year, but it's better in my pocket than their's. It pays for a meal out with the family, or a couple of DVDs or a day trip out somewhere.

[Robinho]

What's wrong with having a credit card but paying up on the due date? I do exactly the same. The money is paid automatically by direct debit on the date it becomes due, meaning it stays in my account for the maximum amount of time and thus earns me the maximum amount of interest. I am a credit card company's worst customer because I always pay up on time and they never make a penny out of me. It may only amount to a few pounds a year, but it's better in my pocket than their's. It pays for a meal out with the family, or a couple of DVDs or a day trip out somewhere.


nothing wrong whatsover, that was my point - the overdraft is the same, it costs me nothing to have an overdraft facility, or my credit card (on which i do the same as you), and i always pay up on time. except on the odd occaision when something crops up one month and you can't pay the full amount because sometyhing else happened - with your credit card you incur some interest, or if you are late paying they charge you ( a more reasonable amount) and with my card if the payment lands up tp a week late they refund the late charge.

i pay for all the supermarket shoping on a credit card to keep the money in my account and i aso earn cashback on the cardm making me somewhere around £100 a year on top.

as has been stated b4, the problem is not the banks charging, they are quite withing their rights to charge for exceeding your limit, but not so much.

and the banks will not drop interest rates on savings if they lose this case - most accounts have an agreed rate in advance for a year anyway, and all the banks are falling over each other trying to get your savings, this is where they make their money, that and loan interest, not on excessive overdraft interest charges, they are not suddenly going to struggle to make ends meet cos they can only charge £5 instead of £50, the market for savings is thatcompetitive you'd be deluding yourself to believe that all the banks will suddenly drop their rates cos they can no longer afford to pay out

[Hazell B]

....they never make a penny out of me. It may only amount to a few pounds a year ....

Exactly - those of us who have the nouce to spend only what we can afford earn perhaps fifty quid a year interest. Those who go overdrawn once each year pay the same £50, but they're moaning. Somebody said "it's only a few quid ..." but I wonder how they'd feel losing when they've done nothing wrong at all :rolleyes:

Robinho, you are right in that I have a tiny mortgage. It's less than fifty quid a month in fact. Thing is, it was a huge mortgage when I took it out all those years ago, and I still haven't ever been in debt. Trust me, what you're doing with now is what I did in the 80's when Thatcher upped interest rates beyond anything these days - it hurt like hell! I was alone, too, and far from well paid. Inflation seemed higher and some foods were a damned sight more expensive. Council tax was just coming in and that really made a mess of my money, leaping to over double in one year. Did I blame the banks? No, I just got a third job and went without things like big TVs and decent music and instead paid my bills until the rough patch was over.

The 'see it, want it' society now means most people won't get to do what I did, and now my hard work's partly wasted by their greed. I bet nobody on here would sell their freezer rather than go overdrawn like I once did, instead they'd be moaning that the bank wants payments :mark:

Now I've got my large none-too-cheap-to-run vehicle, a house almost paid for, two rather costly dogs (big vet bill this afternoon :rolleyes: ), two horses and nights out when I want them. Thanks only to me! Why shouldn't I be tired of moaners who can't do the same?

[Robinho]

you seem to be convinced that i have a flash house, fleet of cars, 40 inch plasma TV's in every room.

i don't get charged for being overdrawn. i get charged for exceeding my overdraft - it is a very different thing.

i feel quite insulted by all the jibes about "only spending what they can afford" etc. i am very careful with my money, but i have struggled on occaisions, especially in the last year when my Girlfriend hasn't been working, but instead been at home with our 18mth old baby.

my monthly incomings more than cover my average outgoings, i haven't had a new telly in about 6 years, and that was an end of line display model.

i'm not moaning just cos the banks want paying, i think they should be paid, but i don't agree with that level - it doesn't affect me that much in the grand scheme, and i'm sure there are other irresponsible with money people who hit these charges all the time, but in reality you don't get offered a decent overdraft for any length of time without a good credit rating and a decent income coming in.

sure, be tired of the "moaners" but it clearly doesn't actually affect you. you should be comended on your good fiscal management, i too tire of people who have tens of thousands of loans, cdredit cards and then lie to get a mortgage and complain when they struggle or lose their house, yet you seem to think your personal freedoms are being eroded by the office of fair trading bringing a case against the banking system as a whole.

maybe i wouldn't sell my freezer, but thats not cos it would save me £30, i'd review the costs in both cases and take the £30 hit as i know i've got enough coming in and it will cost me more to replcae items. if i was really up against it i would see other things, we currently run 2 cars, one would go. i'd sell my bike, my computer etc if i had too. however if i can get the money back because in the eyes of the law it was illegal to take that value in proportion to the misdemeanour, why the F*** shouldn't I? the OFT clearly thing they have a good case. Thousands of consumers have already won their claims back as the banks won't defend themselves in court so far as they have been scared of losing. its not an easy process to do, not the sort of thing some numpty with no job, no skills, no prospects and Thousands in debts can put together - the fact is they wouldn't be arsed.

And i'm not blaming the banks, ultimately its my money/debt to manage, but the banks are only to happy to fight for my money when i do have it, or fall over themselves to offer more debt, but they don't help when you do struggle.

You will lose nothing from the result of this case, the banks will not suddenly slash rates, if they do i will happily take back everything, but i honestly belive that this will make no difference whatsoever, in fact the market has been heading towards better savings rates for some time, which shows just how competitive it is.

