Outrageously Overcharged

In July 2007 the Office of Fair Trading brought a case representing 1.2 million people against seven banks and one building society to reclaim unauthorised overdraft fees, totalling £2bn, paid since 2001.

Today the Supreme Court ruled in favour of the Bankers Association, stating that “the OFT could not challenge overdraft charges because it does not have the power to decide whether unauthorised charges are fair”

This is a landmark victory for the high street banks.

Yesterday I received my monthly statement from Abbey National and saw that I had been charged 115.09€ for unauthorised overdrafts in five separate transactions. There were two £30 charges for transactions in supermarkets. One other transaction involved a payment to Boots chemist for a tooth brush which cost £3.59, but I was charged £17.85 by Abbey. In disbelieve, I telephoned the bank immediately and queried the charges. I was advised that is normal banking procedures. This was the conversation that followed:

“In which case, I would like to request that card payments will be automatically declined should there be insufficient funds in my account”

“This is not possible. The card payment system is such that when a payment is made, the system cannot know if you have insufficient fund in your account” the operator replied

“I’m sorry, but that’s not possible. In France and Spain, a card payment is automatically declined should there be insufficient funds, regardless of amount. Surely the UK has a similar system?”

“Sorry Ms Luu, but the card system in the UK cannot do that. However, since you are a new customer and as a good will gesture, we will refund £45.00 for this time”

I said thank you, then hung up

This is complete bullshit! If Spain or administratively chaotic France can have the system, then why can’t the UK? This is purely a is complot by UK’s bankers to earn more in obscure charges.

Now I understand why there are queues of upto 30 people waiting at ATM machines on high streets during busy times! They are avoiding shocking overdraft charges!

I hate to say this, but I agree with the Supreme Court’s decision. Clearly this was defeat foretold. Shoot the damn OFT lawyers who said that they would win. How could they think, for one second, that they or any consumer protection body had the power to dictate what financial institutions charges?

According to OFT reports, "even though 1.2 million claims the overdraft charges, there is a further 8 million people who have paid the charges and not claimed".

It’s nauseating to think that the tax payers have stumped up billions to keep the bankers’ jobs and not to mention pay their bonuses. It’s a real kick in the teeth.

Today’s judgement shouldn’t be taken as a financial hiccup. If a quarter of all account holders have been charged at least once every year for unauthorised overdrafts, then it’s not a matter for OFT. It should become a political issue. Central Office should implement a standardise rule, cap charges or introduce a card payment system similar to that of the continent. Though, today was a victory for the Banker’s Association, tomorrow will be victory for the people.

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