Bank charges are what it says in the contract
Banks in the news again today. This time, they’ve won a supreme court ruling that the OFT has no power to interfere with certain charges (although it might nevertheless have powers to review their overall packages). So-called consumer groups outraged: lots of people won’t get refunds unless their banks acted unfairly in making charges.
I beg to differ. I’m as pissed off as the next taxpayer about my money going to bail out banks, but on this matter I’m with them. If a bank’s terms and conditions say that going beyond an overdraft limit will cost you £x, then they’re fully justified in charging £x when customers do that. And variants on the theme. The key points are:
- You signed up to a deal that includes charging for some things you might do.
- You have ample opportunity to complain and get refunded if you incur charges due to a bank error, or in cases of reasonable doubt as to whose fault it was.
- You’re taking out money that isn’t yours. That makes you a high-risk customer for the bank. After all, if you were a responsible customer, you’d have arranged it, and avoided the charges.
- Above all, banks offer different terms and conditions, and if you don’t like one bank’s charging regime, you can take your business elsewhere.
Yes, it’s possible to go into the red inadvertently. I’ve done it myself (most recently in 2002). I cursed at the charges, but I didn’t go whining to some collective-nanny “consumer” group with an agenda to abolish the value of money by encouraging everyone to spend what they don’t have. Fortunately my own current account is with Nationwide, whose charges are a lot lower than those spoken of by the campaigners. If you find £35 outrageous, stop whinging, and take advantage of Nationwide’s £20. Or some other bank … I believe the Coop is usually competitive, for instance.
The meeja reaction is slightly satisfying: they’ve been campaigning along with the “consumer” groups and had assumed it was everyone-vs-the-banks, and that the banks would lose, so they’ve been caught on the back foot. It’s encouraging to hear them now acknowledging a huge volume of correspondence from the hitherto-silent majority, siding with the banks and today’s ruling on this issue.
Savers and taxpayers – especially future taxpayers – are being robbed blind to bail out borrowers, above all mortgage holders. But today we’ve at least been spared bailing out one bunch of chancers.