[Garry Walker]

you say people who use an overdraft obviously overspend and should get a grip, yet you use a credit card for payment and pay off at the end of the money - there is no difference, they are both effectively a free short term loan, which if not paid back start to cost more. if you have to use a crdit card then you obviously don't have enough money to buy what you are buying and should get a grip (according to your reasoning). You misunderstood and I think I should have explained it better. I dont use a credit card, because I dont have money. I use it, because it is much more easier and profitable for me.
Some points why I prefer a credit card over a debit card
1) I use overnight deposit accounts for my money (sometimes) and what if I wanted to spend money during the night, at a pub etc? My debit card can be used as a paying card only when there is money on it, but if everything is on overnight deposit, it would be rejected.
2) I will have full use of my money during the month, and whilst it is not really a big sum I use for food, fuel, etc, I still prefer to use the money for small-term share investments instead.
3) Even if it is not overnight deposit, it will still make me some interest. Obviously, a laughably small sum, but still. Usually most of my money is tied up in various investments anyway.
4) I get points for every credit card payment, and the bank sends me goodies every time I reach some level :D .
5) Because I also buy and sell different currencies at times, it means I might not have any of the needed currency at my account when needed, for example, I cant buy goods in shops for dollars or yens here.



Because the banks have stated that if they are not allowed to charge a fee for administering overdrawn accounts, they will have to reduce interest rates and possibly charge people to have current accounts.
Where have they stated it? In the current economy climate, they wont be lowering the interest rates, they need your money. Unless they of course all lower them at the same time, but that would be leave them in quite a bit of ****.

[GridGirl]

I have a nectar credit card as I get a point for every pound I spend on it. I'm in the position to pay the balance off each month and always do so, so I never see myself as having credit card debt. I was reliably informed my Mrs Debenhams lady last night infact that I've now got £101 pounds to spend just becuase I've used my credit rather than my debit card to buy my weekly shopping and fuel.

I guess it all depends how big you overdraft facility is. Mine is £2000 so by my own admission I would be a bit stupid to get myself in the position to be facing charges by going over that limit. Maybe I'm a complete saddo but I do daily bank reconciliations so I know exactly how much money I have in my bank at any point in time. If everyone did that and kept good control of their money I'm sure there would be a big reduction in people paying bank charges.

[allycat228]

My overdraft is £450 but i am very lucky i do not have a mortgage(it was paid off when my husband died) my sister works for MSPORT and her hubby is a plumber but they can not afford a mortgage in the lake district

sorry going off on a tangent being p****d

[airshifter]

Where have they stated it? In the current economy climate, they wont be lowering the interest rates, they need your money. Unless they of course all lower them at the same time, but that would be leave them in quite a bit of ****.


Garry,

I have to somewhat disagee on the thought that we don't pay for the mistakes of others. Stated or not, the banks want to make money, and they won't take a loss because of a court ruling that they aren't in the right for charging those not responsible with their funds.

It only serves to reason that if a court states that they must lessen fees for certain services, we will earn less interest on our funds as a means of them recovering that money.

[KILOHMUNNS]

Time to stir things around again!!! I used work for one of the big 4 and this sort of thread is very interesting for me.

Most of the major Banks do charge too much for being overdrawn in my opinion but here are a couple of things to take into account.

1. Firstly it can actually cost between £8-£15 for the bank to charge you (not £2.50 as previously stated) as you have to take into account peoples wages as well as postage (amoung other things)

2. When you open a Bank account you sign the forms to state you agree to the T&C's (which include amount of Bank charges) therefore you are signing a contract to say you agree to be charged £30 everytime you go overdrawn.

3. If you are a good customer who never go overdrawn and don't want duplicate statements etc and have some savings then the Bank actually makes a loss on you. It actually costs them to keep a current account and the way they make their money it to cross sell you Credit cards/Mortgages etc.

4. Some of you have stated that you have been charged by going overdrawn by a really small sum(eg £1). Then my advise it to change your Bank!! The majority of financial institiutions have a 'buffer zone' so wont charge you for small overdrawn balances (not that they all tell you that).

5. If the Banks lose the case and can only charge small sums then it could spell the end to free banking. Some Banks have already tried to charge at cashpoints (and failed thankfully - but it is another loss making exercise for them) so don't think they won't try other methods. Some Banks already charge on so called 'premium acounts' were you are treated to better services that you tend not to ever use (as reported on Watchdog).

I am not in favour of Banks in general but we do have one of the best banking systems in the world (I know as I do a lot of International Banking now) and it is still free to hold a bank account.

My belief is that the majority of the whingers are the ones that like spending lots of money, I have done it a couple of times but they were my errors not the Banks and I paid up!

I will now sit in a corner and put my shield up while the arrows of hate come raining down on me!!! :D

[Robinho]

interesting points Kilo, and belive it or not i do generally agree with you.

however, in response to point one please see http://news.bbc.co.uk/1/hi/business/6507865.stm

which gives an interesting view. i am also keen to point out that i am not in favour of the banks not being able to charge anything. if they can prove (and lets face it they should be able to) that it costs them say, an average of £10 to administer an overdrawn account, then they should be able to charge that plus some margin for Profit, make it a total of £12. if they can't prove it then they risk more scrutiney and a harsher limit being imposed.

my second point is the contract thing. whilst people do sign up to the contract, and the contract states details about unauthorised overdraft charges, i don't belive they state the amount, and even if they do, the unfair contractual terms act means that if the clause is deemed illegal in the eyes of the courts then it doesn't matter what is signed, as it will be immediatley disregarded.

on the whole though i agreed with your points, i still however stand by my stance that the charges curently levied are disproportionate and unfair and should be more realistic to the costs incurred